Bankruptcy

Morning Docket 2.9.09

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* The U.S. government may force GM and Chrysler into bankruptcy to ensure re-payment of the $17.4 billion bailout to taxpayers. [Bloomberg]

* A hearing today before the Ninth circuit in San Francisco will provide insight in to the administration’s views on extraordinary rendition–the secret transfer of a terror suspect from one state to another. [ABC]

* The Italian Senate will discuss a “Right-to-die” bill designed to keep an Italian woman on life-support. [The International Herald Tribune]

* When will the baseball steroid scandal ever end? Sportsfans are up in arms about reports that Alex Rodriguez used steroids in 2003. [Reuters]

* A new book “Claudette Colvin: Twice Toward Justice,” sheds light on a forgotten hero in the civil rights movement and the legal fight to de-segregate busses. [The Associated Press]

* Need a job? Attorney Michael D. Hausfeld, who once represented Holocaust victims against Swiss banks, started a law firm that focuses on protecting businesses against global cartels. [The Washington Post]

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Musical Chairs: Bruce Zirinsky and John Bae from Cadwalader to Greenberg Traurig

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Bruce Zirinsky Bruce R Zirinsky.jpgIn this economic climate, bankruptcy partners are worth their weight in gold. Expect to see more lateral movement in the bankruptcy bar, as marquee names get courted by firms seeking greater presence in the area.

Here’s what could be the start of a trend: Bruce Zirinsky (pictured), co-chair of the financial restructuring department at Cadwalader, Wickersham & Taft, is moving from CWT to Greenberg Traurig. Joining him is fellow bankruptcy partner John Bae.

In response to inquiries from ATL, spokespersons at Cadwalader and Greenberg Traurig issued this joint statement:

We can confirm that Bruce Zirinsky and John Bae have tendered their resignation at Cadwalader, Wickersham & Taft and have accepted offers to join Greenberg Traurig shortly.

Congrats to Greenberg Traurig on their new hires. GT seems to be growing despite the downturn, as reflected in their most recent press releases.

As for Cadwalader, all’s fair in love and lateral moves. The firm is losing two bankruptcy partners, at a time when they’re in high demand. But recall that, back in March 2007, CWT raided another firm for Chapter 11 champs of its own: George Davis, Deryck Palmer, John Rapisardi and Andrew Troop, who left the storied bankruptcy group of Weil Gotshal for Cadwalader.

Reflections on what the Zirinsky and Bae defections mean for CWT, after the jump.

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Morning Docket 12.29.08

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* Anti-government demonstrators in Thailand swarmed around the Parliament building Monday, delaying the new legislature’s first meeting. [International Herald Tribune]

* Bloggers beware! A Maryland court will decide whether authors who write critical comments on-line under pseudonyms will have to reveal their identity. (yikes!) [The Baltimore Sun]

* New York chief court judge Judith Kaye officially retires Wednesday. Now a highly celebrated Judge, Kaye was not an easy sell when Cuomo appointed her to the state court of appeals. [The New York Times]

* US Courts will stil see a steady flow of terrorism threat cases, even when Obama is president. [The Washington Times]

* In light of recent events in Gaza, the Iranian cabinet has decided file suit against Israeli officials in international courts. [Trend News Agency]

* Holiday sales were the worst in 40 years, so expect to see a ton of bankruptcies and take-overs in the near future. [Bloomberg]

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Morning Docket 12.19.08

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* The White House has raised the prospect of “pushing the cars into a managed bankruptcy as a solution to save the companies from financial collapse.” [The International Herald Tribune]

* The Iraqi journalist who threw the shoe at President George W. Bush will go on trial for insulting a foreign leader, which could get him up to two years in prison. Another case may be brought against the people who beat him after the incident. [The Associated Press]

* “Deep Throat” W. Mark Felt Sr., the second highest official in the FBI during Watergate, and the famous anonymous source who led journalists Bob Woodward and Carl Bernstein through the “crimes and coverups” of Richard Nixon died yesterday at 95. [The Washington Post]

* The 9th Circuit ruled that the U.S. courts might not be the appropriate place for Papua New Guinea citizens to sue British mining company Rio Tinto for inciting a “savage” ten- year civil war. [Courthouse News Service]

* A California jury acquitted surgeon Dr. Hootan Roozokh, who was accused of trying to accelerate an organ donor’s death. [The Los Angeles Times]

* Remember DC Judge Roy Pearson’s pants suit? The D.C. Court of Appeals rejected it yesterday…no surprise there. [The Associated Press]

* First there was the recession, then there were the bankruptcy’s, followed by the lay-offs, and now here are the scandals. The DOJ charged four people in an insider trading scheme incolving a Lehman broker.[CNN]

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GM Hires Weil (and Ex-Weil Partner) for Possible Bankruptcy Case

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Weil.gifSo should Weil Gotshal associates be rooting against a government bailout of GM and the other big automakers?

GM bankruptcy –> more fees for Weil –> bigger bonuses (which WGM has not yet announced)?

UPDATE (1:00 AM): As of now, it looks like the auto industry bailout talks have failed. This makes a GM bankruptcy even more likely.

But even if GM does file for Chapter 11 (or even Chapter 7), thereby generating thousands of billable hours for Weil associates, it’s unlikely that Weil will pay out Skadden-sized bonuses (although the speculation sure is fun). As noted in the comments, Weil generally follows the market, and the market has settled around Cravath.

Paying above market could create problems for Weil. As one reader previously noted, “Weil will never be a bonus leader because there is concern at the firm that it would seem unsightly by the firm’s bankruptcy clients to lead the market with bonuses.”

That concern seems warranted. As GM director George Fisher told Bloomberg last week, “We are fearful, very fearful, of a prolonged [bankruptcy] proceeding that would just destroy our brand in the marketplace and therefore that is not considered a viable option…. These Wall Street geniuses and law firms are coming up with all these solutions that make them a lot of money.”

FURTHER UPDATE: As noted in the comments, as well as the original WSJ article, GM has also retained former Weil partner Martin Bienenstock, now at Dewey & LeBoeuf, to help it become a “futuristic” automaker for the 21st century. Good luck with that.

GM Hires Advisers to Weigh a Bankruptcy Filing [Wall Street Journal (subscription)]
GM Hires Lawyer Bienenstock to Reconfigure Automaker [Bloomberg]

Earlier: If the Big Three Fall, Which Law Firms Rise?
Jones Day’s Chrysler Bankruptcy Coup
Chrysler Hires Jones Day As Bankruptcy Counsel [Dealbreaker]

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Jones Day’s Chrysler Bankruptcy Coup

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Jones Day Logo.jpgThe future of the Detroit’s Big Three is looking grim, as Congress has turned tight-fisted in response to the automakers’ request for $34 billion to stay alive. Chrysler is getting ready to throw in the towel, and has chosen Jones Day to do the throwing.

From the Wall Street Journal (subscription):

Chrysler LLC has hired the prominent law firm Jones Day as bankruptcy counsel, according to several people familiar with the matter. The firm was hired several weeks ago to help the ailing auto maker prepare for a possible Chapter 11 bankruptcy filing.

Jones Day bankruptcy maven Corinne Ball, a partner in the New York office, will lead the effort should Chrysler fail to secure a $7 billion capital infusion by the end of the year.

Corinne Ball Bankruptcy Czarina.jpgJones Day co-head of restructuring Corinne Ball is handling the case, said the people familiar with the matter. She has worked on other automotive bankruptcies, such as that of auto-parts supplier Dana Corp., and many cases involving the United Auto Workers union. She represented GM in its acquisition of Korean auto maker Daewoo.

AmLaw noted the possibility for this major coup for the Jones Day team. This will be a massive deal. Sad for Detroit and the general economy. But what’s not these days?

Chrysler Hires Law Firm Jones Day as Bankruptcy Counsel [WSJ]

To Handle Potential Bankruptcy, Chrysler Taps Jones Day [WSJ Law Blog]

No Way! Jones Day Retained as Bankruptcy Counsel for Chrysler, Say Reports [AmLaw Daily]

Chrysler Hires Jones Day As Bankruptcy Counsel [Dealbreaker]

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Morning Docket 12.02.08

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* Thailand’s constitutional court decided to disband the country’s ruling party and ban the prime minister from politics for five years. [CNN.com]

* A former federal courts chief is calling for the resignation or impeachment of an appellate judge in California for watching internet porn. In one month, there were 90,000 hits on 1,100 porn sites at the California Judiciary. [Miami Herald]

* Al Franken, the Senate candidate from Minnesota, may appeal to the courts because he argues that 1,000 absentee ballots were wrongly discarded in the recount. [CBS]

* The US Supreme Court refused to hear an appeal from the city of Garden Grove in California that argued that city police should not have to return seized medical marijuana to a chronic pain patient. California’s 4th District Court of Appeal sided with the patient, and now the case is closed, a victory for advocates of medical marijuana use. [The Los Angeles Times]

* At least something is going well for Detroit these days. “U.S. car maker Ford Motor Company Tuesday won its case at a European court over the registration of the word “Fun” as a European trademark.” [CNN]

* Chevron was found not-guilty by a federal court jury in San Francisco; the jury dismissed claims of Nigerian villagers who say they were attacked by company paid soldiers on an an off-shore drilling platform. [Bloomberg]

* Don’t forget, meet the editors is tonight at 6:30 at Professor Thoms’ [Above The Law]

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If the Big Three Fall, Which Law Firms Rise?

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Gleaming tower of cars.JPGAre we going to have a domestic auto manufacturing industry in 2009? Nobody knows. But just in case the government doesn’t bail out Detroit, law firms are jockeying to work on the bankruptcy.

AmLaw Daily reports that three firms are the early favorites to capture the bankruptcy work: Weil, Gotshal & Manges, Kirkland & Ellis, and Skadden.

Timothy Pohl, part of Skadden’s ruling class, sounds confident that his firm is in the running:

Pohl says Skadden has historically done work for former Chrylser owner Daimler, which sold 80 percent of Chrysler to private equity firm Cerberus Capital Management in 2007 for $7.4 billion. Skadden also does work for Ford, says Pohl, adding that the firm has yet to be contacted by either automaker.

“I’m not convinced that any [of the Big Three] are hiring advisers yet,” Pohl says. “But between us, Kirkland, and Weil, I’d say that the three of us have the largest [bankruptcy and restructuring] groups with a big falloff after that.”

Obviously both Skadden and Kirkland have the chops to handle the work, but isn’t the real question “Why not Weil?”

It’s uncertain whether a potential Big Three bankruptcy might present a similar problem for Weil–and how the firm would manage to juggle its Lehman, Lenox, and other client obligations in the event of such a resource-draining retention. That’s especially true given that it’s unclear whether a potential Big Three filing would proceed on a liquidation track (a la Lehman) or as an infinitely more complicated corporate restructuring.

At some point, Weil has to run out of bankruptcy lawyers. Right?

On Kirkland, after the jump.

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Musical Chairs: Bankruptcy Lawyers on the Move

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kramer levin logo.JPGThis is not the best time to be losing Bankruptcy rainmakers. But according to the ABA Journal, that is exactly what is happening to Kramer Levin Naftalis & Frankel. The three partners are: David Feldman, Eric Wise and Matthew Williams. David Feldman was formerly the co-chair of Kramer Levin’s bankruptcy group.

Gibson Dunn’s press release heralding the new hires reinforced the trio’s rainmaking capacity:

“This group has an established practice and a tremendous reputation in the distressed debt arena and will give Gibson Dunn a strong foundation in this growing area,” said Michael Rosenthal, Co-Chair of the Business Restructuring and Reorganization Practice Group.

Update (3:51): As many commenters pointed out, bankruptcy superstar Luc Despins is leaving Milbank for Paul Hastings. According to the National Law Journal:

Luc A. Despins, well-known in the profession for his representation of the creditors’ committee in the bankruptcy of Enron Corp., is the latest marquee name to be poached as firms rush to ramp up restructuring practices in response to the worsening economy.

According to our sources at Milbank, no associates will be leaving with Despins. The firm could not be reached for immediate comment.

Bankruptcy lawyers are the new IP attorneys. They’re very much in demand.

Kramer Levin Bankruptcy Trio Jumps Ship to Gibson Dunn [ABA Journal]

Top Milbank Bankruptcy Partner Leaves for Paul Hastings [Law.com]

Gibson Dunn Adds Three-Partner Bankruptcy and Distressed Debt Group in New York [Gibson Dunn]

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Weil Gotshal Attorney Fees From Lehman Bankruptcy

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Weil.gifBloomberg News is reporting that the train wreck formerly known as Lehman Brothers filed an application to pay Weil Gotshal attorneys a whole boatload of cash:

The investment bank asked for court approval to pay $650 to $950 an hour for partners and counsel, $355 to $595 for associates and $155 to $295 for paraprofessionals.

A year ago, the WSJ Law Blog did a report on the Thousand-Dollar Bar. There were only six lawyers on that list. So while $950 an hour isn’t astronomical, it’s clear that Lehman is getting the most expensive bankruptcy money can buy.

At the upper end, $595 per associate hour is pretty good money as well.

Whenever we mention that Weil could be a bonus leader this season a smart commenter always disagrees:

Weil will never be a bonus leader because there is concern at the firm that it would seem unsightly by the firm’s bankruptcy clients to lead the market with bonuses

Good point. Still, there is a lot of money floating around Weil these days. Are you sure that they won’t trickle cash rewards down on associates?

We’ll wait and see.

Weil May Get $950 an Hour for Lehman Bankruptcy Work (Update1) [Bloomberg]

The Law Blog Thousand-Dollar Bar [WSJ Law Blog]

Earlier: Weil Gotshal Produces The Mother Of All “We’re Awesome” Emails

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