One company’s downfall is another company’s opportunity, particularly if the other company is a law firm.
General Motors’ bankruptcy filing today will divert millions of dollars to bankruptcy lawyers at two major New York firms - Weil Gotshal and Dewey & LeBoeuf.
Harvey R. Miller of Weil Gotshal, the lead attorney in the Lehman Brothers bankruptcy, is also lead attorney in GM’s Chapter 11 proceedings.
Martin Bienenstock, a partner of Dewey & LeBoeuf who used to work with Miller at Weil Gotshal, is also advising GM. Bienenstock was lead attorney for the Enron and the Delphi bankruptcies.
Another prominent firm, Cravath, Swaine, is representing the GM board during the proceedings.
The UAW, meanwhile, has brought in Lazard Ltd. and Cleary Gottlieb.
The White House, steering the bankruptcy through the Presidential Task Force on the Auto Industry, has also hired an expert team. Led by former investment banker Steven Rattner, the group is also being counseled by Cadwalader, Wickersham and the Boston Consulting Group.
Legal experts predict long, complicated proceedings for GM, generating millions in fees. Daniel Gross of Newsweek notes that the Enron bankruptcy carried a tab of $750 million for attorneys and other advisers.
Weil Gotshal has already billed $55 million in fees in the Lehman bankruptcy. Harvey Miller’s rate in that case has been $950 per hour.
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3 Comments
#1. Christine A Jubic 06.01.2009
I have heard it was the shareholders pushing for and hoping for a BK. Of course, dont forget, according to BK law, the shareholders get paid off first & formost,—in full, 100%. As ususal, it is the workers who are s-out-of-luck and broke.
#2. Dubious Brother 06.02.2009
Christine A Jubic - You are wrong. The shareholders are the last to get paid and they will get nothing from the bankruptcy. The attorneys get paid first. No one wins in this bankruptcy except for the attorneys. The first couple taking care of their own.
#3. Christine A Jubic 08.05.2009
Oh yes of course, I forgot about attorneys fees right off the top, but when I said the shareholders get paid first in full, I meant “after fees and expenses, of course, if there were anything left to pay out. Even if paid at a fraction of what was owed,…lol half a loaf is better than none, or LET THEM EAT CAKE!
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