Chrysler LLC might not have filed for bankruptcy protection until April 30, but the automaker's restructuring efforts have been generating work -- and fees -- for advisers for months.
In late 2008 Chrysler retained both Jones Day, which was fresh off of a successful Chapter 11 reorganization of auto parts supplier Dana Holding Corp., and restructuring firm Capstone Advisory Group LLC. The automaker held exploratory talks with a range of potential partners and, in the months that followed, worked with the new administration's automotive task force to formulate a restructuring plan. It did all this while keeping its bankruptcy counsel on board and opening talks with Fiat SpA about a potential partnership.
All that activity has generated lots of work and fees for the advisers involved, with Jones Day already billing Chrysler some $18 million. The Jones Day team representing Chrysler is led by Corinne Ball, the firm's co-head of restructuring. Ball, who began her legal career 30 years ago at bankruptcy powerhouse Weil, Gotshal & Manges LLP, has handled a slew of automotive Chapter 11 filings, including Dana's in 2006. She also represented General Motors Corp. when it bought South Korean automaker Daewoo Motor Co.
Leading the charge with Ball is David Heiman, the founder of Jones Day's business restructuring and reorganization practice, who represented Federated Department Stores in 1992, when it made what was then the second-largest Chapter 11 filing ever.
Ball and Heiman are each billing Chrysler at $900 an hour. Meanwhile, their colleague in the firm's executive comp practice, John Cornell, is collecting $950 an hour from the automaker. According to The Deal Pipeline, when all bankruptcy assignments are considered, Cornell's fee wouldn't crack the top 15. (Robert Kent of Freshfields Bruckhaus Deringer LLP billed $1,315 an hour for his work as special counsel in the Advanced Marketing Services Inc. case.)
The Jones Day effort includes attorneys from seven of the firm's offices and spans its bankruptcy, labor, corporate, M&A, tax and lending practice groups. Members of the team include Jeffrey Ellman, a restructuring partner in Atlanta who worked with Ball on the Dana filing; Richard Engman, who focuses on distressed M&A; and Pedro Jimenez, whose specialty is U.S. and cross-border business restructurings. Also on the team is Mark Cody, a bankruptcy partner in Chicago, and Tim Cullen Jr., head of Jones Day's worldwide trial practice based in Washington.
Jones Day has also put Columbus-based of counsel Robert Hamilton on the case. A litigator, he helped represent Federated and, more recently, Dana. Washington-based Gregory Shumaker is also working on Chrysler, as is Brett Barragate, co-leader of the firm's financial institutions litigation and regulation practice who also toiled on Dana. There's also John Mazey, a newly minted partner in banking and finance; Jere Thomson, head of M&A in North America; and Marilyn Sonnie, who advised Dana when it received a $750 million investment from Centerbridge Capital Partners LP in 2007.
John Kane, an M&A partner in New York, is also involved, as is Randi Lesnick, who also focuses on M&A. Manan Shah, from executive comp, and tax partners Candace Ridgway and Edward Kennedy round out the team.
Also working for Chrysler is Albert Togut of Togut, Segal & Segal LLP, who will advise on any matters that present a conflict for Jones Day. Togut has served as bankruptcy conflicts counsel for Tower Automotive Inc., Dura Automotive Systems Inc. and Delphi Corp. Meanwhile, a Schulte Roth & Zabel LLP team including Richard Presutti, Robert Kiesel and Alan Waldenberg is providing merger advice to Chrysler in its proposed alliance with Fiat.
The Capstone team working with Chrysler includes executive directors Robert Manzo, a former co-head of the restructuring practice at FTI Consulting Inc., and Peter Chadwick, along with managing director John Rooney. They are reportedly billing Chrysler between $570 and $795 per hour. Meanwhile, Greenhill & Co.'s Bradley Robins is providing a fairness opinion relating to Chrysler's deal with Fiat.
Chrysler reportedly contacted Greenhill in March and has already paid the firm $3.4 million. It will also fork over $250,000 to Greenhill for an advisory fee, $3 million for an opinion on the Fiat sale and bids for assets Fiat doesn't want, and $1 million when the sale to Fiat and other sales are completed.
Fiat, for its part, is being advised on the deal by Sullivan & Cromwell LLP partners Scott Miller and Hydee R. Feldstein. Palo Alto, Calif.-based Miller has a relationship with Fiat CEO Sergio Marchionne, whom he met while working on a series of mergers for Alusuisse Group Ltd., a Swiss aluminum business that Marchionne once headed. In 2005, Miller advised Fiat when it ended its alliance with General Motors.
Representing the United Auto Workers, a key Chrysler creditor, is a Cleary Gottlieb Steen & Hamilton LLP team including corporate partners Richard Lincer, David Gottlieb, employee benefits partner A. Richard "Brick" Susko, bankruptcy partner James Bromley, tax partner Jason Factor and antitrust partners Mark Nelson and James Modrall. Cleary has worked with the UAW since the 1990s restructuring of Navistar International Corp. and continuing more recently with the 2005, 2007 and 2008 UAW contract negotiations and revisions.
White & Case LLP partners Thomas E. Lauria and Glenn M. Kurtz are representing a group of Chrysler lenders, while Chrysler's national dealer council engaged Arnold & Porter LLP partners James W. Cooper and Kenneth L. Schwartz.
A Kramer Levin Naftalis & Frankel LLP team including Kenneth H. Eckstein, Thomas Moers Mayer, Robert T. Schmidt, and Adam C. Rogoff was chosen to represent Chrysler's unsecured creditors' committee.
Daimler AG, Chrysler's one-time majority owner, which until recently still held a small stake, is being advised by a Shearman & Sterling LLP team including partners W. Jeffrey Lawrence, Markus Rieder, Kenneth Laverriere, Samuel Waxman, Alan Goudiss, Peter Blessing and James Garrity Jr.
Chrysler Financial Services Americas LLC, a separate entity that is to be folded into GMAC LLC as part of the reorganization, is getting advice from a Dewey & LeBoeuf LLP team including Martin Bienenstock and Richard W. Reinthaler. An associate for that firm collapsed during the bankruptcy's first courtroom hearing in New York while standing next to Bienenstock -- an event reported by several news outlets. GMAC is receiving advice from attorneys at Wachtell, Lipton, Rosen & Katz and from investment bank Morgan Stanley.
Cadwalader, Wickersham & Taft LLP has been working for the government's automotive task force since February. Key Cadwalader partners handling the assignment include John J. Rapisardi, co-chair of the firm's financial restructuring department, along with R. Ronald Hopkinson, Julian S.H. Chung and Peter M. Friedman.
In advising the government, Cadwalader is working with Sonnenschein Nath & Rosenthal LLP, a Chicago-based law firm with capital markets experience, and investment bank Rothschild. Matthew Feldman, a partner in the business reorganization and restructuring department at Willkie Farr & Gallagher LLP, left that firm in March to join the auto task force full-time. Feldman represented Centerbridge in its investment in Dana in 2007.