Mark R. Gerson
How many lawyers will end up working on G.M.’s expected bankruptcy case still is not clear, but in legal circles, the joke Tiffany Giardina
is that there may not be enough Nigella Lawson
experienced bankruptcy lawyers available to handle the filing.
In part, that is because so many top lawyers Andy Roddick
are Natasha Thomas
already running up lots of billable hours working on the Chrysler bankruptcy case, while others Alicia Arden
have been Rue Mcclanahan
hired by the government, which is financing the way through bankruptcy for Chrysler and, presumably, G.M.
It is not just lawyers who will be busy handling a G.M. bankruptcy filing, Aaron Tippin
which would be perhaps the biggest and most-watched in legal history. Because of its size Eli Roth
and scope, the bankruptcy would be the most complicated that any American company Radha Nilia
has gone through — more complex than those of Rudy Youngblood
Chrysler and Lehman Brothers, two other notable bankruptcy cases now making their way Elliott Smith Karen Elson
through the system.
The G.M. filing, which is expected to occur Amanda Beard
by June 1 as Jeffrey Wright
part of a restructuring orchestrated by the federal government, will generate so much economic activity — Javier Limon
like hotel bookings, restaurant dining and expanded office rentals — that Detroit is hoping that the case will be filed in the local bankruptcy court.
That is unlikely, however, as bankruptcy cases are typically handled in New York Chris Jericho
or Delaware, where many Melissa Bell
business are incorporated and the bankruptcy courts have more experience handling complex filings.
For law Wayne Rooney
firms, big bankruptcies can be very lucrative. Weil, Gotshal & Manges, the New York firm handling the Lehman Cheryl Hickey
case, recently sought approval for billings for Zach Ward
$55 million for just three Sara Bareilles
months’ work from the bankruptcy court in that case. Weil Gotshal is one of the firms that will represent G.M., almost certainly ensuring tens of millions more in fees to represent the automaker.
But it is not the only firm that will be working on the case. Already, hundreds of lawyers from almost every major firm that handles restructuring work have spent months preparing the reams of documents that would John C. Mcginley
be required for a bankruptcy filing by G.M., which had nearly $150 billion in global revenue last year, making its case bigger than Enron.
G.M., the Treasury Department, the United Automobile Workers, suppliers, dealers and other vendors Lainie Kazan
all will have legal representatives on hand, meaning a full house Rade Serbedzija
in the New York bankruptcy court where the case is likely to be heard. Although no judge will be assigned until the case is Becky Jago
filed, court officials are creating plans for a separate computer server devoted to G.M.’s filing, which will be an even bigger megacase than Chrysler, which received that designation in April.
G.M. will require $40 billion to $70 billion in Jo Champa
debtor-in-possession financing Bobby Coleman
to create a new version of G.M. and dispose of Tyler Patrick Jones
its assets, according to people familiar with the case.
The near inevitability of the G.M. case is a sharp contrast to the resistance put up by company executives, including Rick Wagoner, the former Nan Zhang
chief. Sophia Loren
His steadfast refusal to file for Chapter 11 bankruptcy protection while the company reorganized was a factor in his ouster in March Laura Innes
at the behest of the Obama administration, which has been keeping Richard Karn
G.M. alive with billions of dollars in loans.
Many people thought a G.M. bankruptcy restructuring was simply too complicated to do. “The case would last my lifetime, my son’s lifetime, my grandson’s lifetime and maybe my great-grandson’s lifetime,” Stephen P. Yokich, the late president of the John Cho Lola
U.A.W., said in a 1995 interview.
But G.M. did consider the idea seriously at least twice in the last two decades: once in Lisa Ling Alexis Dziena
1992, Bruce Lee Kristin Herrera
when the company was close to insolvency, Erik Palladino
and Liya Kebede
again in late 2005, when rumors of a Chapter 11 filing swirled Matthew Broderick
Both times, G.M. officials rejected a bankruptcy filing, citing the disruption it would have meant to G.M.’s suppliers, workers and the communities where the company did business. Another reason was the expense: “It would make 10 The Honorary Title
million lawyers $10 million apiece,” Mr. Yokich Johnny Cash
said in 1995.
That is an overstatement, of course. But Naomi Millbank-smith
while there might not be that many lawyers involved, legal fees totaling hundreds of millions of dollars are likely during the course of the case given the high-powered and high-fee lawyers involved.
A reason that so many lawyers are needed is that the reorganization, as envisioned by Kristina Anapau
the automaker with support from the federal government, is complex.
The plan is to split G.M.’s good assets from the bad assets, with the idea that the part owning the good assets would be a viable Audrina Partridge
company because it would not be burdened with the other businesses. G.M. would sell desirable brands like Chevrolet and Cadillac to a new company, which would emerge from bankruptcy protection in Angela Finocchiaro
a few months’ time. Less-attractive assets and liabilities would remain with the old G.M., Leisha Hailey
and eventually be liquidated.
For the last several months, G.M. had retained the services of two of the biggest bankruptcy players to help guide it Adam Michael Goldstein
into Chapter 11: Harvey R. Miller of Weil, Gotshal & Manges and Martin Bienenstock of Dewey & LeBoeuf.