Law Firms
Bankruptcy Boom Boost: US Asks Cadwalder to Advise On Automaker Restructuring
Posted Feb 5, 2009, 04:54 pm CST
By Martha Neil
An already-hot practice area apparently is being expanded with the help of a deep-pockets noncorporate client: The feds reportedly are paying top partners at a New York law firm for bankruptcy advice, as the government ponders how best to deal with struggling automakers.
"The U.S. Treasury Department hired Cadwalader Wickersham & Taft LLP to evaluate restructuring scenarios, including a possible bankruptcy funded by the government," Bloomberg writes, relying on unnamed sources.
Partners Deryck Palmer and John Rapisardi, who co-chair the firm's restructuring department, reportedly are heading the Cadwalader team.
One key issue on which the Treasury wants advice is whether $17.4 billion in federal loans to Chrysler and General Motors Corp. would get top priority for repayment, even though banks including Citigroup Inc. and JPMorgan Chase & Co. loaned the automakers money earlier, the news agency says.
Cadwalader is working with the Chicago-based Sonnenschein Nath & Rosenthal law firm as well as the Rothschild Inc. investment bank, both of which were retained earlier by the government.
At this point, the focus of their efforts is finding ways to help the automakers restructure short of actually filing for bankruptcy, according to Bloomberg.