Attorneys from Jones Day law firm representing Chrysler during bankruptcy have taken the unusual step of asking the judge to "give their fees special priority." Two reasons have been hypothesized for the move: the lawyers don't think there will be any money for trade debts from the leftover pieces of Chrysler; or the maneuver could be a ploy to get secured lenders to accept the proposed sale of Chrysler as is by suggesting that what's on the table now is as good as anyone is going to get.

As the bankruptcy plan now stands, the healthy portions of Chrysler will be cleaved off to Fiat, the U.S. and Canadian governments, and the United Auto Workers. That would leave the unhealthy portions to pay the bills. It is unlikely that Jones Day has signed on to a case in which it doesn't expect to be paid, but according to a law professor cited by Automotive News, a standard procedure is for the attorneys to take a share of the funds paid to secured creditors.

If the attorneys don't think they can get paid that way, and they don't like their chances getting funds from what's left over, then it has been suggested that the whole deal could "crater." This has also left other unsecured debtors to wonder what chances they have of seeing any money. However, until a clearer picture of Chrysler's finances emerges, it won't be known if this is a legal tactic or something born of genuine concern.

[Source: Automotive News, sub req'd]


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