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Chrysler bankruptcy lawyers reportedly ask to be paid up-front

Jonathon Ramsey — Wed, 13 May 2009 10:30:00 EST

Filed under: Government/Legal, Chrysler, Earnings/Financials

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]

Chrysler bankruptcy lawyers reportedly ask to be paid up-front originally appeared on Autoblog on Wed, 13 May 2009 10:30:00 EST. Please see our terms for use of feeds.

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REPORT: If Chrysler liquidates, 38,500 jobs would be lost

Michael Harley — Fri, 01 May 2009 13:58:00 EST

Filed under: Government/Legal, Plants/Manufacturing, Chrysler, Fiat

A court filing by the legal firm Jones Day estimates that 38,500 Chrysler workers will lose their jobs if the bankrupt automaker fails to quickly form an alliance with Fiat SpA and is forced to liquidate. In addition, if the deal with Fiat is rejected Chrysler LLC employees will lose $9.8 billion in benefits and $2 billion in pension payments, according to the legal team.

"Time is of the essence," said attorney Corinne Ball. The lawyers, in court seeking to organize the company's 25 affiliates into a one bankruptcy proceeding, stressed in yesterday's so-called first-day pleadings that if Chrysler dissolves, "it will mean the end of an iconic, 83-year-old American car company."

[Source: Bloomberg | Image Source: Bill Pugliano/Getty]

REPORT: If Chrysler liquidates, 38,500 jobs would be lost originally appeared on Autoblog on Fri, 01 May 2009 13:58:00 EST. Please see our terms for use of feeds.

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Chrysler hires bankruptcy lawyers... you know, just in case

John Neff — Fri, 05 Dec 2008 14:29:00 EST

Filed under: Government/Legal, Chrysler

The Wall Street Journal is reporting that Chrysler LLC has retained the services of law firm Jones Day, which specializes in representing companies as they go through the process of filing for Chapter 11 bankruptcy. Chrysler reportedly hired the law firm several weeks ago, anticipating that its counsel may be required if the $7 billion in government bridge loans it has requested are not approved before the end of the year. Sources say that Corrine Ball is the lawyer tasked with handling Chrysler's situation should bankruptcy remain the only option. She has worked on the Dana Corp. bankruptcy, several UAW cases and represented General Motors in its acquisition of Daewoo.

While Chrysler hopes that new testimony hearings this week in front of both the Senate and House of Representatives leads to approval of its request for aid, politicians repeatedly grilled CEO Bob Nardellli on why the automaker's owner, private equity firm Cerberus Capital Management, can't save Chrysler with its own money. The retention of bankruptcy counsel, however, suggests that Cerberus is perfectly willing to let Chrysler enter Chapter 11 bankruptcy rather than infuse it with more of its own cash.

[Source: Wall Street Journal, sub. req'd]

Chrysler hires bankruptcy lawyers... you know, just in case originally appeared on Autoblog on Fri, 05 Dec 2008 14:29:00 EST. Please see our terms for use of feeds.

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