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October 14, 2008 5:17 PM

Cravath, Schulte Roth Involved in GM-Chrysler Talks

Posted by Brian Baxter

As preliminary merger discussions between General Motors and Chrysler continue, The Am Law Daily has learned that New York's Cravath, Swaine & Moore and Schulte Roth & Zabel are advising the two ailing auto giants.

Sources familiar with the talks say that Schulte Roth M&A partner Marc Weingarten is advising longtime client Cerberus Capital Management. The New York-based private equity firm bought Chrysler from Stuttgart, Germany-based Daimler for $7.4 billion in 2007--roughly $30 billion less than Daimler paid for the company in 1998.

Weingarten was named a Dealmaker of the Year by The American Lawyer in April 2007 for his work representing Cerberus on its purchase of a 51 percent stake in GMAC, the previously wholly-owned financial services arm of GM formerly known as General Motors Acceptance Corporation. (Business reports have speculated that GM could exchange its remaining 49 percent stake in GMAC to Cerberus for Chrysler.)

Robert Joffe, who served as Cravath's presiding partner until 2006, is outside counsel to GM's board of directors. The renowned antitrust expert is perhaps best known for his work representing longtime Cravath client Time Warner.

Sources familiar with the deal discussions say that Joffe and GM executives are the individuals predominantly involved in preliminary negotiations, with GM's substantial roster of in-house legal talent--such as general counsel Robert Osborne--likely being tasked with any initial legal work.

"[Discussions] are very preliminary at this point in time and it's probably no better than 50-50 that this [potential merger] will actually happen," says one lawyer knowledgeable of the situation.

It's understood that outside counsel for the two U.S. auto industry mainstays have not yet have spoken with one another.

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