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March 31, 2009 7:56 PM

Eight Firms Advising on Future of U.S. Auto Industry

Posted by Brian Baxter

UPDATE: Apr. 1, 9:45 a.m. Bloomberg reports that the Obama administration believes a quick, negotiated bankruptcy is the best way for GM to survive. Click here for Cadwalader's $417,562.50 Treasury Department contract.

News out of Detroit late on Tuesday had the new chief executive of General Motors, Frederick "Fritz" Henderson, admitting that a bankruptcy filing was looking increasingly likely for the distressed auto giant.

While we've delved into how such a process would unfold in this space before, recently we've been working on updating much of our coverage of the past several months on who is advising GM, Chrysler, Ford, the Treasury Department, and other related parties.

Dewey & LeBoeuf business solutions and governance chair Martin Bienenstock is advising GM on its restructuring options along with M&A partner Gary Apfel and business solutions partners David Cleary and Michael Kessler. Weil, Gotshal & Manges's Harvey Miller, the dean of the bankruptcy bar, is also advising GM.

That got us thinking about the many Miller protégés working on the GM matter with Weil work experience, a link noted by our friends at The Wall Street Journal's Law Blog earlier today.

Bienenstock left Weil in November 2007 to found Dewey's business solutions practice. This past January, Kessler defected from Weil to join Bienenstock at Dewey.

Jones Day's New York-based restructuring and reorganization cohead Corinne Ball, another Weil alum just named one of our Dealmakers of the Year, is leading a team from the firm advising Chrysler on its restructuring options. (In December we used some fancy photo work to suss out the rest of the Jones Day team counseling Chrysler.)

Not to be forgotten are Cadwalader, Wickersham & Taft financial restructuring cochairs Deryck Palmer and John Rapisardi, both of whom left Weil in March 2007 and are now advising Treasury on its auto industry restructuring initiatives. (Rapisardi actually briefly left Weil in 2001 to join Ball at Jones Day, but later returned to the firm.)

And while the gap between automakers and regulators remains wider than an array of Chevy Suburbans, there are also non-Weil commonalities bringing these auto advisers together.

It turns out that Cadwalader chairman W. Christopher White is the brother-in-law of Treasury's lead auto adviser Steven Rattner, a private equity executive formerly with the Quadrangle Group. Rattner's wife, Maureen White, is the Democratic Party's former national finance chair.

Car czar connections aside, Chrysler likely wouldn't be able to pursue its current tie-up with Italy's Fiat if GM hadn't paid $2 billion to terminate its alliance with the Turin-based automaker in 2005.

Advising Fiat on that deal was Palo Alto-based Sullivan & Cromwell M&A partner Scott Miller, who has enjoyed a long-standing relationship with Fiat's fast-driving CEO Sergio Marchionne.

Miller is now leading a cross-continent legal team from S&C that includes M&A partner Eric Krautheimer, tax chair Andrew Solomon, executive compensation partner Matthew Friestedt, and antitrust partners Juan Rodriguez and Steven Holley. They're all working to help Fiat finalize the terms of a 20 percent stake in Chrysler within a 30-day window mandated by the Obama administration.

Chrysler, which is owned by private equity giant Cerberus Capital Management, has tapped a team from Schulte Roth & Zabel in New York for advice on the Fiat deal. Schulte Roth M&A partners Marc Weingarten and Richard Presutti, finance partner Robert Keisel, and tax partner Alan Waldenberg are serving as counsel to Chrysler.

While the time frame might be tight, the government's demands leave little room for negotiation. With last year's merger talks between Chrysler and GM now dead, Fiat is Chrysler's only available option, short of a Chapter 11 filing.

It's an eventuality that GM seems to have accepted, even if its Motor City rival Ford, being advised by lawyers from Davis Polk & Wardwell and Shearman & Sterling, remains resistant to accepting government handouts.

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