December 21, 2010 1:46 PM

Schulte, Simpson Advising on $6.3 Billion Sale of Chrysler Financial to TD Bank

Posted by Brian Baxter

The Toronto-Dominion Bank announced on Tuesday that it had reached a deal to buy Chrysler Financial from private equity firm Cerberus Capital Management for roughly $6.3 billion in cash, The New York Times reports. The acquisition price includes $5.9 billion in assets and $400 million in goodwill, according to Bloomberg and the BBC.

Alan Waldenberg, chair of the tax group at Schulte Roth & Zabel, is advising Cerberus on the sale of Farmington Hills, Mich.-based Chrysler Financial, along with corporate partner Richard Presutti, tax partner Dan Kusnetz, and associate Neil Rifkind.

The firm has long-standing ties to Cerberus, having recently represented the New York-based private equity firm on its $830 million investment in Caritas Christi Health Care. Schulte's Waldenberg and Presutti also advised Cerberus during bankruptcy proceedings last year of former Chrysler Financial parent Chrysler, helping negotiate a deal that put the ailing automaker in the hands of Italy's Fiat.

Cerberus's chief operating officer, managing partner, and general counsel Mark Neporent is a former Schulte partner, who left the firm in 1995 to join the buyout shop, which is one of the largest private equity firms in the U.S. (Chrysler Financial's general counsel is Tracy Hackman.)

Lee Meyerson, head of the M&A group at Simpson Thacher & Bartlett, is representing TD Bank on the transaction, along with M&A partner Ellen Patterson, tax head Steven Todrys, bank regulatory partner Gary Rice, securitization partner Laura Palma, employee benefits partner Andrea Wahlquist, East Coast IP cochair Lori Lesser, and labor and employment head and senior counsel J. Scott Dyer.

The Toronto-based bank is a longtime Simpson client, having turned to the firm in October 2007 for its $8.5 billion acquisition of Commerce Bancorp. Simpson also advised TD Bank on its unsuccessful effort to acquire Colonial Bancgroup last year.

TD Bank's board of directors includes three members with ties to Canadian law firms: Osler, Hoskin & Harcourt cochairman Brian Levitt, former MacPherson Leslie & Tyerman chairman and current counsel Harold MacKay, and Borden Ladner Gervais senior adviser Carole Taylor. Levitt will become chairman of the company's board in January. (TD Bank's general counsel is Christopher Montague.)

As noted by Dow Jones Newswires, TD Bank's buy of Chrysler Financial is the second major acquisition of a large U.S. lender by a Canadian bank in a week. Four firms in the U.S. and Canada advised on BMO Financial's $4.1 billion acquisition of Wisconsin bank Marshall & Ilsley on December 17.

The Chrysler Financial deal, which is expected to close in the second quarter of 2011, is also the latest to involve a finance arm of a major U.S. automaker.

Earlier this year, General Motors, advised by Andrews Kurth, bought auto finance company AmeriCredit for $3.5 billion in cash. GM sold off its GMAC financing arm in 2006 in an effort to deal with the automaker's escalating debt woes. GMAC turned to Wachtell, Lipton, Rosen & Katz in its effort to obtain federal bailout funds, convert to a bank holding company, and avoid the bankruptcy that befell its former parent. The Detroit-based company is now called Ally Financial.

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