The Work

October 13, 2008 9:30 AM

Simpson Thacher Wins Treasury Sweepstakes, Four Firms Decline

Posted by Zach Lowe

Update: Additional information has been added to this post, in the fourth paragraph below, about the law firms approached by the Treasury department.

The U.S. Treasury Department has chosen Simpson Thacher & Bartlett as its lead legal advisor on the $700 billion bailout plan from among a group of six law firms that were asked to consider taking the job, Interim Assistant Secretary for Financial Stability Neel Kashkari said in a speech Monday.

The department contacted the six firms Thursday to advise on the equity program's structuring. Only two of the firms responded. By Friday, Simpson Thacher had been tapped, Kashkari said. The firm began work immediately.

Partners at Simpson and a spokeswoman for the firm did not immediately respond to requests for comment. A Treasury spokeswoman did not immediately return calls seeking information about the other firms approached by the agency.

The Am Law Daily has learned that Davis Polk & Wardwell and Wachtell, Lipton, Rosen & Katz were among the six firms approached by Treasury, and both declined to submit proposals. Conflicts made an application by Davis Polk impossible, according to a source with direct knowledge of the matter. A spokesperson for Wachtell confirmed the firm was asked to be part of the process. No reason was given why Wachtell declined to participate.

As for the other three firms the government recruited, Treasury so far has refused to release their names or say whether the department sent out written requests for proposals.

Simpson has played a key role in advising various parties on matters relating to the global financial crisis. The firm is a longtime advisor to Washington Mutual, which collapsed last month before being scooped up by JPMorgan Chase. Simpson has also advised longtime client Lehman Brothers in the sell-off of some of the failed bank's most important assets, and has represented AIG's board of directors in bailout talks with the feds.

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First thing Simpson needs to do is a comprehensive report on all capital markets and the leading financial institutions with risk analysis and recommendations as to how the markets can be improved. This "economic Warren report" will cost many millions of dollars in legal fees and nobody will read it.

Is Wachtell too good to help America?

Wouldn't want to stoop to such a thing?

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