The Talent

August 7, 2009 5:45 AM

Dealmaker of the Week: James Bromley of Cleary Gottlieb

Posted by Julie Triedman

Bromley Cross-border insolvencies are the real test of globalization, Cleary Gottlieb Steen & Hamilton's James Bromley says.

The global bankruptcy practice leader should know. As lead counsel for Nortel Networks' U.S. businesses in Chapter 11, Bromley, 44, has been helping the Canadian telecom giant manage the intricate but fast-moving process of carving up and selling pieces of the company in several jurisdictions at once.

Recent weeks have brought a steady stream of major developments in this process. That's meant a lot of juggling for Bromley, who in recent months was also serving as counsel to the United Auto Workers in the GM and Chrysler bankruptcies.

On Tuesday, Nortel won approval in concurrent bankruptcy proceedings in Delaware and Ontario to sell its enterprise solutions business to stalking horse bidder Avaya Inc.. Under bankruptcy court rules, other bidders are expected to participate in a September 11 auction in New York that should prove to be as lively as other recent actions in the bankruptcy.

On July 24 Bromley ran the U.S. court-authorized auction of Nortel's wireless assets. The stalking horse bidder, Nokia Siemens, had placed a "floor" on the bidding with a $650 million accepted offer. But under U.S. bankruptcy court procedures, which Bromley says the Canadian courts follow under their more flexible Companies' Creditors Arrangement Act (CCAA), other interested parties can up the ante at auction.

The wireless assets auction, Bromley says, was as global as it gets. Roughly 100 people gathered in the largest conference room in Cleary's lower Manhattan offices--bidders from Sweden, Finland, Germany, and the United States sat around a U-shaped table. Nortel, a Canadian-born global enterprise, sat at one end. Some 50 Cleary lawyers worked behind the scenes. After 13 hours and seven rounds of bidding, Ericsson won with a $1.13 billion offer, double Nokia Siemens' original bid.

"There's no doubt that the international insolvency system is moving toward a U.S. philosophy of trying to keep businesses together through orderly sales," Bromley says. "Nortel's experience really drove home how flexible and adaptive that process can be."

The process has not been without its detractors. This week, a Canadian parliamentary committee agreed to hold an emergency hearing Friday to review the sale to Ericsson. Another Canadian player in the industry, Research In Motion, claims that it was shut out of the auction, and has successfully fanned fears voiced by the Canadian opposition party that the deal will cede Nortel's "crown jewel" patent portfolio to foreign hands.

"This has been enormously educational for me," says Bromley. From a "wonky lawyer's" perspective, he adds, the Nortel deals are the most interesting he's handled in his career. "It's been an amazing experience."

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