The Work

August 2, 2011 3:49 PM

Get Him to the Greeks: Distressed Nation Taps Cleary's Buchheit

Posted by Brian Baxter

Lee Buchheit

Lee Buchheit, a Cleary Gottlieb Steen & Hamilton corporate and international finance partner known to many struggling sovereigns, has been retained by the Hellenic Republic as it puts together a massive debt buyback plan.

Greece is currently enacting a set of controversial austerity measures and other financial reforms after reaching a $157 billion economic rescue accord in late July with European leaders. The bailout package is aimed at staving off a complete collapse of Greece's economy—an event that could bring financial ruin to some of Europe's biggest banks.

The aid package includes a bond exchange involving banks, insurers, and other debt holders that is meant to help cover Greece's funding needs into 2014 and keep the country from defaulting on its obligations. Last week, Greece hired three major banks—BNP Paribas, Deutsche Bank, and HSBC—and Cleary Gottlieb to advise it on the planned bond swap, which the national government hopes to complete this month. The end result of the swap will be a financing facility to be used to manage the country's debts.

Cleary Gottlieb's Buchheit has a wealth of experience representing distressed international clients, having previously advised Argentina, Chile, Mexico, and most recently Iceland on their respective sovereign debt woes. Other members of the Cleary team advising Greece include corporate finance and debt restructuring partners Andrés de la Cruz in Buenos Aires, Andrew Shutter in London, Giuseppe Scassellati-Sforzolini in Rome, and Barthélemy Faye in Paris.

Buchheit was traveling Tuesday and not immediately available for comment on his work for the Greek state. He did, however, speak with The Am Law Daily in June about what measures the country should adopt to avoid a financial collapse. Buchheit has also cowritten two legal journal articles on how to solve the Greek debt crisis with Duke Law School professor G. Mitu Gulati, the first of which was published in May 2010; the second in April of this year.

Buchheit and Gulati's proposal for solving the crisis is centered on the idea that Greece needs to ensure voluntary bondholder participation in the country's restructuring by stressing to the bondholders that more than 90 percent of the country's foreign debt is governed by Greek law. (The Financial Times has a further breakdown on the plan proposed by Buchheit and Gulati.)

The Organization for Economic Cooperation and Development announced this week that the Greek rescue package negotiated by the European Union, International Monetary Fund, and European Central Bank would only slightly reduce the country's debt and that any economic recovery will be a longtime coming. But the OECD also stated that the Greek government had adopted "impressive" reforms that could push the nation back toward fiscal responsibility.

Meanwhile, other Am Law 100 firms hoping to score some work advising the next member of the so-called euro zone to hit the financial skids might be waiting for a while. The Wall Street Journal reports Tuesday that the EU has no plans to provide emergency rescue loans to Italy or Spain, two countries that have spiraling debt and budget issues of their own.

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