Cadwalader in driving seat for US auto restructuring work

A trio of US firms have won contracts worth up to $25.8m (£17.6m) to advise on auto industry restructurings, reports The Am Law Daily.

The US Treasury Department has awarded contracts carrying a ceiling value of $8.59m (£5.87m) to Cadwalader Wickersham & Taft, Sonnenschein Nath & Rosenthal and Haynes and Boone, which will see the firms provide advice to troubled car manufactures and suppliers.

Both General Motors and Chrysler face possible bankruptcy filings after President Barack Obama recently rejected their requests to keep billions of dollars in federal loans. New GM CEO Fritz Henderson has called a bankruptcy filing "more probable." Chrysler, meanwhile, is pushing to cut a deal with Fiat to stave off a filing.

Suppliers are also struggling, and the Treasury Department announced on Wednesday (8 April) that GM and Chrysler had initiated financing support programs for suppliers using $5bn (£3.4bn) in government funds.

Cadwalader restructuring partner John Rapisardi is the lead lawyer on the Wall Street firm's Treasury engagement.

At Sonnenschein, the lawyers representing the US Government on auto issues include capital markets partners Jeffrey Murphy, Robert McCarthy, Aimee Cummo, and Stephen Whelan. Also advising on Government work is corporate partner Lee Smith, who specialises in commercial lending and loan recovery, including bankruptcy exit financing.

Haynes and Boone's bankruptcy and business restructuring chair Stephen Pezanosky confirmed the six-month contract and said that he would be one of the partners working with the US Government on "restructurings and potential bankruptcies."

Cadwalader and Sonnenschein already had previously announced deals to advise the US Government on bailout-related issues, but for much smaller values. Cadwalader received a $417,562 (£285,000) contract in January to provide auto bankruptcy advice to the Government.

The Am Law Daily is the website of The American Lawyer, Legal Week's US sister title.