Digging down on Weil’s GM Petition

Jim Millstein

The pre-petition bills for the GM bankruptcy are in, and they’re a doozy. All told, it’s just under $120 million.

After the jump, we put it in context and focus on the lawyers – including tracking down two of Weil’s “Connections with the Debtors”.

Weil Gotshal has put in for just over $54 million for fees and expenses. Just $1 million less than they did in six months of estate work on Lehman. The bill would have been somewhere over $65 million if it hadn’t been for the pesky conflicts – Jenner & Block billed $11 million for the conflicts work. “Special counsel” Honigman Miller billed $15 million (they’ve been doing a number of the asset sales in addition to the bankruptcy filing).

We were happy to see that Harvey Miller’s name is back on top of the pleadings, but Stephen Karotkin had to do the scutwork of preparing the affidavit. Joe Smolinsky bumps Raymond Gietz, though.

In the affidavit in support of the motion to retain Weil Gotshal, Karotkin disclosed a number of interesting facts.

Everyone is reporting the hourly rates: $650 to $950 for members and counsel, $355 to $640 for associates, and $155 to $290 for paraprofessionals.

But what about this from Section 6 (”WG&M’s Connections with the Debtors”) (emphasis added)?

6. WG&M compiled responses to the foregoing inquires for the purposes of preparing this Affidavit. Responses to the inquiry described in paragraph 5(g) hereof reflect that,as of the Commencement Date, various attorneys and staff people at WG&M or their relatives own immaterial amounts of GM stock or bonds. In addition, certain attorneys have relatives who work or worked for GM or its current or former affiliates, or who are employed by the United States Government, including one WG&M partner whose son is a senior restructuring officer for the United States Department of the Treasury. In addition, the spouse of a partner of WG&M is the Chief Judge for the United States Bankruptcy Court for the Southern District of New York, and certain WG&M attorneys clerked or otherwise worked with certain Bankruptcy Judges in the Southern District of New York. None of the foregoing individuals is currently directly involved in representing the Debtors in connection with these chapter 11 cases. Details of all the foregoing will be provided upon request.

The “WG&M partner whose son is a senior restructuring officer” for Treasury is the legendary Ira Millstein. His son, Jim, recently left Lazard to figure out how to get the government out of its investments in AIG, Fannie Mae, Freddie Mac, Citi, and Bank of America.

But wait! There’s more! Jim Millstein (Princeton BA, Berkeley MA, Columbia JD) spent 20 years in Cleary’s bankruptcy group before he went to Lazard in 2000. Both Jim and Ira go way back with GM. Millstein fils was involved in the UAW negotiations two years ago. Millstein pere

played a big role in a 1992 GM boardroom coup that, in the WSJ’s words, “made the elder Mr. Millstein a legal legend and was a watershed for American corporations — the end of an era when big-company CEOs ruled virtually unchallenged by directors or large shareholders.”

The other “connection” is between a judge and a Weil partner. Stuart Bernstein is the chief bankruptcy judge for the SDNY. His wife is Weil M&A partner Andrea Bernstein.

By the way, Weil’s junior associates need to step it up on the proofreading. Take a look at this paragraph from the affidavit:

16. Despite the efforts described herein to identify and disclose WGM’s connections with the parties in interest in these chapter 11 cases, because the Debtors are a large enterprise with numerous and complex relationships, WGM is unable to state with certainty that every client relationship or other connection has been disclosed. In this regard, WG&M will continue to apply the Firm Disclosure Procedures and if any new material relevant facts or relationships are discovered or arise, WGM will promptly file a supplemental disclosure with the Court.

Inconsistent use of defined terms is bad enough, but at least get your own firm’s name right! Tsk tsk.

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