Bailout Watch 574: Legal Bills To Pile Up Through 2010

Edward Niedermeyer
by Edward Niedermeyer

Compared to the tens of billions of dollars in lost taxpayer investments in GM and Chrysler, the lawyer bills for the twin bankruptcies are relatively inexpensive. The Freep reports that legal and consulting fees have already exceeded $120m, with another $3m pending for September and October, and more to come. According to court records, Chrysler’s chief financial advisors during its bankruptcy, Capstone Advisory Group, has received $17m in taxpayer money, with some $10m going directly to the firm’s Executive Director Robert Manzo. Chrysler’s lead counsel, Day Jones, received $40m through last August, and estimates place the firm’s eventual tab to total somewhere around $115m. GM’s bankruptcy advisors AlixPartners and Evercore Partners received $26m and $13m respectively, while its head lawyers, Weil, Gotshal & Manges received nearly $72m. And with the liquidations of Old GM and Chrysler far from over, the legal bills will continue to mount, likely past 2010.

Edward Niedermeyer
Edward Niedermeyer

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  • Kurkosdr Kurkosdr on Nov 30, 2009

    These advisors managed to come up with plans that effectively banned the private sector from purchasing the assets of GM and Chrysler, while at the same time convincing the judges that landing the assets into the hands of the government and the unions was the best choice. And that keeping the same corrupt managment that brought the company down in the post-bankrupty era is a wise choice. It takes a great deal of talent to do all these, so they are worth their million for sure.

  • Ponytrekker Ponytrekker on Nov 30, 2009

    Can I get me some of that gubment cheese legal work?

  • Ihatetrees Ihatetrees on Nov 30, 2009

    If I were these law firms and lawyers, I'd be pimpin' hard for Senator Corker and a solid GOP majority (and president?) in '12. Cutoff from from the taxpayer teat, GM and Chyrsler's new and improved BK filing will start the rain falling all over again.

    • Jeff Puthuff Jeff Puthuff on Dec 01, 2009

      " In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws — and provide a Federal loan to keep them operating while they try to restructure. But given the current state of the auto industry, my economic advisors believe that bankruptcy could now lead to its disorderly collapse — sending our economy into a deeper and longer recession."

      --- then-President George W. Bush, December 20, 2008, after authorizing $25 billion loans to Detroit automakers

      Dem or Rep, a vote is a vote is a vote. Folks, the real war is not between left and right, but between the 1% (who own/control half this country's wealth) and the rest of us.