GM Bankruptcy a Gold Rush ... for Lawyers

Most complex filing ever will net hundreds of millions in legal fees
By Jason Farago,  Newser Staff
Posted May 26, 2009 7:07 AM CDT
The clock is ticking on the June 1 deadline for General Motors, and this make-or-break week is expected to bring more plant closures, employee concessions and other last-minute efforts.   (AP Photo/Carlos Osorio, File)
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(Newser) – GM's expected bankruptcy is bad news for thousands of auto workers, dealers and managers—but a bonanza for the lawyers and consultants orchestrating the most complicated Chapter 11 in history. Bankruptcy specialists who are already billing Chrysler, Lehman Brothers and the US government stand to make hundreds of millions of dollars from GM's restructuring, the New York Times reports. One firm representing GM billed Lehman $55 million for three months' work.

The GM filing, due by June 1, is expected to produce so much revenue—from office rentals to restaurant bills—that the Journal says cash-strapped Detroit wants the case to be filed in the local court. It's more likely that proceedings will be held in New York, where stakeholders ranging from unions to suppliers to the Treasury will all have legal counsel.  "I’ve never seen a bankruptcy that has such a happy face on it as this one," said one professor.