Legal News

To Handle Potential Bankruptcy, Chrysler Taps Jones Day

By Ashby Jones

This just in: Chrysler has hired Jones Day’s Corinne Ball to help handle bankruptcy and restructuring work. Here’s the story, from the WSJ’s Jeff McCracken and Mike Spector.

A Jones Day spokesperson declined to comment. A Chrysler spokeswoman couldn’t be reached.

Chrysler, which is majority-owned by private-equity firm Cerberus, says it needs a $7 billion capital infusion before year end. If that fails to materialize, a bankruptcy filing could be in the offing — and Jones Day would likely be the ones to handle the plum assignment. Ball, who cut her teeth at Weil Gotshal, has worked on other automotive bankruptcies, such as that of auto-parts supplier Dana and many cases involving the United Auto Workers union. She represented GM in its acquisition of Korean auto maker Daewoo.

The mere hiring of bankruptcy experts doesn’t necessarily mean a filing is imminent, says John Collen, a bankruptcy partner at Quarles & Brady in Chicago. “You can buy a parachute and not jump out of the plane,” he says. “But hiring a firm like Jones Day, one with the wherewithal to handle a Chapter 11 filing of that magnitude, is certainly a prerequisite to filing.”

Full post as published by Law Blog - WSJ.com on December 05, 2008 (boomark / email).