Legal News

First Tab from Jones Day to Chrysler: 18.5 Million

By Ashby Jones

Let us make a statement that’s become increasingly obvious in recent weeks: the practice of bankruptcy can be lucrative. Very lucrative.

According to a story in the American Lawyer, Jones Day, debtor counsel to the newly bankrupt Chrysler LLC, has already charged its client $18.5 million for its services. The fee encompasses far more than the work Corinne Ball et al. have performed for the company since its filing last week. Jones Day and Chrysler first established a retainer back in November. Click here for a LB post from Friday on Jones Day and its tab.

The Chrysler bankruptcy may not end up being quite as lucrative as the Lehman Brothers bankruptcy, in which debtor counsel Weil Gotshal & Manges has already billed the firm $55 million. Despite its high profile and myriad complexities — many of which have to do with significant involvement from the Obama administration — the Chrysler bankruptcy is a good deal smaller than Lehman.

The only other firm application so far is that of Togut, Segal & Segal, which will serve as conflicts counsel for Chrysler and advise on any matters that present a conflict for Jones Day. Togut partners will bill between $760 and $890 per hour.

One other interesting tidbit from the filing, unearthed by the American Lawyer: According to the firm’s engagement letter from November, Jones Day was advising General Motors in its talks with private-equity firm Cerberus on a possible GM-Chrysler mega-merger. Should those talks reopen, Jones Day would still advise GM and build a wall between its GM and Chrysler teams, the letter says.

Full post as published by Law Blog - WSJ.com on May 04, 2009 (boomark / email).