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GM Hires Lawyer Bienenstock to Create 21st Century Automaker
By Linda Sandler
Dec. 12 (Bloomberg) -- General Motors Corp. has been working with New York lawyer Martin Bienenstock of Dewey & LeBoeuf to devise an option for using the U.S. bankruptcy process to create a “futuristic” automaker for the 21st century, according to a person familiar with the contingency plan.
GM is asking for federal aid to enable the company to pay its bills as it restructures operations. One of GM’s restructuring options might be the program laid out by Bienenstock, 56, the lead lawyer for the Enron Corp. bankruptcy and an adviser to GM until 2007 while at New York-based Weil Gotshal & Manges.
Bienenstock’s strategy involves putting GM’s best brands into a new company, which would be sold to the public, with the proceeds going to the carmaker’s unions to secure their support. Redundant brands, surplus dealers and so-called legacy costs would be hived off in bankruptcy court.
While most bankruptcies filed to reorganize can take two years or more, Bienenstock has told GM the restructuring to modernize and streamline costs could be done in 30 to 90 days, according to the person.
Angelo Kakolyris, a spokesman for the Dewey firm did not immediately return a call left after business hours last night.
“Bankruptcy is not an option for our liquidity needs,” said GM spokesman Tony Cervone. “We’re doing everything we can do to avoid bankruptcy.”
Bienenstock left Weil Gotshal in 2007 to start a restructuring group at Dewey to help companies reduce the risk of bankruptcy. He told Bloomberg News in June that he took all his clients with him except for GM.
GM also has been working with Weil Gotshal to advise it on a possible bankruptcy, said a person familiar with that matter. The law firm’s spokesman Mike Ford didn’t respond to an e-mail last night requesting comment.
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net;
Last Updated: December 12, 2008 00:01 EST
By Linda Sandler
Dec. 12 (Bloomberg) -- General Motors Corp. has been working with New York lawyer Martin Bienenstock of Dewey & LeBoeuf to devise an option for using the U.S. bankruptcy process to create a “futuristic” automaker for the 21st century, according to a person familiar with the contingency plan.
GM is asking for federal aid to enable the company to pay its bills as it restructures operations. One of GM’s restructuring options might be the program laid out by Bienenstock, 56, the lead lawyer for the Enron Corp. bankruptcy and an adviser to GM until 2007 while at New York-based Weil Gotshal & Manges.
Bienenstock’s strategy involves putting GM’s best brands into a new company, which would be sold to the public, with the proceeds going to the carmaker’s unions to secure their support. Redundant brands, surplus dealers and so-called legacy costs would be hived off in bankruptcy court.
While most bankruptcies filed to reorganize can take two years or more, Bienenstock has told GM the restructuring to modernize and streamline costs could be done in 30 to 90 days, according to the person.
Angelo Kakolyris, a spokesman for the Dewey firm did not immediately return a call left after business hours last night.
“Bankruptcy is not an option for our liquidity needs,” said GM spokesman Tony Cervone. “We’re doing everything we can do to avoid bankruptcy.”
Bienenstock left Weil Gotshal in 2007 to start a restructuring group at Dewey to help companies reduce the risk of bankruptcy. He told Bloomberg News in June that he took all his clients with him except for GM.
GM also has been working with Weil Gotshal to advise it on a possible bankruptcy, said a person familiar with that matter. The law firm’s spokesman Mike Ford didn’t respond to an e-mail last night requesting comment.
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net;
Last Updated: December 12, 2008 00:01 EST
