Chrysler’s Lawyer Must Cut Lender Deal Quickly, Attorneys Say
By Steven Church
May 1 (Bloomberg) -- Corinne Ball, the lawyer behind Chrysler LLC’s bankruptcy, is a “brilliant” strategist who will need to quickly cut a deal with lenders that forced the automaker into court protection, said attorneys who know her.
“Because she is involved, there is a better chance of a deal,” said attorney Margot B. Schonholtz, co-chairwoman of restructuring and creditor rights at the Kaye Scholer LLP law firm in New York. “I’d say if there is anyone who can find a solution, and if people want a solution, she is it.”
Ball, 55, with the Jones Day law firm in New York, is the lead lawyer on Chrysler’s bankruptcy, said David G. Heiman, another Jones Day lawyer who is also working on the case. President Obama blamed yesterday’s bankruptcy filing by the automaker on a group of hedge funds that refused to sign onto a final settlement.
“She is a brilliant lawyer,” Heiman said. Chrysler is probably the biggest case Ball has handled.
A group of holdout Chrysler lenders claimed yesterday that they are owed about $1 billion. The lenders and any hedge funds that also own Chrysler’s debt will have a voice in the bankruptcy case in New York because their claims are guaranteed by Chrysler’s assets, putting them among the first creditors to be paid.
“Tough Negotiator’
Ball is a “tough negotiator” with experience in handling large, complicated cases in which assets must be sold quickly, said lawyer Harvey Miller of Weil, Gotshal & Manges LLP, where Ball took her first job out of law school.
It is possible for Ball to negotiate an end to Chrysler’s bankruptcy case within 60 days, Miller said. Should the company stay in too long, it may never emerge, he said.
Getting bogged down in a protracted bankruptcy would scare away customers, Miller said.
“Without the consumer, you don’t have a business,” Miller said. Weil Gotshal is advising General Motors Corp., the biggest U.S. automaker, on its potential bankruptcy.
Through a Jones Day spokeswoman, Ball declined to comment yesterday.
Ball has worked on multibillion-dollar cases before, including the Olympia & York Cos., a real estate company that went bankrupt in the early 1990s, and Williams Communications Cos., a fiber-optics network operator that successfully exchanged about $5 billion in debt for equity and was later sold to Level 3 Communications Inc.
Avoiding Bluster
Ball succeeds in part by avoiding the posturing and bluster often associated with high-profile corporate lawyers, according to Schonholtz. She said Ball sets aside her ego and focuses on what is best for her client.
During tense negotiations with lenders and other creditors of Williams, Ball led negotiation sessions that lasted more than 24 hours, said Schonholtz, who represents lenders in bankruptcy court and has known Ball for 18 years. Schonholtz isn’t working on the Chrysler case.
At one such meeting in the Jones Day offices on 41st Street in Manhattan, Ball stopped the talks to announce that it was Schonholtz’s birthday.
“She made sure everybody knew it was my birthday,” Schonholtz said. “And then we went right back to the heated negotiations.”
Later, Ball and other lawyers presented Schonholtz with a cake.
After graduating in 1978 from George Washington University’s law school, Ball landed the job with Weil Gotshal, where she worked for 23 years. Her first case involved the Chapter 9 bankruptcy of New York City.
Ball helped auto-parts supplier Dana Corp. exit bankruptcy with a $2 billion financial package last year, just as the credit markets began to seize up.
“She can keep the whole case in her head,” said Henry Miller, chairman and managing director of Miller Buckfire & Co., who worked with Ball on the Dana bankruptcy.
The case is In re. Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.
Last Updated: May 1, 2009 00:01 EDT |
