- The Washington Times - Saturday, April 11, 2009

Weil Gotshal & Manges LLP may earn an estimated $230 million in legal fees should General Motors Corp. file for bankruptcy protection - more than the record that the firm is likely to take in advising Lehman Brothers Holdings Inc. on the largest bankruptcy in U.S. history.

GM may pay the lead bankruptcy counsel that much, topping the estimated $209 million Weil will charge Lehman, said Lynn LoPucki, who teaches bankruptcy law at the University of California at Los Angeles.

Weil, a longtime GM counsel now advising the company on restructuring, hopes to take charge of the bankruptcy case if the carmaker's out-of-court restructuring effort fails, said a person familiar with the 1,300-lawyer firm.

A bankruptcy for GM, the biggest U.S. automaker, might yield $1.2 billion for bankers, accountants and lawyers, surpassing estimated judge-approved charges of $906 million for Lehman, said Ms. LoPucki, who maintains a database to calculate fees.

Energy trader Enron Corp.'s three years of bankruptcy cost $757 million, including $149.4 million paid to Weil, she said.

More than 500 Weil lawyers worked on Enron, which collapsed in 2001, according to court papers.

“If GM wanted to get out of bankruptcy inside of a year, the number of lawyers needed could easily exceed the figure from Enron,” said Stephen Lubben, a professor at Seton Hall University School of Law in Newark, N.J. “That would be a very aggressive timeline for any large corporation.”

GM spokeswoman Renee Rashid-Merem declined to comment, as did Weil partner Harvey Miller, lead attorney in the Lehman case.

GM Chief Executive Officer Fritz Henderson has said the carmaker prefers to become viable out of court while being prepared to file for bankruptcy if that is necessary to cut costs. GM is speeding up preparations for a bankruptcy even as it seeks to avoid it, said people familiar with its plans. The U.S. government ordered GM to devise a restructuring plan by June 1 to justify $13.4 billion in taxpayer aid.

Weil's record-setting fees would come as the law-firm business slumps. Weil is paying newly hired junior lawyers to delay their arrival by as much as a year and a half, according to an internal memo posted online by the blog Above the Law. Weil spokesman Mike Ford didn't respond to an e-mailed request for comment.

The U.S. Treasury would have the power to knock fees down if it was lending money to help GM reorganize in court or guaranteeing the loans.

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