UPDATE: 4/1/13, 3:40 p.m. EDT. Akin Gump Strauss Hauer & Feld has registered to lobby for U.S. Airways on its potential merger with AMR, according to sibling publication The Blog of Legal Times.
A month after nearly a dozen Am Law 100 firms climbed aboard the proposed $11 billion merger between US Airways Group and American Airlines parent AMR, a U.S. bankruptcy judge in Manhattan has approved a deal that would join the two and create the world’s largest commercial air carrier.
While the merger still requires the approval of US Airways shareholders and the U.S. Department of Justice’s antitrust division, a squadron of lawyers and lobbyists continue to labor behind the scenes to overcome any potential regulatory turbulence.
O’Melveny & Myers labor and employment partner Robert Siegel, who is leading a team from the firm advising US Airways pilots, spoke earlier this month with sibling publication Corporate Counsel about how agreements between unions representing both airlines’ employees helped push the merger deal closer to completion.
In addition to O’Melveny, other firms working on the US Airways side of the matter include Latham & Watkins, Dechert, and Cadwalader, Wickersham & Taft, according to our previous reports. For its part, AMR has lined up an all-star team from Weil, Gotshal & Manges, Sheppard, Mullin, Richter & Hampton, Paul Hastings, Morgan, Lewis & Bockius, Jones Day, K&L Gates, Debevoise & Plimpton, and several other firms.
Last month, The Am Law Daily examined what each firm has billed so far in the Chapter 11 case, which began in November 2011 when AMR filed for bankruptcy in Manhattan. Not surprisingly, those fees keep climbing. The Dallas Morning News, which has been following the proceedings involving Fort Worth–based AMR closely, noted earlier this month that Sheppard Mullin has sought to increase its role as special union counsel by representing the debtor in a potential battle with mechanics.
The total amount in fees and expenses spent on outside professionals in AMR’s 15-month-old bankruptcy reached $250 million in March, according to the Morning News. Leading the way on the billing front: Weil, which to date has sought approval of fees and expenses totaling roughly $62.3 million. Substantial though it may be, that sum pales next to the fees the firm has racked up as lead debtor’s counsel in the Lehman Brothers bankruptcy: $454 million over more than four years as of January.
Below are some of the latest big bankruptcies and their legal counsel of note. As usual, billing rates are listed in parentheses, when available.
Rural wireline telecommunications provider Otelco saw a disruption in service this week when it filed a prepackaged bankruptcy plan in Delaware on March 24. Otelco’s collapse into Chapter 11 came after Time Warner Cable severed a contract with the Oneonta, Alabama–based company for wholesale network connections, according to The Deal.
Willkie Farr & Gallagher business reorganization and restructuring partner Rachel Strickland is leading a team of lawyers from the firm advising Otelco in the Chapter 11 case. A declaration by Strickland shows that Willkie has received payments totaling $871,639 from the company in the period preceding its bankruptcy filing. (Willkie lawyers are billing the debtor between $420 and $1,130 per hour.)
Steven Khadavi ($820), cochair of the capital markets practice at Dorsey & Whitney in New York, is serving as special corporate counsel to Otelco, along with tax partner Kim Severson ($675) and finance and restructuring partner Michael Pignato ($625).
Dorsey partners are billing between $625 and $820 per hour and nonpartner lawyers between $360 and $455, according to court filings. Otelco paid Dorsey roughly $412,000 in the 90 days prior to its bankruptcy case, not including a $200,000 retainer to the firm to advise it going forward.
Edmon Morton ($595), a restructuring partner at Delaware’s Young Conaway Stargatt & Taylor, is serving as local counsel to the debtor. A declaration by Morton reveals that his firm received roughly $200,000 so far from Otelco for its services. Otelco’s general counsel is Trina Bragdon.
Just 11 months after its grand opening, the revelry at Revel AC was dampened this week with the Chapter 11 filing by Revel Entertainment, the owner of Atlantic City’s newest casino. Revel, which lists assets of $1.1 billion against liabilities of $1.5 billion, reached an agreement with lenders for a prepackaged bankruptcy filing that will allow it to trim about $1 billion in debt.
Kirkland & Ellis restructuring partners James Sprayregen, Marc Kieselstein, and Nicole Greenblatt are leading a team from the firm advising Revel that includes litigation partner Michael Slade. In February, Revel announced a debt-for-equity agreement with lenders after missing a $20 million quarterly interest payment. (Reuters reports that Kirkland also got the call this week to advise struggling hybrid carmaker Fisker Automotive on a possible bankruptcy filing, and the firm is currently advising private equity firm Sun Capital on its acquisition of bankrupt British bed retailer Dreams.)
Morton Branzburg, a founding member of Philadelphia’s Klehr Harrison Harvey & Branzburg and cochair of the firm’s bankruptcy and corporate restructuring practice, is serving as local counsel to the debtor, along with partners Domenic Pacitti and Carol Ann Slocum in Wilmington and Cherry Hill, New Jersey.
Neither Klehr Harrison nor Kirkland has yet filed billing statements with the bankruptcy court in Camden, New Jersey. According to a list of Revel’s 50 largest unsecured creditors, the debtor owes $829,713 to Boston’s Cooley Manion Jones.
Earlier this month the State Bar Association of New Jersey pulled its annual meeting from Revel and hired Ballard Spahr to deal with any potential damages claims stemming from its decision, according to sibling publication the New Jersey Law Journal. Mary Helen Medina serves as general counsel for Revel Entertainment, which, like many East Coast casinos, has suffered financially due to the economic downturn and increased competition by new gaming facilities in nearby states.
Cadwalader, which last month hired former JPMorgan Chase North American M&A cohead James Woolery, has taken the lead in Revel’s Chapter 11 case for the financial services giant, which is acting as administrative agent and lead debt-arranger. John Rapisardi, cochair of Cadwalader’s financial restructuring group, is the lead partner working on the matter.
Paul, Weiss, Rifkind, Wharton & Garrison bankruptcy partner Andrew Rosenberg and Fox Rothschild restructuring partner Michael Viscount Jr. are representing a steering committee of Revel lenders.
If Revel is looking to book top acts to help balance its books, it might look to Dionne Warwick, the 72-year-old songstress now down to her last $1,000. Warwick, a cousin of the late Whitney Houston, listed only $25,500 in assets as she filed for Chapter 7 this week in Newark.
Daniel Stolz, a name partner at Milburn, New Jersey–based Wasserman, Jurista & Stolz, is advising Warwick in the Chapter 7 case. Court filings show that Stolz has agreed to accept $5,000 for his efforts in the matter. Jay Lubetkin of Livingston, New Jersey–based Rabinowitz, Lubetkin & Tully has been named trustee for Warwick’s Chapter 7 case.
Warwick lists her monthly income at roughly $21,000, most of which comes in the form of royalties paid by an entertainment management company. She is also eligible to receive $2,200 in monthly Social Security payments and another $14,000 in pension and retirement income from the SAG-AFTRA union ( formed through a merger last year).
The bulk of Warwick’s net worth can be measured in artwork, furniture, and two fur coats and two pairs of diamond earrings. Warwick’s financial foibles are the result of mounting interest payments and penalties stemming from $10.7 million in tax debt due to the Internal Revenue Service and the state of California that dates back to 1961, a burden her spokesman claims is the product of years of financial mismanagement.