A half-dozen Am Law 100 firms have landed lead advisory roles on the proposed $11 billion merger of American Airlines parent AMR and US Airways Group—a Valentine’s Day deal that could create the world’s largest airline.
Thursday’s announcement that the two companies have agreed to merge follows months of negotiations that began when US Airways started circling its insolvent rival last year. Should the deal secure the required regulatory, shareholder, and creditor approvals, it would cap more than a decade of consolidation in the U.S. commercial aviation industry.
The AMR bankruptcy, which began when the carrier glided into Chapter 11 in November 2011, has already generated millions in legal fees for a variety of firms. AMR alone is paying at least 17 law firms— including the now-defunct Dewey & LeBoeuf—and navigating the looming regulatory approval process is likely to fatten at least some of those firms’ coffers even more.
Weil, Gotshal & Manges is serving as lead bankruptcy and deal counsel to longtime client AMR through corporate and M&A partners Thomas Roberts and Glenn West—the managing partner of the firm’s Dallas office—and business finance and restructuring partners Stephen Karotkin and Alfredo Perez.
West and Roberts both split their time between New York and Dallas and also sit on Weil’s management committee. The firm has a longtime client relationship with Fort Worth–based AMR, and Roberts was named an American Lawyer Dealmaker of the Year in 2001 for advising the company on its $500 million purchase of the assets of bankrupt Trans World Airlines. (Roberts, who chaired Weil’s corporate group from 2000 to 2011, was also named an American Lawyer Dealmaker of the Year in 2012 for his work advising Kinder Morgan on its $38 billion acquisition of El Paso Corporation.)
Another key lawyer working with AMR is Mary Korby. A former corporate partner at Weil, Korby left the firm on January 1 after reaching its mandatory retirement age and joined K&L Gates in Dallas, according to sibling publication Texas Lawyer. Korby has continued to advise AMR at K&L Gates, according to those close to the negotiations.
Other Weil lawyers working on the mega-merger include corporate partners Corey Chivers and Ted Waksman, bankruptcy partner Stephen Youngman, tax partner Stuart Goldring, executive compensation and employee benefits partner Michael Kam, litigation partner Richard Rothman, corporate governance partner Holly Gregory, tax counsel Max Goodman, restructuring counsel Michele Meises, and associates Jennifer Britz, Barbra Broudy, Pablo Falabella, David Gail, Dilen Kumar, Eric Schecter, Sunny Singh (he of Lehman Brothers bankruptcy billing fame), Ben Solaimani, Audrey Susanin, Ryan Taylor, Brett Thorstad, and Gavin Westerman.
Bankruptcy court records show that Weil has been paid more than $38.9 million by AMR since the start of the company’s Chapter 11 case through December 31. The Am Law Daily reported last year that Weil received $9.9 million in fees from AMR in the year prior to its Chapter 11 filing, including a $2.2 million retainer to advise on the airline’s restructuring.
As a matter of comparison, Kirkland & Ellis once reaped more than $100 million in fees for its work handling the three-year bankruptcy of United Airlines that ended in 2006. Davis Polk & Wardwell billed for more than $40 million in fees as a result of its role advising Delta Air Lines on its Chapter 11 proceedings that concluded in 2007.
Other Am Law 100 firms have also reaped the benefits from AMR’s 14 months in bankruptcy court.