Skadden’s appointment in the case—confirmed by a firm spokesman—came several hours after its lawyers and those from the other firms being considered for the coveted AMR role made their pitches to creditors’ committee representatives in a packed conference room at the Sheraton New York Hotel in midtown Manhattan.
The other firms vying for the assignment included: Akin, Gump, Strauss, Hauer & Feld; Kirkland & Ellis; Milbank, Tweed, Hadley & McCloy; Morrison & Foerster; Pachulski Stang Ziehl & Jones; and SNR Denton.
Skadden’s selection is somewhat suprising given that the firm frequently does debtors’ side work. Skadden corporate restructuring partner John “Jack” Butler, Jr., for instance, represented US Airways Group, Inc. as lead debtors counsel in the early 2000s, according to his bio on the firm’s Web site. Butler is among the Skadden attorneys working on the AMR matter, along with global head of corporate restructuring Jay Goffman and corporate restructuring partners Ron Meisler and Felicia Gerber Perlman, according to a firm spokesman.
The prospect of landing the creditors’ committee work drew a major crowd to the Sheraton Monday morning. Some 250 people—most of them lawyers, but also plenty of bankers and accountants—crammed into an overheated 60-by-70 foot conference room in the hotel’s basement for three hours while Brian Masumoto, a lawyer representing the U.S. Trustee’s office, deliberated over committee appointments.
It’s not suprising that the chance to win the assignment attracted a scrum. Fees for professional firms working on AMR’s Chapter 11 case are likely to be first-class. During the three-plus years that United Airlines parent UAL was in bankruptcy in the mid-2000s, the company spent $8.6 million a month on legal and professional fees for itself and its creditors committee, according to Airliners.net.
Fort Worth–based AMR filed for Chapter 11 protection in bankruptcy court in Manhattan on November 29, listing $24.7 billion in assets and $29.6 billion in debt.
When Masumoto announced the formation of an official creditors’ committee in the AMR case shortly before 1 p.m, the panel included nine members: the Allied Pilots Association; Transport Workers Union of America AFL-CIO; the Association of Professional Flight Attendants; Manufacturers and Traders Trust Company; Wilmington Trust, N.A.; Band of New York Mellon Corporation; the Pension Benefit Guaranty Corporation; HP Enterprises; and Boeing.
The committee’s first job was to select the professional advisory firms. Each of the seven law firms on hand made pitches of roughly 15 minutes, according to one lawyer involved.
Conspicuously missing among firms making a pitch, though present at the meeting: Otterbourg, Steindler, Houston & Rosen, which recently advised the creditors’ committee on the nearly two-year-long Northwest Airlines’ bankruptcy. The firm also served as lead committee counsel on the bankruptcies of US Airways and Hawaiian Airlines.
As previously reported by The Am Law Daily, Weil, Gotshal & Manges is serving lead bankruptcy counsel to AMR. Weil bankruptcy partners Harvey Miller and Stephen Karotkin were both on hand for Monday’s meeting.
The firms that weren’t tapped to represent the creditors’ committee could still be in the running for a variety of ancillary representations, such as conflicts counsel, special litigation counsel, and labor counsel. In 2005, for example, Delta Air Lines relied on seven law firms and four financial advisory firms for its bankruptcy work.
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