US Appoints Firms as Auto Restructuring Advisers

The United States government has just made another step towards the restructuring process of the Detroit (it's actually Detroit 2 now since Ford is not anymore involved): it hired two law firms with bankruptcy experience and one investment bank to advise officials that will oversee GM and Chrysler restructuring plans, The Financial Times wrote today.

New York-based law firm Cadwalader, Wickersham & Taft LLP was appointed by the United States government as adviser in January. The Chicago-based law firm Sonnenschein, Nath & Rosenthal and Rothschild was also recently hired, the aforementioned source wrote quoting a person familiar with the situation. A Sonnenschein representative confirmed the report adding the firm has been hired to advise the Treasure on ”ongoing matters related to the 2008-2009 developments within the US automobile industry.”

In addition, the United States government is also expected to announce a car czar that would oversee the restructuring process of General Motors and Chrysler. Both American automakers are required to provide a viability plan to the US officials on February 17.

Even though recent rumors said Stephen Girsky, an ex-General Motors consultant, is one of the officials to oversee the process, Steven Rattner, partner of the New York-based Quadrangle Group, is likely to be named car czar in the upcoming weeks. In addition, House of Representatives Speaker Nancy Pelosi said last December Paul Volcker is the right person to oversee the restructuring plan of the American companies.

“I would want the czar to be appointed before one dollar was spent ... so theoretically this week. I think somebody like Paul Volcker, who has bipartisan confidence and the public and private confidence,” Pelosi said in December.