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GM Dissident Bondholders Pick Patton Boggs over White & Case
By Alison Frankel
June 15, 2009
When we picked Thomas Lauria and Glen Kurtz of White & Case as our Litigators of the Week last week, it was partly because the issues they'd raised in protesting Chrysler's government-backed deal with Fiat all the way to the U.S. Supreme Court promise to rear up again in General Motors's bankruptcy--and Lauria and Kurtz were expected to play the same spoilers' role in GM's Chapter 11 as they did in Chrysler's.

"I think we can be assured that GM will rely heavily on the blueprint that was used in the Chrysler case," Kurtz told us. "One of the e-mails that was produced in the Chrysler litigation specifically noted that Treasury was viewing Chrysler as a guinea pig...for GM." And just as the rebellious Indiana pension funds that opposed Chrysler's reorganization plan relied on the pit bull tactics of Lauria and Kurtz, so too were GM's bondholders expected to engage the White & Case duo to fight their battle.

But when GM bondholders protest the carmaker's plan to emerge from Chapter 11, it won't be Lauria and Kurtz doing the objecting. Brian Baxter at The Am Law Daily reported Monday that bondholders have hired Patton Boggs bankruptcy chair Michael Richman to take their case instead.

The bondholders did consider Lauria, according to Bloomberg, but picked Richman. "[W]e just thought [Richman] was a better fit for us," said dissident bondholder Mark Modica, a 48-year-old employee at a Saturn dealership. "It was a difficult decision."

Richman told The Am Law Daily he's already trying to differentiate his strategy from that of Lauria in the Chrysler bankruptcy. "We don't want to delay or prevent the transfer of assets from 'old GM' to 'new GM,'" Richman said. "Our issue is not with that reorganization plan, it's with the effort by the parties who put the plan together to dictate the capital structure and ownership of the company outside of a bankruptcy plan."

Richman told Baxter that he doesn't anticipate his clients' objections proceeding all the way to the Supreme Court. "I have a sense of cautious optimism that the bankruptcy court will say, 'Follow the law,'" Richman said. "And if I'm right about that, I don't think we'll see this going to appellate courts."

http://www.law.com/jsp/tal/digestTAL.jsp?id=1202431485864&GM_Dissident_Bondholders_Pick_Patton_Boggs_over_White__Case

Bondholders want more than 10% (including their warrants). This will be a windfall they get more than 10%.