GM advisers lose sleep and vacations in GM prep

U.S. attorneys and restructuring professionals rushed to pull together the third-largest U.S. bankruptcy filing before the U.S. government's deadline of June 1. Leading the charge were some of the country's top turnaround experts, who sacrificed getaways and showers to try to orchestrate an orderly bankruptcy for the former U.S. manufacturing giant.

"The majority of the work was probably done in the last 60 days," said Stephen Karotkin, who, together with Harvey Miller, represents GM as lead bankruptcy attorneys. "A lot of meals in the office, a lot of late nights for everyone. You get sick of deli food."

Advisers relied on adrenaline in the last few days before GM's court filing, and strategy calls flew back and forth, said those who took part in the negotiations.

Martin Bienenstock, chairman of the business solutions and governance department at Dewey & LeBoeuf LLP, who helped design the "New GM, Old GM" structure, fielded calls about GM while on a ski slope back in March, and the pace picked up as the filing grew closer.

The GM plan calls for the healthy units of the company to emerge quickly from bankruptcy while shuttered plants and other spurned assets would be left to liquidation under court protection. The preparations were "frenetic," said Bienenstock, who also teaches at Harvard Law School.

TOP TEAM

GM tapped Miller and Karotkin from Weil, Gotshal to represent its interests in bankruptcy court. Miller has led other high-profile cases including Lehman Brothers Holdings Inc and Bethlehem Steel Corp.

Karotkin represented Gate Gourmet in its cross-border out-of-court restructuring and was named a "Best Lawyer" in the specialty of bankruptcy and creditor-debtor rights law for the 2009 edition of The Best Lawyers in America.

Karotkin, who has been with Weil for 33 years, said Harvey "is the most talented, pragmatic attorney I have experienced in my career."

Weil Chairman Stephen Dannhauser said Karotkin "has a world of experience both on the creditor and debtor side of the ledger."

Albert Koch of turnaround firm AlixPartners was named chief restructuring officer for GM. Koch, who was not available to comment, helped steer Kmart through its Chapter 11 restructuring in 2002 and has worked behind the scenes for other troubled companies.

"Koch is the best, or one of the best, crisis managers in the U.S.," said Bienenstock. "There couldn't be a better choice for such an important assignment," he said, adding that Koch's strength lies in creating and maximizing value for troubled companies.

There will be little rest for advisers as the U.S. bankruptcy court in New York begins hearing the case. Karotkin, who did not sleep the night before the filing, said his team will focus on preparing for the hearing that will consider a proposed sale of the majority of the company's assets.

And the eyes of the world will continue to focus on the outcome for the former U.S. manufacturing giant. "This is a historic case," said Sheon Karol, a partner with restructuring firm CRG Partners.