U.S. hires advisers for counsel on GM, Chrysler rescue

Two law firms has been retained by the U.S. government with broad bankruptcy know-how and the investment bank Rothschild to guide officials on the taxpayer-backed restructuring of General Motors and Chrysler LLC, a person with direct skill of work said. Last month U.S. Treasury hired New York law firm Cadwalader, Wickersham & Taft and will also deem a range of possibilities for striving automakers comprising the prospect of a bankruptcy funded by the U.S. government, the person said.

Cadwalader is coupled by Chicago-based law firm Sonnenschein, Nath & Rosenthal and Rothschild in running with U.S. officials as they prepare to assess turnaround plans being prepared by the two automakers, the person said.

A spokesperson for Sonnenschein in Los Angeles fortified that the company had been affianced to counsel Treasury on "continuing matters associated to the 2008-2009 growths within the U.S. automobile industry."

Melissa Anderson who is a spokeswoman told that the lawyers from Sonnenschein who are counseling the U.S. government are from the company’s capital markets which are based in New York. Representatives for Rothschild, GM, Chrysler and the U.S. Treasury were not able to reach immediately for the comment. Cadwalader didn’t have any comment.

GM and Chrysler executives have formerly ruled out a bankruptcy filing, saying that it would fast spin out of control into insolvency as buyers would be frightened away from buying novel cars and trucks from a ruin automaker. The sales of GM and Chrysler dropped by 50% in the previous month as the U.S. sales declined to the lowest monthly total in 27 years.

Few outside analysts had a dispute that without the risk of bankruptcy, the firms be short of the leverage that they require to take out profound concessions from bondowners and the UAW.

GM and Chrysler face a Feb. 17 deadline to submit updated restructuring plans to the U.S. government.

GM has been given $13.4 billion in emergency loans. Chrysler, which has a awaiting coalition with Italy's Fiat S.p.A., has been given $4 billion and is looking for another $3 billion.

Both firms have awaiting the end of March to display that they may be made "feasible" under the terms of a bailout approved in late December by the Bush management.
The Obama management has not yet chosen a "car czar" or other officials who would supervise the reform of the cash-strapped auto industry.

Further requests for aid remain pending. Ford Motor Co. has asked for a $9 billion line of credit if market situations get worse. Auto-parts providers have asked for more than $20 billion in government aid that would be either channeled through the car firms or loans that would given to them unswervingly.