According to a Sara Randazzo May 13 article for American Lawyer, Jones Day has emerged victorious in their bid to represent the Motor City for the following its recent bankruptcy filing. Facing more than $15 million in long term debt obligations, Detroit Mayor Dave Bing announced on March 11 that Jones Day would serve as the city’s primary restructuring counsel.
Randazzo notes that while Bing’s announcement may have seemed “ho-hum”, the selection process which ultimately landed Jones Day at the top was anything but simple. The selection process involved 14 total firms, with 9 from the AmLaw 200. After sending out an RFP (which can be viewed here) and hearing an official pitch from each firm, Detroit evaluated their potential suitors based on an elaborate 24-point scoring system with the highest scoring firm being the one the city would hire. The rankings system included rewarding firms for deep ties to Detroit and Michigan, along with points given for “experience with large debtor-side bankruptcies, Chapter 9 municipal bankruptcies, and public finance work; and the potential for conflicts to arise if it took on the assignment.” The final rankings shook out as follows:
- Jones Day, 21 points
- Foley & Lardner (with Klee Turchin), 20 points
- Miller Canfield (seeking local counsel role only), 19 points
- Orrick Herrington, 19 points
- Dykema Gossett, 18 points
- Sidley Austin, 18 points
- McKenna Long & Aldridge, 17 points
- Weil Gotshal & Manges, 17 points
- Lewis & Munday, 14 points
- Skadden Arps, 14 points
- Butzel Long, 12 points
- Plunkett Cooney, 12 points
- Jaffee Raitt (seeking local counsel role only), 10 points
- Stutman Treister & Glatt, 9 points
Size and experience proved to be what separated Jones Day from the pack. According to Randazzo, Jones Day’s 209 page winning proposal “highlighted the firm’s extensive experience on bankruptcy assignments, as well as its expertise in municipal finance, public-private partnership, governmental entity representation, labor, employee benefits, and public pension work.” Jones Day was also the largest firm to submit a bid, thus the firm was able to leverage their 2,400 lawyers and highlight the advantages they felt they maintained due to their resources and capabilities. The proposal listed more than 100 representative clients and detailed many of the bankruptcy matters the firm has handled previously, including:
- Chrysler’s Chapter 11 case
- Derivatives counsel in the Lehman Brothers bankruptcy
- Counsel to Hostess Brands
- Special labor counsel in the General Motors bankruptcy
- Experience of many of their lawyers representing Orange County in its bankruptcy, though that work came before those lawyers joined Jones Day
The agreement reached includes a 3-phase fee structure for $3.35 million, where Jones Day will charge less at each stage than the amount expected to be billed: “$1.125 million for an initial analysis; $1.9 million for planning; and up to $575,000 per month during the implementation phase. Any litigation, major transactions, or internal investigations were to be billed hourly in addition to these estimates.”