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Cravath, Swaine To Advise On Harrisburg Bankruptcy Pro Bono, Will Charge Millions As Muni Default Dam Finally Breaks
Harrisburg, PA, whose bankruptcy is now about a year overdue, has just hired bankruptcy counsel: New York law firm Cravath, Swaine and Moore. The financial advisor has not been decided yet although the pitches there must be fast and furious, and probably involved every single bankruptcy advisory firm which recently has had exactly zero work courtesy of Ben Bernanke providing convertible DIPs at negative rates. Cravath took a tricky strategy to beat out other law firms: it would advise the city pro bono on its imminent Chapter 9. But don't think of it as money lost: think of it as league table credit, which will send the firm to the top of the ranks, and allow it to charge $1,000 an hour when the muni dominoes start tumbling left and right: after all Harrisburg is just the proverbial cherry pop. After it - the deluge. And the bankruptcy advisory vultures are already licking their chops over what will make the Lehman fee bonanza (now in the billions) seem like Greenspan's stingy monetary policy compared to Bernanke's global paradropping of Bennies.
From Dow Jones:
An elite New York law firm will advise Harrisburg City Council about a possible bankruptcy filing for free, while a state-appointed attorney will help city officials with immediate cash woes as Pennsylvania's capital teeters on insolvency.
The city council in a 6-0 vote late Tuesday approved hiring Cravath, Swaine and Moore, one of two finalists in its search for attorneys.
Councilman Brad Koplinski said Wednesday that council members were "pleasantly surprised" by Cravath's pitching its services pro bono, worth millions of dollars.
"We have someone in Cravath who we believe will give us a fair, impartial view of all of our options," Koplinski said.
Mayor Linda Thompson, who opposes a bankruptcy filing, welcomes the offer and will work with the attorneys, according to her spokesman Chuck Ardo.
"The firm will bring some reality into the picture," said Ardo, who said some in the city have misconceptions about municipal bankruptcy. "The firm, given its reputation, will advise the council in a much more realistic fashion."
As of yet it is unclear just what a bankruptcy will look like, and if Goldman is actively buying up the muni bonds in advance of a debt-to-equity, in which it will be the first bank to legally own the serfs making up the Harrisburg fiefdom.
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Yay finally.
So what's next? The commercial real estate bubble + margin compression?
Of course this means Rendell will be on another bender...
Don't you mean Craven, Swine and Much More?
Ha. I was tripping over "swine" every time I read that. Thank you for picking that up.
Must need more coffee.
Dr Howard, Dr Fine, Dr Howard
Ha ha. Takes me back.
The Law Office of Dewey, Cheatem, and Howe.
Some gags never grow old.
Readham & Weape ?
Sue, Grabbit and Runne ?
Dewey, Cheatham, and Howe
Attorneys bitchez!
Ah ha. So you too are old as dirt.
very young dirt, thank you.
I once worked for Low, Ball & Lynch in SF.
+5
The first taste is always free...after that the bitchez gotta pay for the flava!
First to set the legal precident, the first to charge for a pound of flesh.
The drug dealers will give you your 1st sample free of charge too
After they get Harrisburg prepped they can call the Governor's office in Cali. The whole state is a creaking wreck. They can develop a template for Chapter 9 and roll that like Grant taking Richmond.
Cougar
Are you messing with the levers and bells over in California again? Every time they put you in the drivers seat, it's as if every one's snorting catnip.
Are you spiking the milk bowl again? You know that's strictly for personal consumption, right?
Listen. It wasn't my idea. They were whining at the janitor to "do something" and he handed me his mop and said "take care of it."
Next thing I know I'm down in the basement pulling levers. I didn't even know there were actual levers. Sure as hell there are.
But yeah, the smack train is great. And it just keeps coming in. And did I mention the bimbos? Skanks mostly, but down in the basement you'll hit anything.
It is dark down there and they all smell the same anyhow.
One-eyed cat peeping at the seafood store.
Mr. B. Haley I presume still Rockin the clock. I go back a-way Milestones
B52s do counterfeiting circa 1983! They were so far ahead of their time.
http://www.youtube.com/watch?v=7oPuVAdGkk8
Make me stop writing bad checks. Come on punk, make my day.
"10,20,30 million ready to spend" Is that all?!
That's inflation for you...
As of yet it is unclear just what a bankruptcy will look like, and if Goldman is actively buying up the muni bonds in advance of a debt-to-equity, in which it will be the first bank to legally own the serfs making up the Harrisburg fiefdom.
Given their ownership of everything else, including politicians, this looks like a vertical integration strategy to me.
Nice marketing move by the law firm, though.
You say that so casually. Next thing will be no elections (too expensive) and they appoint "conservators" from Goldman staff to run day-to-day operations. I mean, why bother with selling anything to people when you can just take their taxes at will and keep it as a fee. All people really want are fire and police protection. Hire unemployed dudes at $20/day for fire suppression (they get paid properly by the property owner after the fire is out) and hire gangs to cover the streets, which they already do, and pay them in drugs, which they already know how to push.
Hey maybe I should patent that as a business model.
Voluntary servitude is not illegal or against the law.
Just need to keep your ducks lined up.
Stockpile those claim tickets.
The coolest part is that Goldjew Sachs can BORROW from their cousins at the Fed and acquire all the cash to get all the claim tickets for 0%. If the shit defaults, their cousins make them whole with taxpayer or printed cash.
It's win/win for the financiers. Only once you reject their confetti do you deprive the parasites of power.
In the meantime, buy up all the producing assets like the parking meters, roads, water plants, etc....Argentinafy that shit, and do it with 0% loans from your cousins. Then pretend like you're actually risking your own money.
Here in the Bay Area, they just turned some of the freeway carpool lanes into "pay to play" lanes. Cha-CHING! and it's Ferraris gone wild.
Talking about toll roads too. We don't have toll roads around here but we have lots of roads already built but not taking in any money at all, WTF is that about, make the fookerz pay. CalTrans builds em with tax payer-funded bonds, politicians give them away to corporations for the bribes, locals get a tiny cut on the revenues. Californians get to pay for the asphalt twice or more times and $3.50 gas as well.
Now that GS is a commercial bank, under fractional reserve banking, it can create all the money it wants (given the capital/reserve requirements). No need to even borrow from the Fed, per se.
So it was this piece of evidence of the ongoing recovery that made stocks go green. I was starting to get worried that the european sovereign debt crisis cannot do the trick.
But the most important question, of course,.....will this action have any negative impact on the Steelers, screw the Eagles.
It has spured Jamie Moyer's retirement that's a certainity
Man, the cubs really blew it not keeping moyer & maddux...
smart move by cravath
The last survivors of this Debt Default War will be lawers and roaches
My clients the roaches have approached me to demand that you cease and desist such libel by association. The class action complaint will be served shortly.
I am curious what this means, no more garbage collections? Police stations boarded up? Citizens do their own law enforcement? Sewage systems stay working? When was the last time a city/county seat went Chapter 9?
It means bond holders get nuked up the ass. And vendors get IOUs. But then yes, slowly their world comes unwired. I suppose the idea is to get it wired back up again before anyone notices, but that's just a plan. We're off the edge of the map now. Anything might happen.
"It means bond holders get nuked up the ass." When people relize gov. bonds are not 100% safe it's the end of the line
it means "RIDE 'EM COWBOY! boys and girls." What did Jim Morrison say? "All I want is to get my kicks before the whole shit house up in flames!"!!!! Now excuse me while I go back to my brie and brisquit.
A few months back I was at a conference where one of the law partners handling the Vellejo,CA bankrupcy gave a talk. With all the uncharted legal territory involved, there is plenty of opportunity for the unions to sue -- which they do because the whole point of the bankrupcy is to stuff the benefit committments. Law firms make a fortune.
There is a huge fight in San Jose (across the Bay from Vallejo) about fire and police pensions, more specifically how they are arbitrated. At this rate SJ will be bk and have the best police pensions in the civilized world.
WTF!?!?!?
Well yeah. Though it's the loooong way across. And there are salt marches. And mud. North bay, south bay. All going broke.
The elected officials have totally rolled over for the unions for many years -- tomorrow's problem. And the public has been grossly negligent to let them get away with it.
Everyone was rolling in cash and stocks. The pensions and wages to blue collar public safety folk was a sympathy vote.
Now the police are the only ones cannot be outsourced to India. The rest of us are holding down two jobs to make the house payment.
End of the line. Nobody can afford them now. Give it another year and they'll be getting IOUs just like the service vendors.
Yep, it's gonna get ugly. Unless they get their pensions in Benniebux and health bennies from a 3rd world physicians assistant.
Wherever you see a police or firefighter political endorsement there's bound to be an unfunded pension liability. It's kind of like following a Hummer/Escalade - they'll lead you straight to a soon-to-be REO.
Craven Swine and More...need some good (?) press after being called out for Diversity attrition...just an interesting tidbit.
Few obvious trends emerged from the data. In New York, prestigious firms had very different results with minority attrition. Weil, Gotshal & Manges and Cleary Gottlieb Steen & Hamilton had relatively low minority attrition compared to whites, while Cravath, Swaine & Moore and Paul, Weiss, Rifkind, Wharton & Garrison had higher minority attrition than white attrition.
http://www.law.com/jsp/tx/PubArticleTX.jsp?id=1202474629238&slreturn=1&hbxlogin=1
If you think "Dancing With The Stars" has good ratings how would you like to be the executive producer of a show called: "Cavalcade Of Defaults" ???
Each week we will examine imbecilic budget projections by "elected" officials and at the end of the show "the celebrity panel " (ratings ya know) decide if the official gets beheaded or just thrown into the quarries of eastern PA.
Naw, the "losers" just get sent up to the big leagues in DC.
Were they can join the other losers and form a loser tribe. They will breed and we will end up with Idiocracy!
No I wouldn't but I would like to prodcuce "the Escalade of Defaults." "Ride in cool...keep it mean" would be the sub title. Mike Tyson be pullin' security...i'd have da honey's in tow. Ain't no one gonna mess with dis bad ass. I'd be blinged out with parparazzi (sp?) flashin' cube. I'd give my two cent. Then "my fitty." As in "fitty cent." I'd finish my speach with "budget this, beach." We cool?
Hopefully the city go get moving on the bankruptcy soon. They are having a hard time meeting payroll. The former mayor, Stephen R. Reid was interviewed by Governing magazine recently & he says he doesn't understand how all this happened.
http://www.pennlive.com/midstate/index.ssf/2010/11/former_harrisburg_mayor_tells.html
He was an active participant in the downfall of the city. His comments are rich. Everyone is screaming for investigations into this mess.
We need a tsunami of William Blacks and Harry Markopolos's to clean up the piles that abandoned morally sound principles while becoming parasites of the worst kind. The kind that bleed their host's to the point of death in turn kiling themselves, because this is their sick mindset. Many would have to die and be born again before they would change. So they have to be punnished. When the the people are in enough pain the people will react.
California may be an exception, those dumb shits keep on re-electing the same perverted parasites that are annihilating their State.
I don't know a State in the union that can kick it's own ass as thoroughly and completely as California.
Interesting because Cravath, while clearly an elite firm, has not historically had all that much of a bankruptcy practice and especially not much of a debtor-side practice.
That's gonna be a lot of pro bono hours. I suspect a lot of real estate lawyers with time on their hands will be getting retooled.
I think this will be one of the first high profile failed MUNI of many to come. LA you still there??
Once the first ones tumble there is less shame in the rest following suit if they can ditch debt.
how does a municipality "ditch debt"? don't they after "ditching it" suddenly "need to go in debt again"? i mean "it's not like the taxpayer is being bailed out."
.
"...and if Goldman is actively buying up the muni bonds in advance of a debt-to-equity, in which it will be the first bank to legally own the serfs making up the Harrisburg fiefdom."
That WAS the plan wasn't it? Have the serf's mortage their future, Have it all default on to the Gov(ie taxpayer ie serf), then have it do a price collapse, then go in with the money you extorted via TARP etc, and buy it up 10cents on the dollar and be the "Legal" landlord to it all Then Collect the rent.
Oh, our previous lackies, I mean the previous admin passed the Bankruptcy act in 2005 right on OUR schedule, just in time to make sure they will be debt serfs for life, Especially the young and easy financial "Virgins" like college student loans which have NO recource till you die.
Hooked, put them the stringer.
That WASN'T the plan?
Interesting post. I had thought along those same lines. Why own land when you can own people?Not sure we are not at least partially correct.
Have you ever read a short story, Author unknown and probably 75 years old. "The Most Dangerous Game". By all means do if not. Not computer games; the other game!! ? Milestones
Choosing to file for bankruptcy can be a tough decision. There are many things to consider when deciding if filing for bankruptcy is right for you. What type of bankruptcy should I file? How bad will it be for me long-term? Have I tried everything else? What can I expect? The best thing you can do is arm yourself with knowledge.
http://www.bankruptcydistrictcourt.com/