Jones Day

Everyone loses:

• HOSTESS JUDGE APPROVES MOTION TO WIND DOWN COMPANY
  
• HOSTESS WINS APPROVAL TO CLOSE AND BEGIN SELLING ASSETS

Next up: the Twinkie economy.

All you need to read.

At one point last year Bill Ackman, who had created an entirely separate fund to express his exbuerance in retailer Target, and created a standalone fund PSIV to invest in the same name, was down 99% at the point the fund was unwound. Many had hoped the supposed retail genius' bad luck would end there. Alas, no. Another stock in which Pershing Square now owns 37%, is on the verge of filing bankruptcy. And apparently it can't even afford to hire a decent financial restructuring advisor. According to reports, traditionally creditor-side advisor Jefferies has been retained to represent the company, while Jones Day is legal counsel. Look for a bankruptcy filing in the next week and for another wipe out for Mr Ackman.

"The deal was actually structured to give Barclays an immediate and enormous windfall profit. Certain Lehman executives agreed to give Barclays an undisclosed $5 billion discount off the book value of securities transferred to Barclays, and later agreed to give billions more in so-called "additional value" that Barclays demanded, but the Court never approved. This immediate windfall to Barclays (i) was not disclosed to the boards of LBHI and LBI, (ii) was not revealed in the agreement the Court was asked to approve, and (iii) was never disclosed to the Court until now."

Chrysler's little parade in bankruptcy court to make sure a few hundred thousand unionized workers retain their jobs for another year or two is finished. And here is the bill to you, dear taxpayer (or rather the first of many): Jones Day's invoice is in the mail. Everyone take out their wallets and please split the $12,702,190.19 equally. After all, now that we are allbenefiting form having a much leaner, much more competitive Chrysler around, we should all be happy to pay each and every lawyer who made it possible.

Update 1: Chrysler just filed its response to the Indiana appeal. The biggest variable here is the value that Chrysler assumes the first lien lenders would attain in a liquidation which at $800 million, Jones Day claims would be a far worse outcome than the $2 billion the secured lenders are guaranteed under the current plan.

• George Orwell headline of the day: Yen declines as signs of U.S.

In a petition with the bankruptcy court, in which the affected dealers try a last ditch effort to fight the system, this time using an approach claiming their "interests" were affected (in a narrow sense), as defined by 363(f), the dealers and their special council Siller Wilk throw the kitchen sink at Judge Gonzalez in an attempt to derail the Good Chrysler sale. Seton Hall law professor Stephen Lubben did a nice job of dissecting the legal basis (or lack thereof) of their argument.

Barely did the Indiana pension funds submit the objection to the Chrysler asset sale yesterday, before the ever more Peck-esque Judge Gonzalez totally confirmed his brand new nickname "Speedy." In the filing below, S.G. outright denied Indiana's claims for a delay and halt in the process proceedings:

In its retention application to represent the Debtor, aka Chrysler, aka US taxpayers, bankruptcy law firm Jones Day has disclosed not only its fee rates (at or over $900/hour for the top lawyers, compliments of Joe Q. Public), but also a very peculiar phrasing in the request of where in priority its fees should fall in the current bankruptcy. For the first time since once can remember, a law firm has requested a Section 364 superpriority status as a retained entity.

In an event that just as easily may not have occurred, Judge Gonzalez presiding over the boiling hot Chrysler bankruptcy, has sided with an objection of the Chrysler Non-TARP creditors (aka abominable hedge funds). The issue at hand was a request for a delay of the hearing on Section 363 bidding procedures from today until tomorrow at 2:30 pm.

Everything you need to know about the dirty prehistory in the Chrysler bankruptcy, compliments of Jones Day. A must read.

Update 2: Top unsecured creditors include:

• Ohio Module Manufacturing - $70.3 million
• BBDO Detroit -$58.1 million
• Johnson Controls - $50.3 million
• Continental Automotive - $47 million
• Cummins Engine - $43.9 million
• Germersheim Spare Parts - $36.2 million

After the PPIP seemed like a done deal with its legacy loan and legacy security purchasing aspects already virtually set in stone, the FDIC surreptitiously slipped this Request For Comments (RFC) on its website. Two of the proposed questions submitted by the FDIC bear particular attention:

As much as I hate to break it to Larry Kudlow and his unending "Ted-Spread is Down" monolog, the outlook for 2009 as per some people who actually know the business, although granted are heavily axed on the apocalypse bidside, is so bad, we should all just be buying rahmen noodles, crank radios, a