City of Detroit
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Materials Prepared for: City of Detroit March 5, 2013 The contents of this document are proprietary and should not be duplicated or shared without express permission from Jones Day. This proposal includes data that shall not be disclosed outside the government and shall not be duplicated, used, or disclosed – in whole or in part – for any purpose other than to evaluate this proposal. If, however, a contract is awarded to this offeror as a result of – or in connection with – the submission of this data, the government shall have the right to duplicate, use, or disclose the data to the extent provided in the resulting contract. This restriction does not limit the government's right to use information contained in this data if it is obtained from another source without restriction. The data subject to this restriction are contained in Tab 10 hereto. Certain sections of this proposal contain trade secret or confidential business or financial information exempt from disclosure under the Michigan Freedom of Information Act ("MI FOIA"), Mich. Comp. Laws § 15.231 et seq., and should be treated as confidential. Materials Prepared for: Tab 1 Executive Summary City of Detroit Tab 2 The Firm – Why Jones Day is the Right Choice for the City of Detroit March 5, 2013 Tab 3 Proposed Staffing – A Seasoned Team Tab 4 Significant Experience in Michigan Tab 5 Significant Experience in Large and Complex Restructurings Tab 6 Significant Municipal Finance, Infrastructure, and Public Sector Experience Tab 7 Significant Labor, Employee Benefits, and Public Pension Experience Tab 8 Significant Experience and Expertise in Contact Information: Other Relevant Areas Corinne Ball Tab 9 Conflicts Review and Waivers Partner Tab 10 Proposed Fee Structure Tel: +1.212.326.7844 [email protected] Tab 11 The Chrysler Example Bruce Bennett Tab 12 The Orange County Chapter 9 Case: Partner A Success Story Tel:+1.213.243.2382 [email protected] Tab 13 Selected Lawyer Profiles Heather Lennox Partner Tel: +1.216.586.7111 – Cleveland Tel: +1.212.326.3837 – New York [email protected] Tab 1 - Executive Summary Jones Day thanks the City of Detroit for the opportunity to demonstrate our credentials to assist in the City's restructuring efforts. We believe that Jones Day is uniquely qualified to provide the broad range of legal services required to complete a successful long-term restructuring of the City. These materials summarize our qualifications, as requested in your letter of February 27, 2013. We would be happy to meet with you, if requested, to have a frank and open discussion of the issues facing the City of Detroit and the possible paths forward. We hope that we will have an opportunity to work with you to help make Detroit a strong, safe, financially-sound, and vibrant 21st century city. ~ ~ ~ A Midwestern Firm with Global Reach. Jones Day is a large global law firm of over 2,400 lawyers in 37 cities on five continents. Despite its global breadth and capabilities that stretch to business and financial centers around the world, Jones Day is deeply rooted in its Midwestern heritage as a Cleveland firm formed in the late 1800s. The Firm continues to have a strong presence in the Midwest and a core of Midwestern clients. The Firm's foundational values are Midwestern, focused on hard work, client service, integrity and ethics, and a commitment to public service. Ties to Michigan. The Firm has strong ties to the State of Michigan and companies in the state. Some of Jones Day's most ground-breaking work has involved helping Michigan companies, including General Motors and Chrysler, address their most important and difficult challenges. In fact, Fortune 500 companies and other large institutions repeatedly turn to Jones Day to address their most important and complex legal challenges. During the past 12 months, Jones Day has advised no fewer than 66 clients based in Michigan, including by serving as primary outside pension and retiree health counsel to General Motors. A total of 116 Jones Day lawyers have one or more degrees from an institution of higher learning in Michigan, and dozens more hail from Michigan. A total of 25 Jones Day lawyers have clerked for judges on the Sixth Circuit Court of Appeals. The One Firm Benefit. Jones Day operates as a true partnership and treats all clients as clients of the Firm rather than a particular lawyer. This allows the Firm to bring to bear the best resources for each client from whatever legal discipline and from whatever location, all focused on serving the client's needs. This is the One Firm benefit. This interdisciplinary, collaborative approach to providing legal services has won Jones Day the highest accolades for legal services and client service time and again. Jones Day works with clients – and other parties – to achieve practical and creative solutions to complex legal problems. Broad, Relevant Experience. Jones Day has relevant experience in all of the major disciplines needed to help the City of Detroit formulate and implement a successful restructuring strategy, including Restructuring/Bankruptcy, Employee Benefits, Labor, Municipal Finance, Public Pensions, Public Projects and Infrastructure, and Litigation. Jones Day has experience and expertise in numerous other areas that could be relevant to the City of Detroit, including: state and federal tax, environmental, internal investigations, government contracts, and open meeting and freedom of information act issues (among others). -1- Top Restructuring Practice with Large-Debtor and Chapter 9 Experience. Jones Day is widely- recognized as having one of the top restructuring practices in the world. In fact, just last month Jones Day was named a "Bankruptcy Group of the Year" by the publication Law 360. Jones Day has represented a variety of parties in the largest restructuring matters in history, but has been noted in particular for its representations of debtors in both in-court and out-of-court restructurings. Among many other chapter 11 matters, Jones Day was lead counsel in the historic Chrysler bankruptcy, and was the architect of the successful strategy employed in that case. See Tab 11. Jones Day also developed and implemented a comprehensive union, pension, and OPEB strategy through a groundbreaking global settlement in the Dana Corporation bankruptcy. See Tab 5. Jones Day lawyers also have significant chapter 9 experience, notably by leading Orange County through an efficient and successful bankruptcy and back to investment grade 18 months later. See Tab 12. In addition, Jones Day serves as derivatives counsel in the Lehman Brothers bankruptcy case, and has pioneered legal strategies to address the restructuring of complex financial instruments. Strong Practices in All Other Key Areas. Jones Day's other key practices are top notch and are well prepared and highly qualified to assist the City of Detroit. For example: . Our labor lawyers are among the country's best and have worked in numerous restructuring and bankruptcy matters, including most recently Hostess Brands. They have negotiated hundreds of union contracts across the country in both the private and public sectors, including in the state of Michigan. Jones Day has negotiated labor contracts for both General Motors and Chrysler. Our lawyers have negotiated concessionary contracts for the Minneapolis Star Tribune in the face of declining circulation. Our Firm also served as the principal outside labor counsel to the Chicago Board of Education in connection with the 2012 teachers strike, achieving a settlement only one day after we filed a motion for a temporary restraining order against the union, seeking to enjoin the strike as illegal under the Illinois Educational Labor Relations Act. Jones Day's lawyers are routinely called upon to address union issues central to a client's success, whether through bargaining or litigation. Jones Day's history of successfully attaining concessionary contracts, and its success in litigation, makes it an exceptional negotiating partner and, if necessary, a formidable adversary across any union negotiating table. Jones Day's benefits practice has been involved in dozens of chapter 11 cases and have been at the forefront of developing solutions to union benefit costs, such as the ground-breaking VEBA trust structure to resolve OPEB liabilities that Jones Day helped develop for General Motors and Goodyear Tire and Rubber, and the pension liability transfer transactions Jones Day pioneered in 2012 for General Motors and Verizon Communications. In addition, Jones Day lawyers are nationally recognized in the practice of benefits litigation, and we are particularly experienced at litigating OPEB liability issues within the courts of the Sixth Circuit. Unlike many other firms, Jones Day also has substantial experience in representing and problem solving for public pensions and health benefits plans. The Firm's benefits lawyers are well prepared to develop and aggressively pursue a strategy to address the City's pension and OPEB underfunding issues. For example, Jones Day recently worked with Los Angeles County, its unions and the Los Angeles County Employees Retirement Association, the administrator of its pension plan and retiree health program, to develop a unique trust fund structure for the County’s retiree health obligations. Jones Day has substantial public finance experience, including in connection with municipal restructurings and chapter 9 cases. Jones Day knows what it takes to obtain financing in the public bond market, how monoline insurance products impact this market and how public debtholders likely -2- will approach restructuring talks. Beyond municipal finance, Jones Day has extensive experience in public projects and infrastructure matters, including privatization transactions. Jones Day is experienced in the divestiture of parking lots, water systems, airports, and other infrastructure assets. In addition, Jones Day has represented public sector clients throughout the country in connection with a wide-array of other legal issues, including appellate issues, employment and wage issues, general litigation, intellectual property, tax, and workers' compensation matters.