GM, Opel Hire Lawyers to Advise on Reorganization, Insolvency

March 7 (Bloomberg) -- General Motors Corp. and its German Adam Opel GmbH subsidiary hired three law firms to advise on reorganization and insolvency options, a spokesman for GM Europe said.

Baker & McKenzie and Clifford Chance LLP will advise GM Europe. The Heidelberg, Germany-based law firm Wellensiek has been retained by GM’s Opel unit, the spokesman said, confirming a report in Die Welt newspaper. He declined to be identified.

“For Opel, the primary reason is for advice on reorganizing,” the spokesman said in a telephone interview today. The law firms also were selected for their expertise in German and U.S. insolvency rules, he said.

GM’s top executive in Europe, Carl-Peter Forster, held talks with government officials in Berlin yesterday. The carmaker is offering as much as 50 percent of Opel to outside investors in return for 3.3 billion euros ($4.2 billion) in public assistance. One of the participants in the talks, Economy Minister Karl- Theodor zu Guttenberg, said a government decision on aid was weeks away.

“The draft must be improved and clarified,” Chancellor Angela Merkel said today in her weekly Internet address. “We will help if the benefit for all people concerned is greater than the damage.”

Interior Minister Wolfgang Schaeuble, in an interview with Handelsblatt yesterday, said German insolvency laws are a better option than government assistance for Opel.

U.S. Visit

Guttenberg plans to travel to the U.S. from March 15 to March 18 for talks with GM executives on their plans for Opel. He is also scheduled to meet U.S. Treasury Secretary Timothy Geithner.

GM’s Chief Operating Officer Fritz Henderson said on March 3 that Opel and its Luton, England-based Vauxhall brand may be insolvent in the second quarter unless it receives state aid.

Opel’s closure could threaten as many as 300,000 jobs at Suppliers and dealers, as well as the 55,000 employed across Europe by the Ruesselsheim-based automaker.

Germany, where Opel employs 26,000 people, has the most at stake in a rescue. Politicians are keen to prop up the auto industry, which employs one in eight workers in the country, with national elections looming Sept. 27. Aid talks are also under way with the Spanish and U.K. governments.