Motor City Shuffle: Pepper Hamilton In, Clark Hill Out. By: Brian Baxter
With a battle looming between Detroit and public pension funds representing retired city workers, the city on Monday added another law firm, Pepper Hamilton, to the roster of outside counsel working on its Chapter 9 filing. Meanwhile, a second firm, Clark Hill, confirmed it was ending its federal lobbying contract with the embattled city.
Deborah Kovsky-Apap, a corporate restructuring and bankruptcy partner with Pepper Hamilton in the Detroit suburb of Southfield, notified the court and U.S. Bankruptcy Judge Steven Rhodes of her role as counsel of record to the Motor City.
Reached by phone late Monday, Kovsky-Apap—who joined Pepper Hamilton in 2005 from Wilmer Cutler Pickering Hale and Dorr, where she had been an associate—declined a request for comment about the firm’s role in the record-setting Chapter 9 case. Pepper Hamilton is serving as special litigation counsel to Detroit, according to a Friday report by our former colleague, Standard & Poor’s bankruptcy reporter John Bringardner.
One matter in which Kovsky-Apap is already involved, along with Pepper Hamilton corporate restructuring cochair Robert Hertzberg, is the city’s suit against a unit of Bermuda-based Syncora Holdings over the the bond insurer’s effort to capture revenues from the ailing city’s three casinos. That suit, which was initially filed in state court, was removed to federal court in Detroit on July 11.
Pepper Hamilton has its share of experience when it comes to Detroit legal imbroglios, having once incurred at least a five-figure legal tab several years ago by representing disgraced ex-mayor and attorney Kwame Kilpatrick, according to our previous reports.
In signing on for the city, Pepper Hamilton joins Jones Day and Miller, Canfield, Paddock and Stone as counsel in its Chapter 9 case, both of which began advising the city on its restructuring efforts earlier this year. Emails disclosed Monday by a union activist through a court order appeared to show that Detroit’s bankruptcy had been planned for some time, despite the denials of city officials.
For its part, Pepper Hamilton has municipal bankruptcy experience, having once served as restructuring counsel to Pennsylvania’s now-insolvent capital Harrisburg, before severing that relationship in 2010 due to a client conflict.
Meanwhile, Detroit-based Clark Hill confirmed to The Am Law Daily over the weekend that it would cease handling federal lobbying work for Detroit due to a conflict related to its representation of two pension funds suing the city over what the plaintiffs claim is an attempt to slash retiree benefits by filing for bankruptcy that is barred by the state constitution.
The Am Law Daily reported Friday on Clark Hill’s dual representations, with Bill Nowling, a spokesman for former Jones Day partner and current Detroit emergency manager Kevyn Orr, calling the firm’s two separate roles “a huge conflict.”
In a U.S. Senate filing made Monday, Clark Hill sought $30,000 for its second-quarter lobbying efforts on behalf of the city, bringing its total tab to $150,000 since inking a $330,000 contract last year to work on Detroit’s behalf after K&L Gates decided to drop the city as a lobbying client after being unable to collect on outstanding lobbying bills.
Monday’s filing by Clark Hill does not include an official termination of the lobbying contract. A hearing in Detroit’s proposed bankruptcy case has been scheduled for Tuesday.
Additional reporting by Sara Randazzo.
Baxter, Brian. “Motor City Shuffle: Pepper Hamilton In, Clark Hill Out.” The American Lawyer. The AM Law Daily, 22 July 2013. Web. 24 July 2013.