Midday Meltdown Report: On Morgan, Milbank and More on Heller Ehrman

[WSJ_law_blog]

The U.S. financial system resembles a patient in intensive care. The body is trying to fight off a disease that is spreading, and as it does so, the body convulses, settles for a time and then convulses again. The illness seems to be overwhelming the self-healing tendencies of markets. The doctors in charge are resorting to ever-more invasive treatment, and are now experimenting with remedies that have never before been applied. — The Wall Street Journal, September 18, 2008

No end yet in sight, shriek today’s headlines. Here’s a mid-day meltdown round-up:



Will a lawyer snatch a larger stake in Morgan Stanley? The biggest of today’s Wall Street Meltdown news is Morgan Stanley’s possible tie-up with Wachovia, or with a number of other banks around the world. Bloomberg reports that Morgan Stanley could sell a larger stake to China Investment Corp, which bought a 9.9 percent stake in Morgan last year. According to this Esquire profile, Gao Xiqing, the general manager of CIC, is a lawyer. As the head of CIC, Gao (Duke Law) runs one of the largest sovereign wealth funds in the world.



Milbank scores counsel role in Lehman bankruptcy: The NYLJ reports that Milbank has been named counsel to the creditors’ committee in the Lehman bankruptcy. Leading the way for the Milbank team will be the firm’s restructuring practice group leader, Dennis F. Dunne. Lehman is being repped by Weil’s Harvey Miller. Milbank and Weil, notes the NYLJ, were similarly paired in the Enron bankruptcy, when Weil acted as debtor’s counsel and Milbank repped the creditors’ committee.



If WaMu collapses, more bad news for Heller Ehrman? As the WSJ reports, Washington Mutual is on the prowl to either raise more capital or potentially sell itself (though as our Deal Journal colleagues tell us, if WaMu wants a buyer it better move fast.) AmLaw takes a look at which firms stand to lose business in the event of a WaMu failure. At the top of the list: Heller Ehrman, a law firm that could be facing its own dissolution. Other firms that could lose out on WaMu business are Edwards Angell, Reed Smith, Simpson Thacher, Goodwin Procter, K&L Gates and Ballard Spahr Andrews & Ingersoll.