PHILADELPHIA, Nov 10 (Reuters Legal) - Harrisburg City Council agreed late Tuesday to retain New York law firm Cravath, Swaine & Moore on a pro-bono basis to advise it on a possible bankruptcy filing.
The city council's final decision was between Cravath, Swaine & Moore of New York and Fox Rothschild of Philadelphia, according to media reports.
"The fact that [Cravath] will be doing the work pro bono ... will save the city millions of dollars," said Councilman Brad Koplinski, who has led the search for a law firm to advise city officials on a potential filing under Chapter 9 of the federal bankruptcy code.
Pennsylvania's capital city faces possible bankruptcy, bond defaults or severe spending cuts because of debt of at least $288 million from a city trash incinerator.
Cravath will also advise the city on its current application for "distressed city" status under which state officials would oversee a financial restructuring.
In a press release Cravath described the representation as "one of its most significant public service commitments in years."
Cravath currently represents New York City Off-Track Betting Corp in the only Chapter 9 bankruptcy case ever filed in New York State. That work is what attracted Harrisburg to the firm, according to partner Paul Zumbro who will lead the representation along with Richard Levin.
"I got the sense that the city council was leaning towards us because of our experience but understandably was concerned about the fee structure. We were mindful of the political issues that might cause and decided it was an appropriate circumstance to make a public service commitment," Zumbro said.
Fox Rothschild partner Michael Viscount, who handled the firm's pitch to the city council, described the selection as a "highly competitive process for the law firms involved, which is evident from the fact that the decision came down to the wire." Fox Rothschild did not offer its services pro bono.
Mayor Linda Thompson, who has opposed a bankruptcy filing, welcomed Cravath's pro bono offer.
"She believes that the city's final decision needs to be made on the best information available, and intends to cooperate fully to provide whatever information the firm requires," Chuck Ardo, a spokesman for Thompson, said in a statement.
(Reporting by Jon Hurdle of Reuters; Additional reporting by Terry Baynes of Reuters Legal)
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