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* Ormsby…
Governor Pat Quinn’s Office of Management today announced that it has selected a new law firm to serve as the state bond counsel, dumping its current counsel, Mayer Brown.
The Quinn Administration has selected the law firm Chapman & Cutler.
In a story broken by Capitol Fax’s Rich Miller, Mayer Brown’s former chairman and current partner, Ty Fahner, got embroiled in a controversy last summer over seeming to claim in a speech, which was recorded, that he had encouraged Wall Street ratings agencies to downgrade Illinois’ credit score over the state’s financial problems. […]
Now it seems that Mayer Brown, which won the contract in 2011, has paid the price for Fahner’s claims, which he later attempted to walk back – losing at $1 million in bond fees that come with being the state’s bond counsel.
In addition to Mayer Brown, Chapman & Cutler beat out 12 other firms to snag the contract.
posted by Rich Miller
Monday, Jan 13, 14 @ 10:24 am
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“Welp. Sorry guys, I though no one was paying attention when I sunk our business opportunity,” says Ty Fahner, only worried about the Firm, and not the damage Ty Fahner, himself, did to the state of Illinois.
They should call Bruce Rauner to see what other states and governors are pigeons in the bonding game…
Comment by Oswego Willy Monday, Jan 13, 14 @ 10:29 am
Karma comes around, Ty.
Chapman and Cutler is the universally acknowledged heavy hitter among law firms in the muni business. They’re the experts in the field.
Clout-heavy firms that land muni business often farm out the real work to Chapman and Cutler.
If you really need outside counsel to issue state GO and revenue bonds (and I don’t think you do), they’re the ones to do it.
Comment by wordslinger Monday, Jan 13, 14 @ 10:31 am
bye bye ty. words have consequences.
Comment by langhorne Monday, Jan 13, 14 @ 10:34 am
The state bids out a small construction job and three companies bid, one from Montana, one from Tennessee, one from Chicago.
The Company from Montana tells the state liaison their bid of $900- $400 for labor, $400 for supplies, $100 profit. The TN company tells him the bid is $700- $300 labor, $300 supplies, $100 profit.
The Chicago company bids $2,700 and wins the contract- $1,000 kickback for the state liaison, $1,000 for the company profits, and $700 to hire the TN company to do the work…
Comment by Toure's Latte Monday, Jan 13, 14 @ 10:45 am
Good!
Comment by For Whatever It's Worth Monday, Jan 13, 14 @ 10:56 am
We shouldn’t need these folks either.
These are standard issues, using standard documentation, marketed by those who do this for a living. Their only real costs are clerical, not special legal expertise.
I hope we’re paying them truly minimal fees.
Comment by walker Monday, Jan 13, 14 @ 10:56 am
Why wasn’t Quinn using Chapman & Cutler in the first place?
Comment by Arthur Andersen Monday, Jan 13, 14 @ 11:16 am
Guess Ty’s partner draw might be a wee bit reduced this year.
Comment by wtf Monday, Jan 13, 14 @ 11:38 am
walker, I guess we could say this about almost all outside legal counsel; just clerical, NOT. There is some skin in the game regarding a tax opinion and research on IRS regs. However, the fees are outrageous and unless the State is getting a fixed fee no matter the size of the bond issue, then it is a scam. For certain is the fact that the legal work on a $20 million bond issue is almost identical to the legal work needed on a $200 million issue,but often the fees charged are ten times as much or based on issue size. Issue sized fees are a scam.
Comment by Jim'e' Monday, Jan 13, 14 @ 11:56 am
The folks at Mayer Brown that were actually invovled in the bond work are first rate. And wordslinger is correct, the folks at Chapman and Cutler are first rate as well.
Comment by slow down Monday, Jan 13, 14 @ 1:06 pm
Instead of a rainmaker, Ty is a droughtmaker.
Comment by Anonymous Monday, Jan 13, 14 @ 1:38 pm
gee, does this come under the category of political retaliation? sure looks it. but it obviously can’t be because all the commenters would be outraged if it really was.
Comment by jim Monday, Jan 13, 14 @ 2:25 pm
===does this come under the category of political retaliation?===
No, it comes under the category of breach of fiduciary duty. Fahner bragged about leading the effort to get Illinois bonds downgraded, costing us more money. At the same time, his firm was making money off Illinois borrowing.
You don’t want to reward that sort of behavior Jim. That could get very expensive.
Comment by 47th Ward Monday, Jan 13, 14 @ 3:35 pm
Jim, was Mayer Brown entitled to state contracts for eternity? Especially when they were screwing their client in the markets?
You guys with your entitlement mentalities.
Comment by wordslinger Monday, Jan 13, 14 @ 3:46 pm
It ain’t beanbag.
Comment by paddyrollingstone Monday, Jan 13, 14 @ 4:07 pm