Washington — Jimmy Lee, a vice chairman at JPMorgan Chase — who was one of the key investment bankers in the 2009 restructuring of the U.S. auto industry, and oversaw General Motors’ record-setting initial public offering in 2010 — died unexpectedly Wednesday. He was 62.
The $23-billion GM IPO was then the largest in U.S. history. It helped the U.S. Treasury begin its exit from the company after its $49.5 billion bailout by cutting the government’s stake in half. Lee helped sell the GM IPO to investors around the world, touting GM’s strength in China, fortress balance sheet and strengthening economy.
“When we sat down with investors worldwide, they were really excited with respect to China” and GM’s strengths, Lee said in a September 2011 forum.
Lee was involved in many of the major deals on Wall Street over the last four decades.
JP Morgan chairman and CEO Jamie Dimon praised Lee on Wednesday. “As vice chairman of our company and former head of our investment bank, Jimmy made an indelible and invaluable contribution to our company, our people, our clients and our industry over his nearly 40 years of dedicated and selfless service. Jimmy was a master of his craft, but he was so much more — he was an incomparable force of nature,” Dimon said.
GM President Dan Ammann said, “We are shocked and saddened to learn that Jimmy Lee has passed away. Jimmy was a trusted adviser and played an instrumental role in the success of our IPO.”
In a major showdown in 2009, banks led by Jimmy Lee were demanding full repayment of Chrysler’s secured debt or all of the $6.9 billion owed. “And not a penny less,” former auto czar Steve Rattner quoted Lee as saying in a 2009 first-person Fortune article.
Lee also lobbied Rattner at one point to support a tie-up of GM and Chrysler. Reached Wednesday, Rattner said he was devastated. “Jimmy was an exceptional professional and an even better friend,” Rattner said.
The Obama auto task force held firm. It said the debt was only trading at 15 cents on the dollar, because if Chrysler liquidated it would only be worth about $1 billion.
President Barack Obama then sent a message to the banks that he was preparing for a Chrysler bankruptcy filing. Lee then called Rattner and said: “We need to talk”
“The characters who assembled were straight out of central casting. Jimmy, who favors white-collared shirts and suspenders, arrived with an entourage of equally nattily clad colleagues to face our more rumpled team, including (Fiat) CEO Sergio (Marchionne) in his black sweater,” Rattner wrote. “Jimmy made a virtuoso pitch about the importance of treating senior secured lenders properly, but the president had taken away his only real bargaining chip. The lenders knew that they would fare poorly in liquidation. Expecting to haggle, I had decided to put forward the smallest number I could imagine ($1 billion, equal to both the current market value of the loan and the liquidation value of the company).”
Lee was angered that UAW’s health-care trust, which ranked below the secured creditors, was to exchange an $8 billion existing claim for $4.6 billion in new notes and 55 percent of the equity in the reorganized company.
By April 28, the Obama auto task force upped the offer to $2 billion, Rattner wrote, “which we felt was more than fair. Take it or leave it was my message to Jimmy. He took it, successfully bargaining for cash.”