Jim Millstein, the U.S. Treasury Department’s former chief restructuring officer who helped oversee the bailouts of American International Group Inc. and Citigroup Inc., is forming a turnaround advisory firm.
Millstein, who left the government in February after joining in 2009, plans to focus on restructuring and raising a distressed-debt fund. The former Lazard Ltd. banker, who was an aide to Treasury Secretary Timothy F. Geithner, will base Millstein & Co. in Washington. He weighed returning to Treasury to work on restructuring Fannie Mae and Freddie Mac or to take a senior-level job at another firm.
“I concluded at least for the moment that I wanted more control over the business that I would have had in an existing bank,” said Millstein, 56, who hired three employees and said he plans to take on more after bonus season on Wall Street. “I had considered going back to the government over the summer, but the confirmation process is so broken it might have proven to be a road to nowhere, and I was ready to get back to work.”
Millstein, who said he plans to open an office in New York as he also seeks investors for his distressed fund, is starting the company amid upheaval in the restructuring ranks that helped governments and corporations navigate the longest recession since World War II.
Henry Miller, 66, who co-founded advisory Miller Buckfire & Co., and Mo Meghji, who helped start rival Loughlin Meghji & Co., resigned from those companies this year while boutique investment bank Centerview Partners LLP is starting a restructuring practice.
Miller Buckfire executives approached Millstein about joining the firm, people familiar with the matter said in June.
Centerview and Millstein will compete with established restructuring practices at companies such as Blackstone Group LP, Moelis & Co., Perella Weinberg Partners LP and Lazard, the largest independent merger adviser.
Harry Wilson, a former member of the Obama administration’s automotive taskforce that restructured General Motors Corp. and Chrysler LLC, also started a turnaround advisory this year. The firm, based in Scarsdale, New York, is called MAEVA Advisors LLC. Wilson is on the board of auto supplier Visteon Corp.
Millstein, a bankruptcy attorney, joined Lazard in 2000 as a managing director in the restructuring group. Previously, he was a lawyer with Cleary Gottlieb Steen & Hamilton LLP, where he led the restructuring practice. At Lazard, he worked on the restructuring of cable operator Charter Communications Inc. and with the United Auto Workers in negotiations with GM, Ford Motor Co., Chrysler and Delphi Corp.
Millstein said he was interested in returning to work on housing issues for the administration and recently talked with people in the home-lending and construction industries to ask them for ideas on ways to address the mortgage crisis.
“While it is clear Fannie and Freddie need to be fundamentally restructured to end government conservatorship, there are practical limits to the bandwidth available in D.C. for fundamental reform,” Millstein said. He decided that he could be “more productive doing restructuring-related work in the private sector,” he said.
Millstein joined former Lazard bankers Steven Rattner, 59, and Ronald Bloom, 56, in working for President Barack Obama’s administration. Rattner was head of Obama’s auto-industry rescue and Bloom was the president’s top manufacturing adviser after working on the auto bailouts.
AIG, once the world’s largest insurer, was rescued in 2008 in a bailout that swelled to $182.3 billion. The company repaid the remaining $21 billion on its Federal Reserve credit line in January and the Treasury converted its preferred stake into 92 percent of the insurer’s common stock. That holding was cut to 77 percent in a May share sale.
Millstein has a bachelor’s degree from Princeton University, a master’s from the University of California, Berkeley, and a law degree from Columbia University.