Exclusive: BlackBerry maker hires law firm for restructuring
(Reuters) - BlackBerry maker Research In Motion has hired law firm Milbank, Tweed, Hadley & McCloy LLP to work out a restructuring plan that could include selling assets, seeking joint ventures or licensing patents, people briefed on the matter said.
Context & Ripple Effects
The Milbank hire caps a brutal month for Research In Motion: a Q4 report at the end of March showed sharply declining BlackBerry sales even against all-time-low expectations, and the same week the company lost its CTO and COO in a leadership shakeup. The Wall Street Journal had already framed the situation as an options menu with no good choices, including an outright sale.
What is new here is machinery, not intent: per sources, RIM has retained Milbank, Tweed, Hadley & McCloy to structure a plan spanning asset sales, joint ventures or patent licensing, with a separate report that JPMorgan Chase is near selection as financial adviser. Hiring both legal and banking counsel signals a formal process rather than ad-hoc cost cuts.
First-order effects
- RIM's board now has a structured framework for evaluating break-up scenarios — asset sales, JVs, patent licensing — rather than incremental retrenchment, directly shaping decisions facing shareholders and employees.
- A patent-licensing track would put BlackBerry's portfolio up for revenue extraction, a shift from holding patents defensively amid the ongoing nano-SIM standards fight with Apple.
Second-order effects
- If the rumored JPMorgan appointment is confirmed, RIM runs parallel legal and financial workstreams — the standard prelude to a competitive sale process that would draw interest from larger technology buyers and patent aggregators.
- Competitors watching the process gain leverage: a licensing program or asset disposal by RIM changes pricing and IP dynamics in enterprise mobility while the company fights declining device share.
Third-order effects
- The pattern points to distressed hardware incumbents converting patent portfolios into cash through adviser-run processes, decoupling IP value from device-market fortunes.
- If restructuring becomes the template for former smartphone leaders, expect boards to retain counsel early — turning strategic decline into managed, staged dispositions rather than crisis sales.
The trend: Once-dominant handset makers are shifting from turnaround attempts to adviser-led restructurings that monetize patents and assets separately from the shrinking device business.