Morgan Lewis, Baker & McKenzie, Duane Morris: Business of Law

The judge handling the Bernard Madoff brokerage liquidation picked bankruptcy lawyer James L. Garrity Jr., the head of Morgan Lewis & Bockius LLP’s bankruptcy and finance and restructuring practice, to mediate in trustee Irving Picard’s fight with California Attorney General Kamala Harris.

The two parties couldn’t pick a mediator from the register, so he stepped in, said Judge Burton Lifland, who ordered Picard and Harris on July 18 to follow the court’s mediation procedures to try and resolve their dispute over whether California was entitled to sue the estate of money manager Stanley Chais for $270 million.

In January, the trustee sued Harris, alleging her $270 million lawsuit against the former Madoff investor’s estate interfered with the collection of assets needed to help compensate Madoff victims. The combatants portrayed their fight in court filings as a clash between federal bankruptcy law, which describes a trustee’s powers in fraud cases, and state law, governing a state’s top law enforcer.

Garrity, a certified mediator for the U.S. Bankruptcy Court for the Southern District of New York, was a bankruptcy judge for the U.S. District Court for the Southern District of New York from 1991 to 1999. Garrity was a partner at Shearman & Sterling LLP until he joined Morgan Stanley last October. He has also worked an Assistant U.S. Attorney in the Southern District of New York, where he was promoted to chief of the Tax Unit focusing on bankruptcy cases, according to the firm website.

A Morgan Lewis representative didn’t return an e-mail seeking comment.

The Harris case is Picard v. Hall, 12-01001, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The brokerage liquidation case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-ap- 1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Justice Department Watchdog Creates New Whistle-Blower Position

Michael Horowitz, the U.S. Justice Department’s inspector general, announced yesterday the creation of a whistle-blower ombudsperson, a role designed to increase the attention paid to whistle-blowers, as well as providing a new level of protection from retaliation.

Robert Storch, who recently joined the inspector general’s office as a counselor, will serve in the new position.

Storch was previously a federal prosecutor in the U.S. Attorney’s office in Albany, the Wall Street Journal reported.

“Whistle-blowers play a critical role in uncovering waste, fraud, abuse and mismanagement and this new position will enable the OIG to continue its leadership as a strong and independent voice within the Department of Justice on whistle-blower issues,” Horowitz said in a statement.

Horowitz, who was confirmed by the Senate in April, said that in the short time he has been in the role he has seen the benefits of whistle-blowers within the department.

The new position will have oversight over all of the Justice Department whistle-blower complaints and will be responsible for ensuring that the inspector general reviews and responds to each one. The official also will monitor investigations into retaliation claims and serve as the office’s liaison to other agencies and outside advocacy groups.

Firm News

Baker & McKenzie Elects Managing Partner in Northern California

Gary Sprague was elected managing partner of Baker & McKenzie LLP’s San Francisco and Palo Alto offices. Sprague will also take a seat on the firm’s North American Regional Council, representing the firm’s practice in Northern California.

Sprague joined Baker & McKenzie as an associate in 1985, becoming a partner in 1990. He is a 25-year veteran of international tax law and is chairman of the firm’s global tax planning and transactions subpractice group, according to the firm website.

Sprague focuses his practice on international corporate tax planning and advice, tax controversies and international tax policy. He represents principally software, e-commerce and other technology companies.

Sprague has held prior management roles at the firm including with the policy committee, financial committee and knowledge and talent management committee.

Sprague replaces Shane Byrne as office managing partner. Byrne, who also headed the global mergers and acquisitions group until June, is no longer listed on the Baker & McKenzie website. Firm spokesman Kevin Blasko declined to respond to questions about Byrne’s status at the firm.

Moves

Jackson Lewis Adds Trial Attorney in Portsmouth

Jackson Lewis LLP announced that Martha “Marty” Van Oot has joined the firm’s Portsmouth office as partner. Van Oot has more than 30 years of experience as a trial attorney, with an emphasis on complex commercial and employment litigation. She was most recently at the New Hampshire law firm Orr & Reno PA, where she was a shareholder since 2001.

She has trial experience in both state and federal courts, representing clients in complex commercial litigation, legal and other professional malpractice defense, and employment matters. She is also a frequently retained private mediator.

Debra Weiss Ford, managing partner of Jackson Lewis’ Portsmouth office said of Van Oot, “Her extensive trial experience will add tremendously to our team’s breadth and depth, and I look forward to leveraging her skill set and business connections to further expand our footprint in the area.”

Jackson Lewis has more than 700 attorneys practicing in 49 locations nationwide.

King & Wood Hires Mirvac Group GC in Sydney Office

King & Wood Mallesons hired Sonya Harris to join the real estate, construction and environment practice in the firm’s Sydney office.

Harris joins King & Wood Mallesons from Mirvac Group where she was the general counsel and company secretary, managing the provision of all legal advice to the Mirvac Group, the firm said.

Harris led the Mirvac legal team on many of Mirvac’s key transactions, such as the acquisition of the $1.2 billion Westpac Office Trust, the redevelopment of major industrial project Hoxton Park, the acquisition of Harold Park in New South Wales and the redevelopment of the Old Treasury buildings in Perth in Western Australia, the firm said.

Prior to her position at Mirvac, Harris was deputy general counsel at Multiplex (now Brookfield) and worked on Australian projects such as the Macquarie Bank, American Express and KPMG buildings at King Street Wharf, Bishops See in Perth and the City Square (BHP head office) project in Perth, the firm said.

Duane Morris San Diego Office Adds Real Estate Partner

Duane Morris LLP has hired Marianne F. Adriatico to join the firm’s real-estate practice group as a partner in its San Diego, California, office. She joins Duane Morris from HechtSolberg LLP, the firm said.

Adriatico practices in the areas of common interest development, land use, commercial lending and real estate transactions. She has experience representing developers and builders in the structuring of master planned, mixed-use and condominium projects and their regulation by the California Department of Real Estate, the firm said.

Adriatico is the co-chairwoman of the Common Interest Subsection of the Real Property Section of the California State Bar.

Duane Morris has more than 700 attorneys in offices across the U.S. and around the world.

Litigation

Proskauer Represents Caritas in Bankruptcy Approval

Caritas Health Care Inc., formerly the owner of Mary Immaculate Hospital and St. John’s Queens Hospital in Queens, New York, won the signature of the bankruptcy judge on an Aug. 3 confirmation order approving a liquidating Chapter 11 plan. The hospitals filed for Chapter 11 reorganization on Feb. 6, 2009, in Brooklyn.

Proskauer Rose LLP, which has advised Caritas since its inception in 2006, represented Caritas. The Proskauer bankruptcy team advising Caritas was led by New York partner Jeffrey Levitan, with assistance from New York partner Richard Zall.

Approved in March, the explanatory disclosure statement told unsecured creditors they could expect a recovery of 1 percent to 3 percent.

The bankruptcy court approved the sale of both facilities in November 2009. The purchaser, developer Joshua Guttmann, paid $26.6 million.

“Getting to confirmation has been a long and winding road for Caritas,” said Richard Zall, Proskauer partner and chairman of its healthcare department.” But the company has worked diligently for more than three years to resolve its many claims and issues in a way that satisfies its obligations to its different creditor groups.”

Caritas filed under Chapter 11 intending from the outset to close and sell of the facilities.

Created by Wyckoff Heights Medical Center, Caritas purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. The price was $3.5 million cash, $10 million in notes, and the assumption of $26 million in liabilities.

Caritas’ chief restructuring officer said closing the hospitals with bankruptcy court assistance was necessary because the New York State Department of Health and the New York State Dormitory Authority “indicated that they no longer have the ability to continue to subsidize Caritas’ operating losses.”

The petition listed assets of $87.2 million against debt totaling $188.3 million. St. John’s had 227 acute-care beds while Mary Immaculate had 189.

The Caritas case is In re Caritas Health Care Inc., 09- 40901, U.S. Bankruptcy Court, Eastern District of New York (Brooklyn). The St. Vincent case was In re Saint Vincent Catholic Medical Centers of New York, 05-14945, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, at eamon2@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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