DLA, Bracewell, Wachtell Lipton, SNR: Business of Law

A member of the U.S. House Intelligence Committee joined a colleague in urging law firm DLA Piper LLP’s Washington office to reconsider representing China phone-equipment maker ZTE Corp. (763)

ZTE’s executives, along with Huawei Technologies Co., tried to dispel allegations by U.S. lawmakers that their potential expansions may increase cyberattacks and spying in a hearing yesterday.

In what was described as the first appearance by Chinese executives at a congressional hearing, the executives heard accusations they haven’t cooperated with an investigation or shown they’re independent from a government accused of stealing U.S. intellectual property.

Republican representatives Sue Myrick of North Carolina, a member of the intelligence committee, and Frank Wolf of Virginia in a letter yesterday told DLA Piper they’re disappointed the law firm is advising ZTE “as it attempts to circumvent U.S. government concern and gain a larger share of the U.S. marketplace.”

The letter cited “threats your client may pose to the national security of the United States.”

DLA had no comment, John Merrigan, a Washington-based partner, said in an e-mail.

Huawei and ZTE, both based in Shenzhen, told lawmakers at the hearing the companies aren’t controlled by the Chinese government, which Mike McConnell, a former U.S. director of national intelligence, has called the “the most prolific” state thief of U.S. intellectual property.

The companies haven’t provided full answers and supplied “very few” documents that relate to the committee’s probe, the committee chairman, Representative Mike Rogers, a Michigan Republican, said during the hearing.

Zhu Jinyun, ZTE’s company’s senior vice president for North America and Europe the ZTE executive, told Myrick during the hearing that the company hasn’t sold gear to the Iranian government.

“We conduct normal business operations in Iran, but we are gradually reducing our present operations and we are not starting any new business operations in Iran,” Zhu said.

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Firms From Law to Finance Benefit From $1 Billion TARP Expenses

While Treasury Secretary Timothy F. Geithner lauded the government’s sale of American International Group Inc. (AIG) shares this week, the U.S. bailout program reached another milestone.

Expenses from the Troubled Asset Relief Program have passed $1 billion, with more than 70 percent of that going to “financial agents and legal firms,” according to Treasury Department data released Sept. 10. The total paid to the companies as of Aug. 31 was 37 percent more than it was a year earlier.

Companies that have been paid for TARP work include investment firm Houlihan Lokey, which reached a $4.5 million deal in November to advise the Treasury on managing and selling bank stakes, according to a July report by TARP’s special inspector general. Law firm Cadwalader, Wickersham & Taft LLP agreed in 2009 and 2010 to contracts worth about $25 million, most of it for work related to auto-industry bailouts.

TARP was enacted under the George W. Bush administration amid the 2008 financial crisis and continued under President Barack Obama. The government used funds to rescue banks including Citigroup Inc. (C) and Bank of America Corp., and automakers General Motors Co. (GM) and Chrysler Group LLC.

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Ex-Lawyer Donna Guerin Pleads Guilty in Tax-Shelter Case

Donna Guerin, a former partner in the defunct law firm Jenkens & Gilchrist, pleaded guilty in what the trial judge has called the biggest U.S. tax-fraud prosecution in history.

Guerin was convicted in May 2011 with three other defendants of running a 10-year tax shelter scheme that created more than $1 billion in phony losses. Three of the convictions, including Guerin’s, were overturned in June after U.S. District Judge William Pauley found that a juror in the case lied about her past, including that she was an alcoholic and a suspended attorney.

Guerin pleaded guilty yesterday in Manhattan federal court to one count each of conspiracy and tax evasion. Her plea comes as prosecutors are preparing to retry the defendants whose convictions were overturned based on the misconduct of the juror, Catherine Conrad.

The jury, including Conrad, returned guilty verdicts against Guerin and Paul Daugerdas, another former Jenkens & Gilchrist partner; Denis Field, the former chief executive officer at accounting firm BDO Seidman LLP; and David Parse, who worked for Deutsche Bank AG (DBK) unit Alex. Brown. Craig Brubaker, a second former Alex. Brown accountant, was found not guilty.

Pauley threw out the convictions of Guerin, Daugerdas and Field after finding that Conrad, Juror No. 1 in the trial, had lied repeatedly about her background in an effort to make herself “more marketable” as a juror.

Pauley, who found that Parse’s lawyers failed to reveal information they had about Conrad before the jury delivered its verdict, refused to grant him a new trial. Parse is seeking to overturn his conviction by claiming his lawyers, from the New York firm Brune & Richard LLP, provided him with inadequate legal help.

The trial included 9,200 pages of testimony from 41 witnesses. Lawyers introduced 1,300 pieces of evidence.

The case is U.S. v. Daugerdas, 09-CR-581, U.S. District Court, Southern District of New York (Manhattan).

Wynn Gets First Chance to Grill Okada in Casino Control Fight

Gaming mogul Steve Wynn may gain an edge in his courtroom battle for control of a $10 billion casino empire as business- partner-turned-rival Kazuo Okada is forced to answer questions from Wynn Resorts Ltd. (WYNN)’s lawyers, Bloomberg News’ Edvard Pettersson reports.

The Japanese pachinko magnate’s court-ordered deposition, set for Sept. 18 in Las Vegas, will mark the first time Okada, who resides in Hong Kong and resisted coming to the U.S., will face Wynn Resorts’ attorneys after the casino operator’s board forcibly redeemed his 20 percent stake in the company at an $800 million discount.

“This is a significant tactical victory for the Wynn side,” said Matthew Close, a lawyer with O’Melveny & Myers LLP in Los Angeles who isn’t involved in the case. “Depositions can be case-defining.”

The questioning of 69-year-old Okada under oath may show Wynn, 70, what he’s up against as he wages multiple legal battles to keep control of the company he started with Okada 10 years ago that operates casinos in Las Vegas and in the Chinese special administrative region of Macau.

Wynn, the company’s chairman and chief executive officer, also faces challenges from his ex-wife, who wants to sell her 10 percent stake in the company, and scrutiny by the U.S. Securities and Exchange Commission of an HK$1 billion ($129 million) donation last year to the University of Macau.

Wynn’s lawyers have said Okada is trying to dig up evidence for a so-called unclean hands defense that Wynn improperly courted officials in Macau, just as he accuses Okada of having done in the Philippines.

Questioning Okada will reveal “what besides his own personal venom for Mr. Wynn and his personal agenda in his lawsuit against Wynn Resorts has motivated his request,” Wynn Resorts said in a June 18 court filing.

The deposition, which will take place behind closed doors, can be used as evidence in court, where Wynn and Okada are also squaring off in a separate lawsuit before the same judge over the alleged breach of fiduciary duty by Okada that prompted Wynn Resorts’ board to redeem his 24.5 million shares.

Michael Weaver, a spokesman for Wynn Resorts, declined to comment on the deposition. Steve Getzug, a spokesman for Okada, also declined to comment.

Okada’s petition for access to Wynn’s books and records is Okada v. Wynn Resorts, A-12-654522-B, District Court, Clark County, Nevada (Las Vegas).

Wynn’s breach of fiduciary duty lawsuit is Wynn Resorts v. Okada, A-12-656710-B, District Court, Clark County, Nevada (Las Vegas).

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Deals

Bracewell, Wachtell Help Chesapeake Sell $6.9 Billion in Assets

Chesapeake Energy Corp. (CHK) agreed to sell oil and natural-gas assets for $6.9 billion in a series of transactions that will narrow a cash-flow shortfall threatening to crimp the company’s drilling and production goals.

Royal Dutch Shell Plc (RDSA), Chevron Corp. (CVX) and EnerVest Ltd. will buy oil and gas fields in the Permian Basin of Texas and New Mexico for $3.3 billion, Chesapeake said in a statement Sept. 12. Closely held Global Infrastructure Partners will acquire most of Chesapeake’s pipeline and processing assets for $2.7 billion.

Bracewell & Giuliani LLP, through partners G. Alan Rafte and Michael S. Telle, handled the transaction with GIP covering midstream assets. The firm worked with Commercial Law Group PC, according to an e-mail. Commercial Law Group didn’t return phone calls seeking confirmation. Bracewell also represented Shell, with partner W. James McAnelly III leading the deal team.

Wachtell, Lipton, Rosen & Katz, with a team led by corporate partner David A. Katz, is serving as legal adviser to Chesapeake’s board.

The Permian Basin holdings were the most valuable of several assets Chesapeake Chief Executive Officer Aubrey McClendon put up for sale this year to raise cash to avoid a credit-rating downgrade and maintain debt covenants amid slumping gas prices. The Permian sales announced Sept. 12 fell short of a $5 billion target set by McClendon in a March interview, because some acreage in the basin failed to attract bidders.

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Fees

Kodak Professionals Agree to Cut Initial Fee Request by 1.7%

Professionals working for bankrupt Eastman Kodak Co. (EKDKQ) and its official creditors’ committee agreed to cut by 1.7 percent an initial request for $38.3 million to cover fees and expenses through the end of April.

Richard Stern, the court-appointed fee examiner, negotiated with Kodak’s lawyers and advisers and won an agreement to reduce by $651,000 the amount sought for work since the start of the Chapter 11 case in January, according to a report filed Sept. 12 in U.S. Bankruptcy Court in Manhattan.

Sullivan & Cromwell LLC, Kodak’s primary law firm, cut its $10.9 million in fees by $300,000, on top of a voluntary $600,000 reduction taken earlier. Milbank Tweed Hadley & McCloy LLP, representing the creditors’ committee, trimmed its $4.54 million in fees by $125,000.

Stern said in his report that Kodak spent only $31 million on professional expenses in the entire year before filing Chapter 11, including $9 million for accounting and consulting fees. U.S. Bankruptcy Judge Allan Gropper is scheduled to hold a Sept. 19 hearing to consider approval of the fee requests.

Kodak, based in Rochester, New York, listed assets of $5.1 billion and debt of $6.75 billion in Chapter 11 papers.

The case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Firm News

New Criminal Defense and Civil Rights Firm Opens in New York

Barket, Marion, Epstein & Kearon LLP, a new criminal defense and civil rights boutique law firm, has opened with offices in Manhattan and Garden City, Long Island.

The firm represents clients in criminal defense, civil rights claims and personal-injury matters in federal and state courts throughout the New York City area at the trial, appellate and post-judgment stage of all proceedings.

The firm currently represents 32 passengers in a lawsuit against JetBlue Airways Corp. over a pilot’s erratic behavior, as well as a victim of the New York Police Department shooting in front of the Empire State Building.

The name partners include Bruce Barket, a past president of the Nassau Criminal Courts Bar Association, who will be managing partner. He will also oversee the firm’s trial practice group and the post judgment wrongful conviction group.

Amy Marion will lead the firm’s civil rights group. Steven Epstein will supervise the firm’s vehicular crimes group, while Kevin Kearon, a past president of the Nassau Criminal Courts Bar Association, will lead the criminal trial group.

Elaine Jackson Stack, a retired New York Supreme Court justice, and Daniel Arshack of Arshack, Hajek & Lehrman PLLC, a past president of the New York Association of Criminal Defense Lawyers, have joined Barket Marion as counsel.

Bingham to Open Global Services Center in Lexington, Kentucky

Bingham McCutchen LLP plans to open a shared-services center in Lexington, Kentucky, next year to consolidate its administrative operations.

The center in the University of Kentucky’s Coldstream Research Campus business park will house administrative support staff from the finance and accounting, human-resources, information-technology, knowledge-services, marketing, operations and risk-management departments.

About 250 firm employees will be employed at the center, with some people relocating from existing Bingham offices and some expected to be hired in the Lexington area.

Bingham has committed $22.5 million to establishing the center. That amount includes building improvements, startup costs and rent for 10 years, the firm said.

“After 15 years of significant growth by combinations, we are consolidating our operations model to more efficiently support our lawyers around the world and, in turn, provide better service to our national and global client base,” Chairman Jay Zimmerman said in a statement.

Bingham has about 1,000 lawyers and more than 900 staff in 14 major offices in the U.S., Europe and Asia.

Moves

American Express Chief Privacy Officer Joins SNR Denton

American Express Co. (AXP)’s chief privacy officer, Andy Roth, joined SNR Denton LLP as a partner in the New York office. He will advise clients on issues including crisis management and best practices in sustainable data governance.

At American Express, Roth oversaw the privacy matters of more than 100 million customers and 60,000 employees worldwide and worked with regulators in the U.S., Europe and Asia.

“Andy’s legal knowledge, technology savvy and operational experience are a great addition, further enabling our global team in counseling clients not just on compliance with privacy and security laws, but on how to leverage data to drive transformation,” Mike McNamara, SNR Denton’s U.S. managing partner, said in a statement.

SNR Denton has more than 60 locations worldwide, through offices, associate firms and alliances across the U.S., the U.K., Europe, the Middle East, Russia and the Commonwealth of Independent States, Asia and Africa.

Milbank Adds Latin America Finance Attorney Carlos Albarracín

Milbank, Tweed, Hadley & McCloy LLP said that Carlos T. Albarracín, a corporate and capital markets attorney with a career-long focus on Latin America, joined the firm as a partner in the Global Securities Group. He was previously a partner in the New York office of Chadbourne & Parke LLP, the firm said.

Albarracín advises domestic and international clients on transactional matters across Latin America. He has handled large debt and equity offerings and mergers and acquisitions, as well as bank and project financings and financial restructurings, the firm said.

In addition to continuing his focus on Colombia, Peru, Chile and Argentina, Albarracín will devote substantial time to supporting Milbank’s Mexico practice, the firm said.

Milbank is based in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, Sao Paulo, Singapore, Tokyo and Washington.

K&L Gates Adds Dubai Finance Partner From Simmons & Simmons

The Dubai office of K&L Gates LLP hired Natalie Boyd as a partner in its finance practice. She joined from Simmons & Simmons LLP, the firm said.

Boyd advises on a variety of structured credit and debt capital markets products, as well as bank lending, regulatory, derivatives and Islamic finance matters.

K&L Gates has almost 2,000 lawyers practicing in more than 40 offices in North America, Europe, Asia, South America and the Middle East.

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

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

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