Bingham, Simpson Thacher, Ballard Spahr: Business of Law

Bingham McCutchen LLP represented Tempur-Pedic International Inc. (TPX), which agreed to buy Sealy Corp. (ZZ) for about $229 million, combining two mattress companies once controlled by private-equity firms.

Simpson Thacher & Bartlett LLP is representing Sealy. Blank Rome LLP advised an independent committee of Sealy’s board.

Tempur-Pedic, a pioneer of memory-foam mattresses based in Lexington, Kentucky, will assume or repay all of Sealy’s outstanding and convertible debt, for a total deal value of $1.3 billion, according to a statement yesterday. The offer of $2.20 a share is 2.8 percent more than Sealy’s closing price Sept. 26.

The Bingham team is led by corporate partner John Utzschneider and includes partners Bill Berkowitz, Brandon Bigelow, Scott Bluni, Benjamin Burkhart, Jim Black, Anthony Carbone, Natascha George, Russ Isaia, Amy Kyle, Christina Melendi, Amy Mugherini, Lou Rodriques, Carl Valenstein and Mike Wigmore.

Mergers and acquisitions partner Sean Rodgers is leading the Simpson Thacher team. Additional partners include James Cross, credit; Joe Kaufman, capital markets, Andrea Wahlquist, executive compensation and employee benefits; Nancy Mehlman, tax; and Joe Tringali, antitrust.

From Blank Rome, Barry Genkin and Alan Lieblich advised the independent committee of Sealy’s board.

Tempur-Pedic, which a decade ago was owned by TA Associates Inc., is gaining brands including Sealy Posturepedic and Stearns & Foster from Sealy, a mattress maker that dates back to 1881 and is 44 percent-owned by New York-based private-equity firm KKR & Co. The transaction, expected to be completed in the first half of 2013, will create cost savings of more than $40 million by the third year, the companies said.

Tempur-Pedic specializes in non-spring mattresses, making its products with a pressure-absorbing foam, drawing on technology first used by NASA to support astronauts in spacecraft.

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M&A Slumps to Lowest Level Since ’09 as Economy Concerns Persist

Global mergers and acquisitions slumped this quarter to a level not seen since the aftermath of the financial crisis amid increasing concern that the economic recovery is deteriorating.

Companies have announced $446 billion of takeovers since June 30, the smallest amount since the third quarter of 2009, according to data compiled by Bloomberg. Chinese state-run oil company Cnooc Ltd.’s proposed purchase of Nexen Inc. was the only transaction to top $10 billion in the period, the data show. Acquisitions are now on pace to drop 15 percent in 2012 to $2 trillion, the lowest in three years.

Cross-border takeovers have accounted for about half of all announced deals this year, a trend that may continue with European Aeronautic, Defence & Space Co. in talks to combine with BAE Systems Plc. Still, while chief executive officers worldwide are sitting on at least $3.4 trillion in cash, many remain reluctant to pursue deals as Europe’s sovereign-debt crisis drags on and signs grow that China’s economy is slowing.

“Executives have the cash, but they don’t have the conviction,” said Andrew Bednar, head of advisory at Perella Weinberg Partners LP, the New York-based investment bank. “I don’t see any miraculous change in the M&A markets for the foreseeable future.”

This quarter’s slowdown has been most pronounced in Europe, where takeovers accounted for about $92 billion, or 21 percent, of global activity, the continent’s lowest share since 2010. The Americas accounted for $248 billion of transactions, and there were $104.5 billion in the Asia-Pacific region.

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News

Blocking Identity Theft Is U.S. Goal Ahead of Tax Filing

The U.S. Justice Department and the Internal Revenue Service are working to head off identity theft aimed at stealing people’s tax refunds when the filing season begins in January, the government’s top tax prosecutor, Kathryn Keneally, said.

The Justice Department will draw information from local prosecutions to identify patterns in the cases and help the IRS create computerized filters to block potentially fraudulent refunds. They peak each year in the first few weeks of the filing season as criminals try to get refunds under legitimate taxpayers’ names before those people file their own returns.

“The schemes can be extraordinarily simple, and they vary,” Keneally, assistant attorney general for the Tax Division, told reporters yesterday in Washington.

In a typical case, criminals steal or illegally purchase taxpayers’ identifying information from hospitals, medical offices, prisons and other places that have the data. They then file false tax returns, claim a refund and have the money deposited on a prepaid debit card.

Keneally, formerly a partner at Fulbright & Jaworski LLP, also said yesterday that the assignment of Tax Division attorneys to federal prosecutors’ offices around the country is ending as scheduled Oct. 1. Bloomberg News reported March 27 that 25 of the 95 prosecutors in the division had been given six-month assignments around the country.

“We are looking forward to welcoming back” the lawyers, who mostly worked on tax cases while they were working in other offices, she said. She said fewer than 10 accepted offers to remain outside Washington.

Litigation

Adoboli Co-Worker on UBS ETF Desk Says Deserved to Be Fired

John Hughes, who worked with Kweku Adoboli on the UBS AG (UBSN) ETF desk and didn’t alert management to a secret account Adoboli had where he hid profits to cover future losses, testified his firing was fair.

“I don’t see myself as a casualty,” Hughes said at his former co-worker’s London fraud trial yesterday. “I think I fully deserved to be dismissed.”

Hughes testified earlier this week that Adoboli told him in January 2011 he had a secret account he called his umbrella, which Hughes believed was profits from unbooked trades Adoboli later used to cover losses. Prosecutors say he called it his umbrella because it would protect him “on a rainy day.”

Adoboli’s lawyer, Charles Sherrard, of Furnival Chambers, said yesterday that Hughes had made his own off-book trades, knew of the umbrella account and “at times controlled it.” Adoboli’s actions were “learned behavior,” Sherrard said. Hughes was fired for gross misconduct after Adoboli was arrested in September last year.

Prosecutors have charged Adoboli with fraud and false accounting tied to unauthorized trades on which UBS lost $2.3 billion. The former trader admitted hours before his arrest that he had risked $5 billion on Standard & Poor’s 500 futures and a further $3.75 billion in the German futures market, a former manager testified. Adoboli has pleaded not guilty.

Hughes, who worked with Adoboli to manage a trading book as large as $15 billion, threw his co-worker “to the lions” when he was arrested, Sherrard said. There were at least four other accounts within UBS similar to Adoboli’s umbrella, the lawyer said. Hughes denied knowing about any besides Adoboli’s.

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Freddie Mac Wins Dismissal of Securities-Fraud Lawsuit

Freddie Mac (FMCC) won’t have to face a lawsuit filed by investors accusing it of misrepresenting the state of its finances in 2007 and 2008, a federal judge ruled.

“We are gratified that the court recognized ‘the bevy of truthful disclosures that Freddie Mac made,’” Bingham McCutchen LLP’s Jordan Hershman, who served as lead counsel for Freddie Mac, said in an e-mail.

The investors failed to supply enough evidence that the McLean, Virginia-based mortgage-finance company and some of its senior managers intended to defraud them, U.S. District Judge John F. Keenan said in a ruling filed Sept. 26 in federal court in Manhattan.

The judge rejected contentions by the plaintiffs including the Central States, Southeast and Southwest Areas Pension Fund and the National Elevator Industry Pension Plan that Freddie Mac’s disclosures were misleading. The information Freddie Mac provided was detailed, not opaque, the judge said.

“It defies logic to conclude that executives who are seeking to perpetrate fraudulent information upon the market would make such fulsome disclosures,” Keenan said in his opinion. He dismissed the case with prejudice, meaning the plaintiffs are barred from filing again.

A lawyer for the plaintiffs, Samuel H. Rudman, didn’t immediately return a call seeking comment on the ruling.

The case is Kuriakose v. Federal Home Loan Mortgage Corp., 08-cv-7281, U.S. District Court, Southern District of New York (Manhattan).

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Moves

HHS Official Joins King & Spalding’s Health-Care Practice

Mark D. Polston joined King & Spalding LLP as a partner in the Washington health-care practice. Polston joins the firm from the U.S. Department of Health and Human Services, where for the past seven years he was the deputy associate general counsel for litigation in the office of general counsel, CMS division.

Polston has more than 20 years of experience in federal litigation, including Medicare, Medicaid and Affordable Care Act regulatory policies, as well as health-care fraud litigation, enforcement and investigations.

King & Spalding has 800 lawyers in 17 offices in the U.S., Europe, the Middle East and Asia.

Real Estate Lawyer David Barksdale Returns to Ballard Spahr

David A. Barksdale has returned to Ballard Spahr LLP as a real estate partner in the firm’s Los Angeles office.

He left Ballard Spahr earlier this year to join the real estate finance group at Alston & Bird LLP in Los Angeles, the firm said in a statement.

Barksdale focuses his practice on real estate finance, investment and development, with an emphasis on loan originations, strategic investments and distressed real estate transactions. He advises lenders, investors, special servicers, and borrowers on complex real estate debt and equity transactions, the restructuring of distressed real estate projects, and enforcement matters, the firm said.

He brings with him a counsel and associate, both members of the real estate department.

Ballard Spahr LLP has more than 500 lawyers in 13 offices in the U.S.

Neal, Gerber & Eisenberg Hires Litigation Partner

Neal, Gerber & Eisenberg LLP hired Karl R. Barnickol as a partner in its 50-lawyer litigation group in Chicago.

Barnickol, who was previously at Katten Muchin Rosenman LLP, focuses on the defense of complex mass torts and class actions. He has represented content providers and software developers involved in publishing industry-specific business data suits. He also manages securities and corporate governance litigation, civil and criminal antitrust claims and consumer fraud actions, the firm said.

Neal Gerber has almost 170 attorneys in its Chicago office.

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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