Dewey, Skadden, Bingham, Cooley, Foley: Business of Law
Stock Chart for Oshkosh Corp (OSK)
An effort by the official partners’ committee of Dewey & LeBoeuf LLP to compel appointment of an examiner was “for an improper purpose as a litigation tactic,” a bankruptcy judge said Oct. 9 in approving a $71.5 million settlement with former partners. Two days later, the firm filed papers asking the judge to disband the official partners’ committee.
In papers filed yesterday, Dewey said the original decision by the U.S. Trustee to appoint an official committee representing former partners “was a misstep that needs to be corrected.” The firm characterized the committee as not having “contributed in a productive way to this bankruptcy case.”
Lawyers for the partners’ committee have generated $780,000 in fees “without any corresponding benefit to the estate,” Dewey said in its filing.
“The motion is a cold-hearted and cynical attempt to disenfranchise the most vulnerable victims of Dewey’s bankruptcy,” David M. Friedman, counsel for the partners’ committee, said in an e-mail. Friedman, a partner at Kasowitz Benson Torres & Friedman LLP, predicted the motion to disband “will fail.”
In his opinion this week approving the settlement between the firm and more than 400 partners, U.S. Bankruptcy Judge Martin Glenn said the official partners committee did “whatever it could to scuttle any proposed” settlement.
The firm takes the position that former partners have no economic interest in the case. They are “out of the money,” according to court papers, because any claim by a partner can only be paid after unsecured creditors are fully paid. At this point, the official unsecured creditors’ committee adequately represents the interests of partners, Dewey said.
Glenn will hold a hearing on Nov. 1 to decide if the committee should be disbanded.
In turning down the official committee’s motion for an examiner, Glenn said the committee hadn’t shown there to be the required $5 million in undisputed unsecured claims. In yesterday’s motion to disband the committee, Dewey said it estimates there are “at least $500 million in allowed secured and general unsecured claims.”
Dewey has two official committees, one for unsecured creditors and the other for former partners. The firm once had 1,300 lawyers before liquidation began under Chapter 11 in May.
There was secured debt of about $225 million and accounts receivable of $217.4 million at the outset of bankruptcy, the firm said. The petition listed assets of $193 million and liabilities of $245.4 million as of April 30.
Skadden, Foley Advise Oshkosh on $3 Billion Icahn Offer
Carl Icahn, the billionaire activist investor, offered to buy Oshkosh Corp. (OSK) for about $3 billion, saying management of the military vehicles supplier has failed to deliver on pledges to improve profitability.
Oshkosh said it will consult with financial and legal advisers and notify shareholders of its position within 10 business days of receiving an offer.
Skadden, Arps, Slate, Meagher & Flom LLP and Foley & Lardner LLP are serving as legal advisers. Skadden mergers and acquisitions partners Gary Cullen and Richard Grossman lead the team. From Foley, transactional and securities partners Patrick G. Quick and John K. Wilson are advising Oshkosh.
Icahn is being advised by in-house attorneys at his company, the American Lawyer reported.
The $32.50-a-share offer is 21 percent more than the Oshkosh, Wisconsin-based company’s Oct. 10 closing price, Icahn said yesterday in a statement. Icahn said he intends to nominate directors for election to Oshkosh’s board at the company’s annual meeting, with his offer conditional on those directors being elected.
Oshkosh, which supplies blast-resistant trucks to the U.S. Army and Marine Corps, posted a 66 percent drop in net income last year as its sales shrank with the end of the war in Iraq and the U.S.’s plans to withdraw troops from Afghanistan. Icahn, Oshkosh’s largest investor with a 9.5 percent stake, has criticized the firm’s executives for the poor performance.
“Management has taken a passive attitude to the future of this company, willing to sit back and watch what happens to the defense, housing and construction industries,” Icahn said in the statement. “Oshkosh needs proactive shareholders to bring a proactive management team together to weather a volatile economy, a shrinking defense industry and a budget constrained municipal environment.”
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Baker & McKenzie Elects New Management from Around the World
Baker & McKenzie said Sydney partner Bruce Hambrett and Toronto partner Jim Holloway were elected to serve on its executive committee.
Hambrett and Holloway succeed Jeremy Pitts in Tokyo and Alan Harvey in Dallas, whose terms ended. Hambrett, who joined the firm in 2004, has been the chairman of Baker & McKenzie, Australia since 2009 and also was head of the Australian insolvency and restructuring group.
Holloway has been managing partner of the firm’s Toronto office since 2007. He focuses on intellectual property law, particularly in relation to trademark, patent, copyright and trade-secret disputes. He joined the firm immediately after graduating from law school in 1991, Baker & McKenzie said in a statement.
The executive committee is Baker & McKenzie’s primary management team, with responsibility for developing and implementing the firm’s global business strategy, as well as managing the day-to-day business. It consists of eight elected partners, including the chairman, Eduardo Leite.
Leite said in a statement that he’s confident the new leaders’ experience and skills will “move forward our strategy and focus on becoming a more client-driven and performance-based firm.”
In other management news, current executive committee member Winston Zee in Hong Kong was elected chairman of the Asia Pacific Regional Council. Zee joined the firm in 1981 and the executive committee in 2010.
The firm also announced several new practice leaders. Simon Hughes will become chair of the private-equity practice group and Ashok Lalwani assumes the chair of the India focus group. Pitts will be chair of the newly formed global financial institutions industry group. Erik Scheer takes over as chair of the global tax practice group.
The firm said its worldwide fee income was $2.31 billion in the fiscal year that ended June 30.
The management changes were announced at the firm’s annual meeting, held this year in New York. Almost 700 partners from 71 offices in 44 countries attended. The firm has more than 4,000 lawyers.
Bingham, Manatt, K&L Gates, Cooley Hire New Partners
Law firms hired new partners at offices in Washington, New York, Chicago and Sacramento, California, in a range of practices, including regulatory, corporate, litigation and environment and energy.
Bingham McCutchen LLP said former White House deputy counsel John Schmitz will join the global regulatory and transactional practice and Bingham Consulting LLC. Schmitz will be a partner and principal in Bingham Consulting in the Washington office.
Before joining Bingham, Schmitz served as managing partner of Schmitz Global Partners, a consulting firm with offices in Washington and Berlin, representing U.S. and European companies in international transactions and regulatory matters.
Schmitz served as a partner at Mayer Brown LLP from 1993 to 2009 and was the founding partner of the firm’s offices in Germany. Before joining Mayer Brown, Schmitz served as deputy counsel to President George H. W. Bush from 1989 to 1993.
Manatt, Phelps & Phillips LLP announced that Harry W.R. Chamberlain II joined the firm’s Sacramento office as a partner in the litigation division. Chamberlain was previously at Buchalter Nemer in Los Angeles, the firm said.
He has experience in appellate and insurance work, focusing his practice on appellate and regulatory law, complex litigation and employment law.
Scott R. Miller joined Sheppard, Mullin, Richter & Hampton LLP as a partner in the intellectual property practice group, based in the firm’s Los Angeles office. Miller joins from Connolly Bove Lodge & Hutz LLP, where he was partner-in-charge of the Los Angeles office and a member of the firm’s management committee, Sheppard Mullin said.
Mitchell G. Mandell joined White & Williams LLP as a partner in the commercial litigation and financial restructuring and bankruptcy groups in the New York office. He previously was a partner at Norris McLaughlin & Marcus PA, where he headed the New York office litigation practice group.
Mandell has more than 25 years’ experience handling commercial litigation matters and corporate transactions and specializes in the resolution of global commercial disputes, involving both foreign and domestic businesses.
The Chicago office of K&L Gates LLP added Donald E. Bingham as a partner in its finance practice. Bingham joins the firm from Sidley Austin LLP.
Bingham focuses his practice in the areas of commercial lending, intellectual property finance, capital markets and structured finance transactions.
Cooley LLP announced that Scott S. Balber joined the firm as a partner in its New York office. Balber was co-chair of Chadbourne & Parke LLP’s commercial litigation practice. He joins Cooley’s business litigation practice group as head of financial services litigation.
Balber’s clients include financial institutions, as both plaintiffs and defendants in complex commercial cases, as well as in connection with securities class actions and regulatory matters.
McCarter & English LLP hired Marshall B. McLean as special counsel in the environment and energy and corporate practice groups. He will be based in the firm’s Newark, New Jersey, office. McLean previously was an associate in the corporate and securities and energy and natural resources groups of Reed Smith LLP in Princeton, New Jersey.
McLean represents developers, manufacturers and investors in the renewable energy industry. His work in this area includes the Solar Energy Generating Systems projects in California and the Riverside Renewable Energy project in Gloucester City, New Jersey. McLean has advised on wind projects as well, including the Alta project in Mojave, California.
McLean also maintains a traditional corporate practice focused on mid-market mergers and acquisition matters, including corporate finance, securities law and regulatory compliance.
Hartford Faces Lawyer’s Claim Involving Treasury Official
Hartford Financial Services Group Inc. (HIG) went to trial in a lawsuit by a Texas lawyer who accuses the insurer of causing him to be prosecuted on bribery charges that were dropped after a mistrial.
The negligence lawsuit includes the lawyer’s accusation that the company’s former general counsel, Neal S. Wolin, now U.S. deputy treasury secretary, took part in a cover-up linked to alleged extortion by two employees, according to court filings.
Todd Hoeffner, the lawyer seeking $25 million in damages, sued the Hartford, Connecticut-based insurer in state court in Houston. Wolin, who isn’t named as a defendant in the lawsuit, testified against Hoeffner in a 2009 criminal trial that ended with a deadlocked jury. Wolin’s testimony will be part of the jury trial that began yesterday with opening statements by lawyers.
Hoeffner was charged with making illegal payments to two claims processors to get inflated insurance settlements for clients suffering from silicosis. The charges followed an internal company investigation ordered by Wolin and given to federal prosecutors, according to court records.
Jurors at the 2009 trial couldn’t reach a verdict. Hoeffner, later faced with new charges that didn’t include bribery, agreed to pay prosecution costs and the criminal case was dropped.
Hoeffner sued Hartford in October 2011 on claims the insurer lied to the government about him. The motive, he said, was to hide the claims processors’ extortion of $3 million from the portion of the settlements paid to him as legal fees. He accuses Hartford of negligence, economic duress, interference with his attorney-client relationships and intentional infliction of emotional distress.
Hartford protected the employees to keep them from telling regulators the company lacked sufficient cash reserves to pay asbestos-related claims at the time of the scheme, and Wolin participated in the cover-up, Hoeffner said in court filings.
Wolin, through his attorney, denied Hoeffner’s allegations and said that when he learned of what appeared to be a bribery scheme involving rogue workers, he ordered company investigators to dig into the matter.
The case is Sanchez v. Hoeffner, 2010-15489, 133rd Judicial District Court of Texas (Houston).
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Stephen King Agent Sued by Lawyer for $1 Million Over Firing
A lawyer who said he represented Stephen King for more than 30 years sued the author’s agent, Arthur Greene, for at least $1 million in damages over his firing.
Jay D. Kramer was fired March 30, shortly after Greene and his wife met with King, according to the lawsuit filed yesterday in New York State Supreme Court in Manhattan. Kramer said he and Greene had been discussing the splitting of commissions.
Greene, who also acted as King’s accountant, and his wife, Susan Greene, were “motivated by resentment toward Mr. Kramer” and “greed,” according to the complaint.
“Defendants’ misrepresentations and other misdeeds and the resulting improper termination of Mr. Kramer have also damaged his reputation in the entertainment industry,” a lawyer for Kramer, David M. Schreier, said in the complaint.
King was the world’s second-highest-earning author in the past year, grossing about $39 million, trailing only James Patterson, according to Forbes.com. Greene, in a telephone interview, said he represents King and that Kramer “worked for me.” He declined to comment further.
Greene retained Kramer on King’s behalf in 1978, according to the complaint. Kramer later worked independently of Greene on publishing agreements and other work, he claimed.
The case is Kramer v. Greene, 653567-2012, New York State Supreme Court, County of New York (Manhattan).
On The Docket
Goldman Sachs’s Tourre Gets July 15 Trial Date in SEC Suit
Goldman Sachs Group Inc. (GS)’s Fabrice Tourre will go to trial July 15 in the U.S. Securities and Exchange Commission’s lawsuit accusing him of misleading investors in a collateralized debt obligation.
U.S. District Judge Katherine Forrest in Manhattan set the trial date yesterday at the end of a hearing in which an SEC lawyer argued that she should reinstate some claims against Tourre that another judge dismissed earlier in the case.
Last year, U.S. District Judge Barbara Jones threw out some of the SEC’s claims after Tourre argued that he couldn’t be held liable under U.S. securities law for transactions that occurred outside the country.
The SEC argued yesterday that the claims should be reinstated because of a recent appeals court ruling that applied a broader definition of “domestic securities transaction” than the one used by Jones. Tourre’s case was assigned to Forrest last week.
Tourre, 33, who is studying for a Ph.D. in economics at the University of Chicago, wasn’t present in the courtroom yesterday. His lawyer, Pamela Chepiga, a partner at Allen & Overy LLP, told Forrest that she will check with her client to make sure there is no conflict between his exams and the trial date.
The SEC sued Goldman Sachs and Tourre in April 2010. The New York-based investment bank agreed in July 2010 to pay $550 million to settle the allegations against it.
The case is SEC v. Tourre, 10-03229, U.S. District Court, Southern District of New York (Manhattan).
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