Goodwin Procter, Latham, Paul Weiss: Business of Law

Goodwin Procter LLP advised Cole Credit Property Trust II Inc. on its agreement to merge with Spirit Realty Capital Inc. (SRC) in a stock transaction that would create a company with 2,012 properties in 48 U.S. states. Ropes & Gray LLP represented the Special Committee of CCPT II. Latham & Watkins LLP advised Spirit.

CCPT II will exchange 1.9 shares for each share of Spirit common stock, the Arizona-based companies said in a statement today. Spirit shareholders will own about 44 percent of the combined real estate investment trust with the remainder held by CCPT II shareholders. Shares of the joint company will be listed on the New York Stock Exchange under Spirit’s stock symbol.

The pro-forma enterprise value of the new company is about $7.1 billion, and the acquisition will create the second-largest publicly traded triple-net lease REIT in the U.S., according to the statement. The combined company will be led by Spirit’s management. Seven of the nine board members will be from Spirit, it said.

The Goodwin Procter deal team was led by Gil Menna and included partners Suzanne Lecaroz, John Haggerty, Andrew Sucoff, Mark Opper and Samuel Richardson.

Ropes & Gray partners on the deal are John Loder, investment management; Amanda Morrison, corporate; and Peter Welsh, business and securities litigation.

Latham & Watkins LLP’s corporate deal team consists of Los Angeles partners Julian Kleindorfer and Bradley Helms and Orange County partner Charles Ruck. Advice was also provided by New York finance partner David Teh; Chicago real estate partner Robert Buday; Los Angeles tax partners Michael Brody and Ana O’Brien; and Los Angeles benefits and compensation partner David Taub.

The transaction is expected to be completed in the third quarter, according to the statement. Triple-net lease structures mean the tenant is responsible for paying all the property’s costs including maintenance, property taxes, utilities and insurance, minimizing expenses for the REIT.

News

Prudential Loses U.K. Top Court Ruling on Privileged Tax Advice

The U.K. Supreme Court said tax advice given to Prudential Plc (PRU) by accountants wasn’t protected by legal privilege and should be disclosed to the British government.

The U.K.’s highest court said only advice from lawyers was protected by the privilege, according to a press summary of the judgment today. When tax authorities asked Prudential for information about a tax avoidance scheme created by PricewaterhouseCoopers LLP, the company argued it didn’t have to hand over any documents containing advice from accountants.

“Accountants will be crying into their soup tonight, and tax lawyers will be dancing in the streets,” said Peter Clough, a partner at U.K. law firm Osborne Clarke. “The case presents a clear cut choice for clients: if you want confidential tax advice, you’re better off going to a law firm.”

Companies including Starbucks Corp. (SBUX) and Google Inc. (GOOG) have been criticized by lawmakers for trying to reduce their U.K. tax liabilities with complex accounting methods.

Prudential spokesman Robin Tozer and PwC spokeswoman Laetitia Lynn declined to comment.

Firm News

Jones Day Appoints New Office Heads in Tokyo, San Francisco

Jones Day announced that Masatomo Suzuki has been named partner-in-charge of the firm’s Tokyo office. He succeeds Nobu Yamanouchi, who has been partner-in-charge in Tokyo since 2008. Yamanouchi will continue to advise clients, particularly in the automotive, electronic, and pharmaceutical industries, in cross- border mergers and acquisitions, joint ventures and other corporate matters.

Aaron Agenbroad, a partner in Jones Day’s labor and employment practice, has been named to succeed Bob Mittelstaedt as partner-in-charge of the San Francisco office. The firm also announced that David Kiernan, a partner in the U.S. business and tort litigation practice, will become the administrative partner of the San Francisco office, responsible for the day to day operation of the office. Kiernan replaces Louise Rankin, who left Jones Day to become general counsel of ABHOW, a housing and health care provider for senior citizens.

As head of the real estate practice in Tokyo, Suzuki has experience representing major Japanese real estate companies as well as foreign companies and funds involved in real estate transactions in Japan.

As partner-in-charge, Agenbroad will be responsible for the overall leadership, strategic vision, and management of Jones Day’s San Francisco office. His labor and employment practice has a focus on representing corporate clients in complex labor and employment disputes. Mittelstaedt, who has served as partner-in-charge since 2006, has been asked to assume new responsibilities coordinating and expanding the firm’s litigation practices in California. He has more than 30 years of experience as a trial lawyer.

Moves

Department of Defense GC Johnson Returns to Paul Weiss

Jeh Charles Johnson, the former general counsel of the Department of Defense, has returned to private practice as a partner in Paul, Weiss, Rifkind, Wharton & Garrison LLP’s litigation department in Washington.

“We are so proud of Jeh’s public service and of his contributions to our nation,” Paul, Weiss chairman Brad S. Karp said in a statement. “We are thrilled to welcome a lawyer of his distinction back to our partnership.”

Johnson was appointed to his post by President Barack Obama in February 2009. As chief legal officer at the Defense Department, he oversaw the work of more than 10,000 lawyers. His accomplishments during four years in the post included handling reforms to the military commissions system adopted by Congress in 2009, co-authoring the report that paved the way for the repeal of the military’s “Don’t Ask, Don’t Tell” policy by Congress in 2010, and overseeing the military’s counterterrorism policies, the firm said.

The move marks the third time Johnson has returned to the firm after leaving for government posts. In 1998, he was appointed by President Bill Clinton to be general counsel of the Air Force. He held that position for 27 months and returned to Paul, Weiss in January 2001. In 1989, Johnson left Paul, Weiss to become an assistant U.S. attorney in Manhattan, where he prosecuted public corruption cases.

“It’s a privilege and a pleasure to return to my professional home, Paul, Weiss, and I look forward to rejoining my partners and serving the firm’s clients,” Johnson said in the statement.

Paul, Weiss has more than 700 lawyers at eight offices in the U.S., Europe and Asia.

WilmerHale Hires Ex-Federal Circuit Judge Gajarsa in Boston

Wilmer Cutler Pickering Hale and Dorr LLP hired Arthur J. Gajarsa, formerly a judge of the U.S. Court of Appeals for the Federal Circuit, in its Boston office. Gajarsa joins the firm as senior counsel in the intellectual property litigation practice and will provide counsel to the firm’s clients on IP-related issues.

Gajarsa was nominated to the Federal Circuit in 1996 by President Clinton and confirmed by the U.S. Senate in 1997. He retired in June 2012. Prior to his appointment, Gajarsa was a litigator who also practiced corporate law. His worked at the Commerce Department, the Interior Department and Defense Department, the firm said.

WilmerHale’s IP litigation practice has more than 140 lawyers and technology specialists with scientific or technical degrees. The firm has more than 1,000 lawyers at offices in 12 cities in the U.S., Europe and Asia.

Linklaters Appoints Banking and Restructuring Partner in Spain

Spanish banking lawyer Juan Barona joined Linklaters LLP’s Madrid office from Allen & Overy LLP where he was a partner.

“Our banking practice, and the Madrid office as a whole, has enjoyed significant success over the last few years. The addition of Juan to our team is the result of such success and is an appropriate and timely response to our commitment to best serve our clients’ demands,” Sebastián Albella, Linklaters senior partner for Spain, said in a statement.

Linklaters finance practice in Spain covers restructuring work, leveraged financing, corporate financing, equity and debt capital markets and other matters.

Linklaters opened an office in Spain in 2000. The firm has a team of about 100 lawyers in its Spanish office. The firm has lawyers at 28 offices worldwide.

Edwards Wildman Hires Hogan Lovells Public Finance Partner

Alethia N. Nancoo joined Edwards Wildman Palmer LLP as a partner in the Public Finance Department, in the firm’s Washington office. She was previously with of Hogan Lovells LLP, where she was a partner in the infrastructure, project and public finance practice group, the firm said.

Nancoo’s background is in public and project-debt financings, with a clientele comprised of municipalities, public issuers and authorities, nonprofit corporations, and investment banks, the firm said. She has advised clients in the U.S. and Caribbean in infrastructure construction; airport, toll road and surface transportation; mixed-use multifamily housing; and water and sewer matters.

Edwards Wildman has 625 lawyers at 15 offices in the U.S, Europe and Asia.

Litigation

Glaxo Plaintiff Lawyers Settle Dispute Over $143 Million in Fees

Lawyers who won what may be a $2.3 billion settlement with GlaxoSmithKline Plc (GSK) over its Avandia diabetes drug resolved their own fight over the allocation of almost $144 million in legal fees.

Eight lawyers on a court-appointed fee committee agreed to take a smaller portion of the fee fund after nine objectors challenged their payouts, a special master assigned to review the recommendations said in court papers made public Jan. 18 in federal court in Philadelphia. The fee committee had asked for 71 percent of the fund set aside by U.S. District Judge Cynthia Rufe for the Avandia cases before her.

“Allocating a limited pot of common benefit fees among numerous counsel, all of whom are talented and capable attorneys and many of whom have made a significant contribution to the ultimate success of (a) case, is an unenviable task that is sure to lead to hurt feelings and bruised egos,” Bruce Merenstein, the special master, wrote in the filing. “Yet, all of the parties involved handled this difficult task with care and equanimity.”

The fee fund is 6.25 percent of the total settlement, according to court records. That means the total accord may be worth $2.3 billion and the average payout for the 40,000 users of Avandia involved in the litigation would be about $57,500 -- before legal fees. People familiar with the settlement, who didn’t want to be named because the terms weren’t public, have said the fee fund was 7 percent of the total.

Glaxo, the U.K.’s biggest drugmaker, has said it paid more than $3 billion to settle federal and state government claims that it illegally marketed Avandia, once the world’s best- selling diabetes pill, and other medications. Company officials haven’t said what the drugmaker spent to settle the Avandia lawsuits before Rufe, and in state courts, alleging executives failed to properly warn consumers about the drug’s risks.

The fee-advisory group, led by Philadelphia attorney Dianne Nast, agreed to a lower payout as part of the accord. Nast agreed to take $6.3 million, down from $6.7 million, according to court papers. Joseph Zonies, a Denver-based attorney who was slated to get the highest recommended fee, will see his firm’s payout reduced to $22.5 million from $24.4 million for 18,232 hours of work. Vance Andrus, another Denver-based lawyer, saw the biggest reduction, a cut of about $3 million that left him with a payout of $14.6 million, according to the filing.

Other lawyers in the group, including Thomas Cartmell, Bryan Aylstock, Stephen Corr, Paul Kiesel and Bill Robins III all agreed to reductions from about $700,000 to $1.3 million each, according to court papers.

Fifty-eight law firms are seeking payment from the fund for common benefit work. The proposed payout for 41 firms that did not object will remain unchanged, Merenstein said in the filing. The allocation is subject to final approval from Rufe.

The consolidated case is In re Avandia Marketing, Sales Practices and Products Liability Litigation, 07-01871, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

Audio

Levitt Says White Would Be ‘Tough, Smart’ SEC Chairwoman

Arthur Levitt, former chairman of the U.S. Securities and Exchange Commission, says former U.S. Attorney Mary Jo White, now a partner at Debevoise & Plimpton LLP, would be a tough and smart SEC chairwoman. Levitt, a member of Bloomberg LP’s board of directors, talks with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.”

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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