Dell Inc. (DELL) said yesterday it received proposals from Blackstone Group LP (BX) and Carl Icahn that may be superior to Michael Dell’s $24.4 billion buyout plan, putting pressure on the founder to sweeten his terms or switch allegiances. The new bidders increase the number of lawyers who are working on the deal.
Blackstone’s plan values Dell at more than $14.25 a share, while Icahn would pay $15 a share in cash for as much as 58.1 percent of the stock, Dell said yesterday in a statement that included their offers. Under both plans, some shares may continue to be publicly traded. Michael Dell, who proposed $13.65 a share, is willing to work with third parties on the alternative plans, the company said.
The challenges, under the “go-shop” provisions of the original bid, came as Dell struggles to catch up with a new wave of nimbler competitors in mobile computing and business services, mean Michael Dell could lose control of the firm he founded in his Texas dorm room in 1984. His plan, backed by partner Silver Lake Management LLC, was to retool Dell as a maker of data-center gear and software for corporations -- without the scrutiny of public investors.
Blackstone, which proposes a leveraged recapitalization transaction, is represented by partners David Fox, Daniel Wolf and Leo Greenberg of Kirkland & Ellis LLP. Under the bid, investors could choose to get either all cash or equity, subject to a cap, if they want to stay invested in Dell. The shares would continue to be publicly traded.
Simpson Thacher & Bartlett LLP often represents Blackstone, but it is representing Silver Lake in the original buyout bid. Debevoise & Plimpton LLP is advising the special committee of Dell’s board. Hogan Lovells LLP is advising Dell and Wachtell, Lipton, Rosen & Katz is advising Michael Dell.
Icahn is offering shareholders the option to roll over their stakes or receive $15 a share in cash, with the amount of cash to be used limited to $15.65 billion, according to the statement. Icahn has enlisted Jefferies LLC to conduct due diligence on Dell.
Icahn’s offer assumes that Southeastern Asset Management Inc. and T. Rowe Price Group Inc., among the largest Dell investors after Michael Dell, would contribute their stakes and won’t receive a cash payment.
Keith Schaitkin, the general counsel of Icahn Enterprises LP (IEP), declined to disclose the lawyers who worked on Icahn’s bid.
For more on the bids, click here.
Hine, Majumder Join Dallas Office of Perkins Coie
Kelly D. Hine and I. Bobby Majumder joined the Dallas office of Perkins Coie LLP as partners. Three associates have joined as well, the firm said in a statement.
Hine was most recently a partner at Fish & Richardson PC. His practice area includes trade secrets, commercial contracts, commercial torts, non-disclosure/non-competition agreements, trademarks, copyrights, antitrust and appellate proceedings. In addition, his practice involves counseling and litigation of insurance coverage matters, particularly matters involving coverage of intellectual property related claims.
Majumder was most recently a partner at K&L Gates LLP. His practice focuses on corporate and securities transactions in variety of industry sectors, primarily in energy and mining, health care and information technology. He represents underwriters, placement agents and issuers in both public and private offerings, advises on mergers and acquisitions and represents private equity funds, hedge funds and venture capital funds in connection with both their formation and their investments.
Steve Smith, the office managing partner in Dallas, said in the statement that “their addition bolsters our current capabilities and will allow us to better serve our local clients in Dallas and throughout the country.”
Employment Law Firm Ogletree Gains Shareholder in California
Frank Tobin is joining Ogletree, Deakins, Nash, Smoak & Stewart PC, a labor and employment firm representing management, as a shareholder in its San Diego office. The firm opened its San Diego office in January.
Tobin is a litigator who has handled about 20 trials, including serving as the lead counsel in both jury and bench trials and arbitrations. His labor and employment litigation practice focuses on the Employee Retirement Income Security Act breach of fiduciary duty, contract disputes, unfair competition, wrongful termination, and trade secret matters. He also has experience with health-care litigation and counseling and defending class action lawsuits.
He previously was a partner at Procopio, Cory, Hargreaves & Savitch LLP.
“Frank is a masterful litigator with significant trial experience in both state and federal courts, including multiple Erisa fiduciary duty lawsuits,” said Spencer Skeen, managing shareholder of Ogletree’s San Diego office, said in a statement.
Tobin served in the U.S. Army from 1988 to 1997.
Ogletree has more than 650 lawyers located in 43 offices in the U.S and Europe.
Law Firm News
Former Client Accuses DLA Piper of Churning Fees in Lawsuit
A lawsuit between DLA Piper LLP and a former client is offering a rare look at law firm billing, the New York Times reported. E-mails from lawyers at the firm expose, according to a brief filed by the former client, Adam Victor, attorneys who “churn time, inflate bills, create unneeded work or expend time performing useless work.”
The law firm last year sued Victor in New York state court seeking fees for work done in the restructuring of Victor’s energy business, Project Orange Associates. DLA Piper had to withdraw because of a client contact, but claims it remained counsel to Victor personally and incurred more than $600,000 in fees, according to court documents.
Victor’s lawyers at Davidoff Hutcher & Citron LLP filed the e-mails last week from DLA Piper lawyers suggesting the magnitude of the bills. One e-mail read, “I hear we are already 200k over our estimate -- that’s Team DLA Piper!” Another e- mail said one lawyer “has random people working full time on random research projects” in “‘churn that bill, baby!’ mode.”
“As a firm, we hold ourselves to the highest legal and ethical standards,” Joshua Epstein, a spokesman for DLA Piper, said in an e-mail. “The behavior as described is unacceptable to DLA Piper and our clients.
‘‘The e-mails were in fact an offensive and inexcusable effort at humor, but in no way reflect actual excessive billing,’’ Epstein said. ‘‘Instead, the reality of the matter is that the amount of fees billed by DLA Piper was consistent with an understanding expressly reached with the client.’’
SNR Denton Promotes 16 Lawyers to Partner Worldwide
SNR Denton LLP promoted 16 attorneys -- four in the Middle East and Europe and 12 in the U.S. -- to partner.
Those promoted overseas are Catherine Beckett, corporate, Dubai; Sadaf Buchanan, banking & finance, Muscat; Helen Simpson, dispute resolution, Milton Keynes, England; and Zoe Thirlwell, restructuring & insolvency, London.
In the U.S. those named partner are Todd Anderson, tax, New York; Darin Deaver, intellectual property & technology, Dallas; Daniel Feinberg, litigation, Chicago; Karen Jordan, corporate, St. Louis; Ramji Kaul, litigation, Chicago; Imran Khaliq, intellectual property & technology, Silicon Valley, California; Keith Londo, real estate, Chicago; Matt Lyons, capital markets, New York; Katharine Mellon, litigation, Chicago; Matthew Nickel, litigation, Dallas; Paul Turvey, real estate, Kansas City, Missouri; and Stephanie Zeppa, corporate, Silicon Valley/San Francisco.
SNR Denton’s combination with international firm Salans and Canadian firm Fraser Milner Casgrain will become effective on March 28. The combined firm will be called Dentons, with more than 2,500 lawyers and professionals in 79 locations in 52 countries.
New York Seeks Approval to Finish $410 Million Merkin Settlement
New York Attorney General Eric Schneiderman asked a federal judge for permission to complete a $410 million settlement with J. Ezra Merkin, using his law enforcement powers to compensate the former Bernard Madoff investor’s victims.
Madoff brokerage liquidator Irving Picard, who seeks to collect $500 million from Merkin for different investors, is trying to block the deal. Schneiderman has argued that Picard has no claim to the settlement money and lacks power as a bankruptcy trustee to stop the state from enforcing the people’s legal rights.
U.S. District Judge Jed Rakoff began a hearing in Manhattan federal court yesterday by asking the parties to address the state’s argument that Picard had waited too long to try to block its suit. David Ellenhorn, a lawyer from Schneiderman’s office, told Rakoff that investors refrained from bringing their own claims against Merkin in reliance on the attorney general’s suit.
Investors in Merkin’s hedge funds lost more than $1.2 billion in the Madoff fraud, New York has said. Madoff, arrested in 2008, is serving 150 years in prison for the largest Ponzi scheme in U.S. history, which effaced an estimated $17 billion of investors’ principal.
The combatants portray their deadlocked fight as a clash between state law, governing a top law enforcer, and bankruptcy law, regulating trustees in fraud cases. Rakoff took over the case from a bankruptcy judge to decide if Schneiderman can complete the deal with Merkin.
Amanda Remus, a spokeswoman for Picard, said earlier this month the parties hadn’t had talks to resolve the dispute ‘‘of late and none are anticipated.” James Freedland, a spokesman for Schneiderman, has declined to comment on the possibility of a truce.
With Picard’s consent, the settlement agreement struck with Merkin was filed under seal in court after Merkin requested confidentiality for some material he provided.
The case is Picard v. Schneiderman, 12-cv-06733, U.S. District Court, Southern District of New York (Manhattan).
For more, click here.
Ex-Calpers CEO Buenrostro Will Plead Not Guilty, Lawyer Says
Federico Buenrostro, former chief executive officer of California Public Employees’ Retirement System, will plead not guilty to charges he conspired to trick the pension fund into paying millions of dollars to a placement agent, his lawyer said.
Buenrostro, 64, faces conspiracy and other charges for allegedly helping to create false documents so Alfred Villalobos could garner $14 million in fees for arranging a $3 billion Calpers investment into funds managed by Apollo Global Management LLC. (APO) Villalobos was also charged.
William Portanova, Buenrostro’s attorney, said in an interview yesterday his client will plead not guilty and defend himself against the charges in federal court in San Francisco. Buenrostro appeared yesterday at a hearing about the terms of his bail. He is free on a $500,000 unsecured bond. U.S. Magistrate Judge Nathanael Cousins upheld the amount and released Buenrostro from electronic monitoring.
His next scheduled court appearance is May 8.
The case is U.S. v. Villalobos, 13-cr-00169, U.S. District Court, Northern District of California (San Francisco).
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