Federal securities class-action filings decreased by about 10 percent last year from 2011, PricewaterhouseCoopers found in its 17th annual Securities Litigation Study published yesterday. There were 172 cases in 2012, compared with 191 cases in 2011, with a significant drop in the fourth quarter of 2012.
“2012 was a year that implied no clear direction as to where regulators or shareholders may focus in the future,” Patricia Etzold, securities litigation partner with PwC said in a statement. We are at “a crossroads, waiting for a sign. 2013 looks to be a year that could go in many different directions,” she said.
The first three quarters of 2012 had an average of 46 cases, while the fourth quarter had a decrease to 33 cases -- the lowest level since the 30 cases filed in the second quarter of 2009, according to the survey.
The presidential election and the “fiscal cliff” may have affected the last quarter, along with Hurricane Sandy, according to the survey.
Financial crisis filings, China-based companies and, to a lesser extent, merger & acquisition transactions, saw significant decreases during 2012. There were three financial- crisis-related cases filed in all of 2012 after 178 cases were filed from 2008 to 2011.
The number of settlements and their total value also decreased in 2012. After a 26 percent decline in the number of settled federal securities class-action cases from 2010 to 2011, cases settled in 2012 decreased by 7 percent. The total value of settlements in 2012 was the lowest amount since 2002, according to the survey.
Joel Haims, co-chairman of Morrison & Foerster LLP’s securities litigation, enforcement, and white-collar defense group said in an e-mail that he expects 2013 to be busier. “With an uptick in merger activity post-economic crisis, we’re likely to see more class actions challenging deals.”
To see the survey, click here.
Brown Rudnick Opens West Coast Office With Boutique Merger
The move gives Brown Rudnick’s 200 lawyers an Orange County office, its first presence in California and sixth U.S. office. The firm also has overseas offices in Dublin and London.
“Our new Orange County office not only enables us to serve our Southern California and West Coast clients more effectively, it also complements our strength in the technology and life sciences sectors and opens a gateway to Asia where our clients increasingly are engaged in business,” Joseph F. Ryan, chairman and chief executive officer of Brown Rudnick said in a statement.
Among those clients that helped motivate the new office is Hologic Inc., a health devices company and Brown Rudnick’s biggest client, the law firm said. The company is headquartered in the Boston suburbs but has a large presence in southern California, William Baldiga, litigation and restructuring, managing director said in an interview.
Baldiga said that the firm picked Rus Miliband because of its tight practice focus. “They do what they do really well-- they don’t dabble. They are a first class commercial litigation firm, offering the highest quality, which is a perfect platform to expand.” Baldiga expects the office to double in the next year through lateral hires.
Ronald Rus, a founding partner of Rus Miliband, said the firm had been approached by many national firms over the past few years but were won over by Brown Rudnick because of its collaborative culture.
“Brown Rudnick’s clients are institutional,” Rus said in an interview. “They are not a bunch of lawyers trying to protect clients. A client’s matter is given attention by whoever the best lawyer is however the problem needs to be solved.”
Blank Rome Chairman Emeritus Fred Blume Dies
Blank Rome LLP’s chairman emeritus Fred Blume, died April 8 after a long illness, the firm said in a statement.
“Fred’s tenure with Blank Rome lasted close to half a century,” Alan Hoffman, co-chairman and managing partner, said in a statement. “During his time with us, he demonstrated a fierce dedication to his work, his community and his family.”
Blume, 72, was a mergers and acquisitions lawyer, who joined the firm in 1967. He was administrative partner of the firm and then managing partner and CEO from 2003 to 2006.
The firm said he played a key role in its expansion, notably into New York City through a merger with Tenzer Greenblatt and later in Washington through mergers with Wigman Cohen & Meyers and Dyer Ellis & Joseph.
Blume’s family will have a memorial service today in Wynnewood, Pennsylvania, according to the statement. In lieu of flowers, the family requests that donations be made to City Year Greater Philadelphia, the University of Pennsylvania Law School or the Fox School of Business at Temple University.
Howrey Creditors Again Blocked From Suing Partners
A group of creditors of Howrey LLP, a liquidating law firm, failed to convince the bankruptcy judge in San Francisco that they have the right to sue former partners.
The creditor group, Howrey Claims LLC, wanted bankruptcy court permission to sue former partners in federal district court, contending they should be personally liable for the firm’s debt.
U.S. Bankruptcy Judge Dennis Montali formally denied the request this week. He said the group was “attempting to prosecute a claim that belongs to the trustee.”
Howrey Claims failed in a prior effort when it sued former partners in bankruptcy court. Howrey Claims unsuccessfully argued that it was the owner of claims against the firm. In the previous attempt, Montali also said the claims could only be brought by the Howrey trustee. The prior ruling by the bankruptcy judge is under appeal.
Howrey partners lost control of the liquidation when the bankruptcy court authorized appointment of a Chapter 11 trustee in September 2011. Once known for expertise in antitrust and intellectual property law, the firm filed under Chapter 11 in June 2011 following an involuntary filing in April 2011.
The bankruptcy is in San Francisco, where the firm had one if its 19 offices. The firm closed in March 2011. Howrey’s main office was in Washington. It previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. At one time, the firm had more than 700 lawyers.
The case is In re Howrey LLP, 11-bk-31376, U.S. Bankruptcy Court, Northern District of California (San Francisco).
Latham Snags Clifford Chance’s Global Private Equity Head
Clifford Chance LLP’s global head of private equity, David Walker, is leaving the firm to join Latham & Watkins LLP.
“We are delighted at the prospect of David joining our team. His arrival marks another milestone in the expansion of our vibrant and growing London office, which is approaching 250 lawyers,” Latham & Watkins London office managing partner Nick Cline said in an e-mail.
Walker, who specializes in private equity and venture capital work, fundraisings and general mergers and acquisitions, led Clifford Chance teams advising Equistone Partners Europe on the sale of Global Blue last year. He also led the team that represented Carlyle in connection with Glory Limited’s offer to acquire Talaris. He has been a partner at Clifford Chance since 2000.
“We thank David for his contribution to Clifford Chance and wish him the best for the future,” Simon Tinkler, London head of the corporate practice, said in an e-mail.
Walker will join a firm that already works with one of his key clients across the Atlantic. Latham & Watkins has advised Carlyle on U.S. deals including its purchase of DuPont Co.’s auto-paint unit for $4.9 billion, in August and United Technologies Corp.’s Hamilton Sundstrand industrial unit in July.
Obama’s Labor Board Nominees Include Critic of 2011 Boeing Case
President Barack Obama picked a Democrat and two Republicans to the U.S. labor board, including a lawyer who in 2011 faulted the agency’s prosecution of Boeing Co. for opening an airplane factory in South Carolina.
Obama yesterday nominated Republicans Harry Johnson, a lawyer with Arent Fox LLP in Los Angeles who covers management- side labor and employment law, and Philip Miscimarra, a partner in the labor and employment group of Morgan Lewis & Bockius LLP, in Chicago, for the National Labor Relations Board. Chairman Mark Gaston Pearce, whose term end in August, was renominated.
If all three are confirmed by the Senate, the NLRB will be at full strength and without the uncertainty created when a federal court in January said three 2012 appointees were “constitutionally invalid.” The administration has appealed to the Supreme Court. Republicans have sought to stop the board from issuing decisions until the legal status is resolved.
“He’s trying to make them an offer they can’t refuse,” Gary Chaison, a labor-relations professor at Clark University in Worcester, Massachusetts, said in a telephone interview. “He’s come back to an incredibly contentious issue, but he’s come back to it in a fairly conciliatory way.”
Obama drew fire from business groups and Republicans in February when he nominated Democrats Sharon Block and Richard Griffin. Their 2012 appointments were ruled invalid because Obama had acted when the Senate wasn’t in recess, the U.S. Court of Appeals in Washington ruled Jan. 25. To prevent Obama from making appointments, House and Senate Republicans refused to declare a recess. The Senate then held so-called pro-forma sessions every few days that lasted less than 2 minutes.
Miscimarra, a labor lawyer invited to testify before a House panel in South Carolina on June 17, 2011, criticized the board’s acting general counsel, Lafe Solomon, for issuing a complaint against Boeing (BA) in an unfair labor practice case tied to building a factory in South Carolina, a state where laws forbid collective bargaining agreements that require union membership.
“The board’s general counsel acts like a traffic cop,” Miscimarra told the House Committee on Oversight and Government Reform. “But traffic citations don’t routinely involve impounding the car for five to 10 years. And that’s the practical effect when an NLRB complaint challenges major investment decisions.”
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‘Wild West’ of Lawsuit Funders Supports Divorcees to Soldiers
Jane Ong thought she had a good case to sue her accountants in Singapore over asset valuations during a two-decade divorce fight. Short of money, she persuaded a litigation funder -- an investor that pays for a lawsuit in return for a share of the proceeds -- to help, Bloomberg News’ Kit Chellel reports.
Buttonwood Legal Capital Ltd. funded Ong’s claim in the country for about two years before pulling out in 2012, she says, leaving her with legal bills she couldn’t pay.
“They left me again owing money,” the 52-year-old London resident said. “This was meant to be good for me.”
Litigation funding is a fast-growing industry that backs some of the U.K.’s biggest lawsuits. Funders have invested in an ex-soldier’s $1.6 billion claim against Gulf Keystone Petroleum Ltd. (GKP), and a class action by thousands of Royal Bank of Scotland Group Plc (RBS) shareholders over the lender’s 2008 rights issue.
Supporters say the industry improves access to justice by allowing people who couldn’t normally afford it to sue wealthier opponents. If a case is successful, both investors and litigants win, sharing any compensation. When things go wrong and disputes break out, the situation isn’t so clear.
“The litigation funding market still has a long way to go in its development,” said Michelle Duncan, a London lawyer with Paul Hastings LLP. “At the moment it’s still pretty unsophisticated and is also unregulated -- it’s a bit like the Wild West.” She said the firm’s London office hasn’t worked on cases funded by outside parties.
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Weil Advises Thomas H. Lee on CompuCom Acquisition
Weil, Gotshal & Manges LLP acted as legal adviser to Thomas H. Lee Partners LP, which agreed to buy CompuCom Systems Inc., a provider of information technology services, from private-equity firm Court Square Capital Partners for an undisclosed amount. Dechert LLP acted as legal adviser to CompuCom and Court Square.
Weil corporate partner Kevin Sullivan in Boston led the firm’s team, which included benefits partners Michael Kam and Michael Nissan; technology and intellectual property transactions partner Jeffrey Osterman; and banking and finance partner Andrew Yoon.
The Dechert partners involved were Gerrie Sinatra and Kenneth Young, corporate; and Edward Lemanowicz, tax.
The purchase of CompuCom, which had $2.3 billion of gross revenue in 2012, is expected to close in the second quarter, according to a statement yesterday from the Dallas-based company. Court Square Capital, based in New York, and IIM Acquisition Corp., an affiliate of Court Square, bought the company in 2007 for $628 million.
Thomas H. Lee has backed business processing and managed IT services firms in the past. The Boston-based firm in 2010 invested in Systems Maintenance Services, a provider of managed IT maintenance services to corporations for hardware infrastructure. It also backed Fidelity National Information Services Inc. (FIS), a provider of banking and payments technologies.
Citigroup Global Markets Inc., JPMorgan Chase & Co., BMO Capital Markets and Jefferies Finance LLC are offering committed financing for the deal. BMO Capital Markets and Jefferies LLC are financial advisers.
‘Gray Market’ Lawyer: Congress Won’t Change Copyright Laws
Joshua Rosenkranz, head of the supreme court and appellate litigation practice at Orrick, Herrington & Sutcliffe LLP, talks with Bloomberg Law’s Spencer Mazyck about obtaining a landmark victory from the U.S. Supreme Court on behalf of his client, Supap Kirtsaeng, in one of the top business and consumer cases in the court’s nine-month term, Kirtsaeng v. John Wiley & Sons. On March 19, 2013, the high court ruled that textbooks and other goods made abroad can be resold in the U.S. without violating American copyright law, bolstering the multibillion-dollar “gray market.”
Rosenkranz, in this “Rainmakers” episode, also discusses the implications of the court’s decision for copyright holders, publishers and manufacturers, which say their U.S. sales are being undercut.
This is a Bloomberg podcast. To download, watch or listen to this report now, click here.
Ex-NFL Players’ Lawyers Don’t Need a Briefing on Concussions
As one of eight brothers who played college football, Derriel McCorvey says he has the game in his blood, Bloomberg News’ Jef Feeley and Sophia Pearson report. Now the Louisiana lawyer is trying to make the National Football League bleed over claims that it concealed data about the dangers of concussions.
The ex-Louisiana State University safety is part of a group of plaintiffs’ lawyers in cases filed by ex-NFL players and their families. They argued in a Philadelphia hearing yesterday that the league can’t claim immunity under its collective- bargaining agreements. The NFL is asking a judge to toss the cases, arguing the claims should be heard by arbitrators, not juries.
“The league is pretty powerful,” McCorvey said last year in an interview. “Most people don’t have a good chance of taking on the league.” Still the players’ cases are strong enough that a judge may “reject the NFL’s arguments” for dismissal, the attorney said last week.
Former NFL stars such as Miami Dolphins receiver Mark Duper and Arizona Cardinals running back Lyvonia “Stump” Mitchell allege league officials knew at least since the 1970s that concussions posed long-term health risks and didn’t warn players, coaches or trainers. The league is facing suits filed by more than 4,000 former players, according to court records.
NFL officials failed to take substantial steps to address the risks until 1994, when the league created a Mild Traumatic Brain Injury committee, the players say.
Brian McCarthy, an NFL spokesman, said the league is committed to player safety and is prepared to counter arguments that it downplayed or hid concussion risks.
The cases have been consolidated before U.S. District Judge Anita Brody in federal court in Philadelphia for the exchange of pretrial evidence. Brody will decide whether the players’ claims can proceed to trial.
McCorvey, a former second-team All-Southeastern Conference safety at LSU, is lining up on the plaintiffs’ steering committee with David Buchanan, a former University of Delaware all-conference offensive lineman; Mike McGlamry, an ex-Wake Forest University quarterback; and Gene Locks, a former Princeton University quarterback.
Opposing them in the concussion cases are defense lawyers Beth Wilkinson and Brad Karp, partners in New York’s Paul, Weiss, Rifkin, Wharton & Garrison. Wilkinson was hired last year to lead the Federal Trade Commission’s antitrust investigation of Google Inc.
The NFL’s dismissal motion was argued yesterday by Paul Clement, a former U.S. solicitor general, McCarthy said. Clement recently defended the Defense of Marriage Act, enacted by Congress in 1996, before the Supreme Court.
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