Brown Rudnick LLP announced the opening of a new Paris office and the hiring of California Treasurer Bill Lockyer.
Lockyer, who will remain in his government post until his term ends in January 2015 while practicing law part-time at Brown Rudnick, will be of counsel in the firm’s government law and strategies team, working out of the Orange County, California, office.
In other news OF the firm, Sebastien Bonnard, most recently of Lacourte Raquin Tatar, joined Brown Rudnick to help lead a new Paris office with Nicholas Tse, the head of the firm’s international arbitration group in London. Both men previously worked together at the complex-disputes and international arbitration practice at Paris-based Gide Loyrette Nouel.
Lockyer, 72, has held elective office for more than 40 years and been treasurer since 2007. Prior to that, he was the California attorney general and a member of the state legislature. He led the state Senate from 1994 to 1998.
“I’m attracted by the firm’s reputation for excellence, its entrepreneurial spirit and collaborative culture,” Lockyer said in a statement. “I will continue to devote all of the considerable time and attention necessary to carry out my responsibilities as state treasurer, as I have throughout my time in public service.”
Joseph F. Ryan, chairman and chief executive officer of Brown Rudnick, said in an interview that negotiations with Lockyer came about thanks to Orange County partner Ron Rus, who knew Lockyer wasn’t planning to continue in office at the end of his term.
The part-time position at Brown Rudnick will ensure that Lockyer can carry out his public responsibilities free from distractions, conflicts or time constraints, while benefiting the firm, Ryan said.
“He has a wealth of experience in the financial services industry and various regulatory schemes,” Ryan said. “His ability to help our clients strategize and offer advice about how to deal with legal issues and policy issues will be very valuable.”
Lockyer is the fourth recent lateral addition to the Orange County office, which the firm acquired in April through a combination with Rus, Miliband & Smith.
“The office is now almost twice as large as when we started in April and we are anticipating more growth,” Ryan said. “We’re focusing on the corporate practice, intellectual property and, particularly, on life sciences.”
In Paris, Bonnard joins Brown Rudnick’s Paris-based group along with Herve Le Lay, also a former Gide and Lacourte attorney. Bonnard said in a statement that lawyers with common law and civil law experience will work together on a “fully integrated” team in coordination with U.S. colleagues.
Brown Rudnick has 230 lawyers at offices in the U.S. and Europe.
Latham, Skadden Advise on Avago’s $6.6 Billion LSI Purchase
Latham & Watkins LLP represented Avago Technologies Ltd. (AVGO), a Singapore-based chipmaker that agreed to buy LSI Corp. (LSI) for $6.6 billion, gaining semiconductors for disk drives and other electronics. Skadden, Arps, Slate, Meagher & Flom LLP advised LSI.
Avago will pay $1 billion in cash and use a $4.6 billion bank loan, the companies said in a statement yesterday. Silver Lake Partners, a private-equity firm that helped acquire Avago before its initial public offering in 2009, will provide a $1 billion investment toward the all-cash purchase. Simpson Thacher & Bartlett LLP is advising Silver Lake.
The deal team was led by corporate partners Christopher “Kit” Kaufman, Luke Bergstrom and Anthony Richmond of Latham’s Silicon Valley office. Additional partners included Anthony Klein, intellectual property; Grace Chen, tax; James Metz, employee benefits; Michelle Kelban, real estate; Karen Silverman and Joshua Holian, antitrust; Edward Shapiro, William McGlone and Robert Sims, regulatory; and Gregory Rodgers and Jennifer Van Driesen, financing.
Skadden’s team included corporate partner Amr Razzak; intellectual-property and technology partner David Hansen; tax partner Sean Shimamoto; and antitrust partners Alec Chang and Frederic Depoortere.
Simpson Thacher’s team included partners Bill Hinman and Daniel Webb, corporate; Jen Hobbs, debt financing; and Katharine Moir, tax.
The transaction is the year’s second-biggest deal in the semiconductor industry, following the $9.4 billion acquisition of Tokyo Electron Ltd. (8035) by Applied Materials Inc. (AMAT) in September. The purchase will create a business with about $5 billion in annual revenue and provide Avago with a range of storage chips that it can sell to data-center customers. Avago also expects to get $200 million in annual cost savings.
“This combination will increase the company’s scale and diversify our revenue and customer base,” Hock Tan, Avago’s chief executive officer, said in the statement. “As we integrate LSI onto the Avago platform, we expect to drive LSI’s operating margins toward Avago’s current levels.”
LSI jumped 39 percent to $10.96 after the deal was announced. Avago rose as much as 11 percent.
LSI stockholders will receive $11.15 in cash for each share of LSI common stock at the completion of the deal, which is expected in the first half of 2014, according to the statement. The transaction will boost Avago’s free cash flow and earnings per share immediately after it closes, the company said.
The purchase would be the largest deal for Avago, which was founded in 1961 as an electronics division of Hewlett-Packard Co. It pioneered the market for light-emitting-diode displays before expanding into fiber-optic transmitters, optical mouse sensors and other equipment. It then became part of the Agilent Technologies Inc. spinoff from Hewlett-Packard in 2000.
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Debevoise, Cravath Advise on AIG’s $5 Billion Plane Lease Sale
Debevoise & Plimpton LLP advised American International Group Inc. (AIG), which agreed to sell the world’s second-largest aircraft lessor to AerCap Holdings NV (AER) for $5 billion after a group of Chinese bidders missed deadlines to buy the business.
Cravath, Swaine & Moore LLP represented AerCap.
The Debevoise team was led by partners Andrew L. Bab and John M. Vasily and included partners Geoffrey P. Burgess and Pierre Maugue. The Cravath team included partner Scott A. Barshay on mergers and acquisitions.
AerCap will acquire all of International Lease Finance Corp. for $3 billion in cash and 97.6 million of its shares, the companies said yesterday. The deal, set to close in the second quarter, gives AerCap control of the merged company, with AIG holding 46 percent. AerCap shares surged the most since 2009.
AIG turned to Schiphol, Netherlands-based AerCap after investors led by Hong Kong-based P3 Investments Ltd. failed to deliver the $4.2 billion that they agreed to pay for an 80 percent stake.
AIG, a New York-based insurer, has been seeking to narrow its focus as the government increases its scrutiny of the largest financial firms.
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GSC Bankruptcy Fee Dispute Involving Kaye Scholer Concluded
The culmination of the bankruptcy for fund manager GSC Group Inc. entailed “sweeping allegations of misconduct” made against Capstone Advisory Group LLC and Robert Manzo, the company’s financial advisers, and against GSC’s lawyers from Kaye Scholer LLP, U.S. Bankruptcy Judge Shelley C. Chapman said in a 120-page opinion Dec. 12 docking their fees.
The crux of the controversy was whether Manzo improperly failed to disclose he wasn’t an employee of Capstone and had a fee-sharing arrangement with the advisory firm. Although Chapman called Manzo “one of the leading financial advisers,” she said he and Capstone “purposefully did not disclose” the fee arrangement.
Kaye Scholer was called to task because it was the law firm that drafted papers with faulty disclosures.
Chapman reduced Capstone’s fees by almost $1.5 million, granting the firm about $4.4 million from a $5.9 million fee request. In addition, Capstone withdrew a request originally seeking a $3.25 million bonus.
Although not unscathed, Kaye Scholer got less criticism because it said early on that “mistakes were made.” Consequently, Chapman accepted the firm’s offer to reduce fees about 28 percent, to $3.9 million from about $5.4 million.
Chapman called Kaye Scholer’s work in the case “stellar.”
Creditors Black Diamond Capital Finance LLC led the attack on Kaye Scholer, Capstone and Manzo. Chapman protected Kaye Scholer from being sued later by Black Diamond. She said that her fee award to the firm would bar anyone from bringing a malpractice claim.
The judge said the malpractice allegations directed at Kaye Scholer “should be added to the waste bin of frivolous and mean-spirited pleadings.”
“We are immensely gratified by the judge’s ruling,” Aaron Rubinstein, chairman of Kaye Scholer’s risk management committee and the firm’s lead trial attorney in the proceeding, said in a statement. “Not only did the court praise the quality of the firm’s work, and the benefit it provided the estate, but a highly respected and experienced bankruptcy judge put to rest once and for all the scurrilous attacks on the firm’s integrity. We have been vindicated.”
The case is In re GSC Group Inc., 10-bk-14653, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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Cahill Gordon’s Special Bonuses for Associates Top Rivals’
Cahill Gordon & Reindel LLP announced that associates at the firm will get “special bonuses” of as much as $25,000 on top of their regular year-end bonuses, putting the firm above the industry standard.
Cravath, Swaine & Moore LLP usually sets the bar for law firm bonuses and is followed by most, but not all, the big firms. Cravath announced bonuses of as much as $60,000 this year, and was matched by Skadden, Arps, Slate, Meagher & Flom LLP and Cleary Gottlieb Steen & Hamilton LLP, according to website Above the Law.
Cahill associates in the classes of 2005 through 2009 will get $25,000 in addition to a bonus payment on a scale that tops out at $60,000 for the most senior associates, according to a firm memo. The bonuses are in addition to a summer bonus the firm paid of $10,000.
“We had another strong performance this year in our practices across the board and will again pay a special bonus to our associates in appreciation for their outstanding effort and performance,” William M. Hartnett, the chairman of Cahill’s executive committee, said in an e-mailed statement.
One firm that consistently bucks the trend is Boies, Schiller & Flexner LLP, which this year paying associates as much as $300,000, the New York Times reported last week.
Boies Schiller’s bonuses this year are higher than those paid last year, when its scale, based on an associate’s seniority, topped out at $250,000, the Times said.
Cravath’s bonuses also increased from last year, when the most senior associates got $37,500, the newspaper reported earlier.
Pfizer Menopause Drug Cases Spur Civil War Over Lead Lawyer Fees
Attorney Zoe Littlepage battled Pfizer Inc. (PFE) for a decade as the lead lawyer for women who blamed its menopause drugs for their breast cancer. Now she says almost $10 million from a shared legal-fees fund isn’t sufficient payment for the risks she bore overseeing more than 8,000 cases.
The way Littlepage sees it, she’s owed twice that given the hours she put in litigating cases over Prempro and other menopause medicines and the trials and settlements she won. In a rare tactic in such fee disputes, she has taken her spat with fellow lawyers public.
Littlepage led a group of attorneys for 8,500 women who sued Pfizer in federal courts over hormone-replacement therapy, or HRT, products. She contends her colleagues are seeking to deny her a proper share of a $40 million fund by recommending that she and another lawyer get a combined $9.52 million for their efforts. The fund was set up to compensate lawyers whose work was used by other attorneys in related cases.
Disputes over what are known as common-benefit fees are common among plaintiffs’ lawyers in product-liability cases that generate millions of dollars, said Carl Tobias, who teaches mass-tort law at the University of Richmond in Virginia and follows consolidated cases, also known as multidistrict litigations, or MDLs. Common-benefit fees are paid for work done on behalf of all litigants in a consolidated case.
“You don’t often get the MDL lead counsel publicly raising the red flag about the fee split,” Tobias said. “These fee fights are nasty business and they are usually conducted in the back room and out of the public’s view.”
Billings submitted by Littlepage, 47, and Rainey Booth, a Florida-based lawyer who teamed with her on Prempro cases, “are exaggerated to the point of absurdity,” Erik Walker, a member of the Pfizer MDL fee committee, said in a Dec. 9 court filing.
Boosting Littlepage’s and Booth’s fees would give them the “lion’s share of common-benefit fees despite the significant contributions by 32 other law firms to the litigation,” Walker said.
The consolidated Prempro case is In re Prempro Products, 03-cv-015070, U.S. District Court, Eastern District of Arkansas (Little Rock).
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Brown’s Planned Move to New Hampshire Spurs Talk of Senate Bid
Scott Brown, the former Republican U.S. senator from Massachusetts, found a buyer for his Wrentham home and plans to move to New Hampshire, according to his boss, Andrew I. Glincher, managing partner and chief executive officer of Nixon Peabody LLP.
Brown, 54, will continue to work out of the firm’s Boston office because he isn’t licensed to practice law in New Hampshire, Glincher said in an interview.
Brown didn’t immediately respond to an inquiry by e-mail.
The move may fuel speculation that Brown is preparing to challenge New Hampshire’s Democratic U.S. Senator Jeanne Shaheen, who is seeking re-election next year. Brown lost his Massachusetts seat to Democrat Elizabeth Warren in 2012.
Brown owns a vacation home in New Hampshire and made a number of public appearances in the state this fall. He’s scheduled to headline the New Hampshire Republican State Committee’s annual holiday party on Dec. 19 in Nashua.
Earlier this year, Brown won clearance to spend money from his federal political action committee in the state.
Glincher said Brown hasn’t made up his mind about running for Senate, although he thinks the former senator has ambitions beyond the law firm.
“Some people, when they start, you are already writing the press release for when they leave,” Glincher said.
Brown, in a 2010 special election, won the Massachusetts seat held for almost half a century by Democratic Senator Edward M. Kennedy, who died in 2009.
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