Kirkland, Fried Frank Advise on Ikaria: Business of Law

Kirkland & Ellis LLP represented Madison Dearborn Partners LLC in its $1.6 billion purchase of hospital therapy provider Ikaria Inc. Fried, Frank, Harris, Shriver & Jacobson LLP and Wilmer Cutler Pickering Hale & Dorr LLP represented Hampton, New Jersey-based Ikaria.

The Kirkland team was led by Chicago-based corporate partners Sanford Perl, Mark Fennell, Matthew O’Brien and Michael Wright and tax partner William Welke.

The Fried Frank team was led by Abigail Bomba and Aviva Diamant and included Craig Miller and Paul Reinstein, corporate; Peter Guryan, antitrust and competition; Donald Carleen, executive compensation and employee benefits; Henry Lebowitz, intellectual property and technology; and Joel Scharfstein, tax.

Lia der Marderosian led the WilmerHale team that included Steve Singer, corporate; Kim Wethly and Bill Caporizzo, tax; Steve Barrett, transactional; Hal Leibowitz, mergers and acquisitions; and corporate counsel Brett Budzinski.  

Existing shareholders of Ikaria, which include New Mountain Capital LLC, Arch Venture Partners, Venrock and 5AM Ventures Management LLC, will reinvest some of the proceeds into a 45 percent stake in the company, according to a Dec. 24 statement from New Mountain. The firms expect the deal to be completed in the first quarter.

Madison Dearborn has done at least five deals this year, according to data compiled by Bloomberg. The Chicago-based private-equity firm in April agreed to buy insurance brokerage National Financial Partners Corp. for about $1.3 billion including debt. Madison Dearborn has an investment in preventative care provider Sage Products LLC, and previous health-care stakes include Team Health Holdings LLC and Valitas Health Services Inc., according to the firm’s website.

For more on the deal, click here.

Lawsuit News

BP Appeals Ruling That Victims Needn’t Prove Spill-Loss Link

BP Plc (BP/) challenged a judge’s ruling that it must pay hundreds of millions of dollars in businesses’ claims without proof the losses were directly caused by the 2010 Gulf of Mexico oil spill.

BP filed a notice of appeal yesterday in federal court in New Orleans, where thousands of spill-damage claims are consolidated. It challenged a decision by U.S. District Judge Carl Barbier saying it must live with terms it negotiated under a $9.2 billion settlement of most private damage claims.

Barbier issued the ruling after an appeals court ordered him to re-evaluate terms of the accord, which BP contends requires businesses to prove their losses were caused by the spill. The London-based company says it’s paying hundreds of millions of dollars in fictitious losses and improperly calculated claims.

Lawyers for victims of the worst offshore spill in U.S. history say BP is trying to renegotiate a settlement that is proving more costly than it originally envisioned.

Barbier agreed with the victims’ lawyers and blocked BP from making contradictory arguments in future court proceedings.

The case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

Empire State Building Investors Claim IPO Cost Them $410 Million

The Empire State Building’s managers were sued over claims they deprived thousands of early investors of as much as $410 million in profit when they took the New York skyscraper public as part of a group of properties.

The managers, Peter Malkin and his son Anthony, wrongfully turned down higher offers for the tower as a standalone property in favor of making it the centerpiece of a real estate investment trust, or REIT, that would drive up the value of 17 other buildings in the group, according to a proposed class-action lawsuit filed Dec. 24 in state court in Manhattan.

“The Malkins knew or had reason to know that these cash offers, if accepted, would derail the proposed REIT and eviscerate their opportunity to enjoy hundreds of millions of dollars of benefits for themselves,” Marc Postelnek, an investor in the lease-holder, said in the complaint.

Empire State Realty Trust Inc. (ESRT), whose properties include the Empire State Building, sold 71.5 million shares for $13 each on Oct. 1. The sale culminated an almost two-year quest by the Malkins to take the iconic skyscraper and 20 other New York-area properties public, a process marked by battles with some of the tower’s longtime investors.

The $13-a-share price valued the Empire State Building at $1.89 billion, or about $410 million less than the highest offer for the building before the IPO, according to the complaint.

From June to September 2013, as many as six real estate developers made unsolicited offers for the Empire State Building, with bids topping $2.3 billion, according to the complaint.

Thomas E.L. Dewey, an attorney representing the Malkins, didn’t immediately return a call seeking comment on the lawsuit.

Anthony Malkin is chief executive officer of the new publicly traded company and Peter Malkin is chairman.

New York Supreme Court Justice O. Peter Sherwood in New York in May approved a $55 million settlement of earlier lawsuits over the plan to take the trust public, allowing it to move forward. He earlier rejected a request by investors opposed to the settlement to intervene in the case, and denied a bid to declare the $100-a-share buyout provision illegal.

The dissidents had argued that the provision deprived them of their right to get fair value for their assets as members of Empire State Building Associates and therefore violated the state’s limited-liability law. In that case, Malkin claimed they weren’t members and weren’t entitled to those rights. Sherwood agreed with the Malkins, and declined to declare the buyout provision illegal.

The case is Postelnek v. Malkin, 654456/2013, Supreme Court of the State of New York (Manhattan).

Heirs of Alexander Calder Lose Fraud Lawsuit Against Art Dealer

Heirs of Alexander Calder, the American modernist who invented the moving sculpture known as the mobile, lost a $20 million fraud lawsuit against the estate of his longtime dealer, Klaus Perls.

Many claims in the case amounted to “an incoherent stew of irrelevance and innuendo,” and the evidence failed to show Perls wrongfully sold Calder works without the heirs’ knowledge, Justice Shirley Werner Kornreich said in a decision made public Dec. 24 in New York Supreme Court in Manhattan.

“All these allegations are so patently inadequate that the court can only conclude that they were brought solely for the purpose of harassment or embarrassment,” Kornreich said in the ruling, dismissing the case.

In the suit, filed in 2010, Perls and his estate were accused of creating a web of deceit dating back more than three decades to stash the proceeds of unauthorized art sales. Calder, whose works are in public and private collections around the world, died in 1976. Perls died in 2008.

“We are definitely appealing -- the defendants should not go to bed easily at night,” Aaron Richard Golub, the lawyer for Calder’s heirs, said yesterday in a phone interview. “The behavior of the Perlses was so contorted that it’s very hard to describe it in straightforward terms.”

The appeal will be filed within 30 days, he said.

“We are gratified by the court’s ruling, which upholds the integrity of Klaus Perls and his family,” the estate’s lawyer, Steven Wolfe of Eaton & Van Winkle LLP, said yesterday in a phone interview. The case “caused undue pain and distress,” he said.

The lawsuit was filed after Perls, his wife, Dolly, and employees of his gallery died, as well as the original executors of the artist’s estate, according to the ruling. The complaint also blamed the estate’s executor, Perls’s daughter Katherine.

“Plaintiffs are attempting to litigate issues that necessarily stretch back decades without any personal knowledge or contemporaneous records, where nearly all of the people who had personal knowledge of the facts of the case are dead,” Kornreich said in her ruling.

The case is Davidson v. Perls, 651760/2010, New York State Supreme Court, New York County (Manhattan).

For more, click here.

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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