These are hectic days for trusts and estates lawyers, as they make house calls, work nights and fly overseas to meet rich clients before Bush era tax cuts expire.
“To say we’re busy is the understatement of the year,” said Martin Kalb, chairman of the global tax group at Greenberg Traurig LLP. “I’ve been practicing for 35 years, and I’ve never seen it like this.”
Unless Congress and President Barack Obama decide otherwise, top rates for estate and gift taxes will rise to 55 percent from 35 percent on Jan. 1, with lifetime exemptions falling to $1 million per person from $5.12 million.
For bequests to non-spouses, an estate valued at less than $5 million won’t be taxed if the owner dies this year. Next year, the amount greater than $1 million will be taxed, as things stand now. Money and property in any amount left to a surviving spouse isn’t taxed.
Obama and House Speaker John Boehner have been meeting regularly in an effort to reach a compromise on taxes.
The president has repeatedly vowed he will insist on raising rates on the wealthy. As a result, many are scrambling to make gifts, either outright or through trusts, to spouses, children, grandchildren and others before the year ends.
“On Jan. 1 the coach will turn into a pumpkin,” said Gideon Rothschild of New York’s Moses & Singer LLP
Many people with more than $10 million of net worth had a wait-and-see attitude before the Nov. 6 election, because they thought Mitt Romney was likely to become president, said Dennis Belcher, a partner at McGuireWoods LLP in Richmond, Virginia.
“We are in effect squeezing two years of work into two months, notwithstanding the fact that we had contacted people and let them know what was going on,” Belcher said.
Those who waited may find it hard to hire lawyers because trust creation is time-intensive, involving counseling on their goals and finances, and not just generating documents.
Edward Koren, a partner at Holland & Knight LLP in Tampa, Florida, said in a telephone interview that three people who he didn’t know called him last week.
“I turned them all down,” he said. “I have to tolerate a failure to act by ongoing clients but not someone who calls out of the blue.”
Robert Lawrence of Cadwalader, Wickersham & Taft LLP, said, “We’re looking for relationships. This isn’t a one-off thing. A private client is unique because the lawyer becomes a counselor to the family.”
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Cleary, Skadden, Akin, Weil on Rosneft Deal With TNK-BP
OAO Rosneft, Russia’s biggest oil producer, moved closer to its $55 billion acquisition of the TNK-BP oil venture, signing a binding agreement to buy out BP Plc’s billionaire partners.
The consortium Alfa-Access-Renova (AAR), which represents the billionaires, will get $28 billion in cash on closing, Chief Executive Officer Stan Polovets said by phone. The deal is set to close in the first half of 2013, Rosneft and AAR said yesterday in a joint e-mailed statement.
Cleary Gottlieb Steen & Hamilton LLP is advising Rosneft on the AAR part of the Rosneft/TNK-BP transaction as well as the BP part, the firm said. The core Cleary Gottlieb team includes partners Russell Pollack and Daniel Braverman and associate Gabriele Antonazzo, who will be partner Jan. 1, on the corporate aspects. Partner Antoine Winckler is advising on antitrust matters, and partner Murat Akuyev on Russian law matters.
Skadden Arps Slate Meagher & Flom LLP is representing the consortium, the firm said. The Skadden team executing the sale was led by mergers and acquisitions partners Michal Berkner, Scott Simpson, Dmitri Kovalenko and Linda Davies. The banking aspects were advised on by partner Mark Darley; tax by partner Tim Sanders; and disputes by partner David Kavanagh. Partner Ingrid Vandenborre assisted from Brussels. Other corporate partners involved included Clive Rough.
Akin Gump Strauss Hauer & Feld LLP is advising longstanding client Renova, a private business group, as a member of AAR, the firm said.
The Akin Gump team advising Renova in relation to corporate and other aspects of the transaction is led by Moscow corporate and tax partner Ilya Rybalkin as well as London corporate partner Steven Blakeley.
Weil, Gotshal & Manges LLP advised a venture between Access Industries and Renova. Weil’s team was led by London private equity partner Marco Compagnoni and assisted by Simon Lyell.
The acquisition, the biggest in Russian history, will vault state-run Rosneft past Petrochina Co. to make it the largest publicly traded oil producer with more than 4 million barrels a day, based on third-quarter results.
Rosneft reached a final accord last month to buy BP’s half of the 50:50 venture for $17 billion in cash and a 12.8 percent stake in the Russian oil producer, also set to close in mid-2013. BP also agreed to buy Rosneft stock from the government.
BP said in June it was looking to sell its TNK-BP stake, dissolving a fractious decade-long relationship with AAR, which represents the interests of Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik. A shareholder battle in 2008 over control led to the ouster of Bob Dudley, now BP’s CEO, as head of TNK-BP. Last year, a planned alliance between the U.K. explorer and Rosneft collapsed under a legal challenge from AAR, which said the venture had the right to pursue new opportunities for BP in Russia.
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Shearman Advises Nasdaq on Thomson Reuters Services Units
Shearman & Sterling LLP advised Nasdaq OMX Group Inc. on its agreement to buy Thomson Reuters Corp. units that provide investor and public relations and multimedia services for $390 million in cash as the second-largest U.S. equity exchange seeks to diversify. Allen & Overy represents Thomson Reuters, with Peter Harwich acting as the lead partner.
The Shearman & Sterling team included partners John Marzulli and Guillaume Isautier, mergers and acquisitions; Doreen Lilienfeld, executive compensation and employee benefits; Richard Hsu, intellectual property transactions; Lisa Brill, real estate; and Larry Bambino, tax.
The deal is expected to close in the first half of 2013 and the divisions will be integrated into Nasdaq OMX’s Corporate Solutions business, the New York-based exchange said in a statement yesterday. The acquisition will probably add to earnings in the first 12 months, excluding transaction-related costs, Nasdaq OMX said.
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Boutique Greenlee Sullivan Joins Lathrop & Gage in Colorado
Colorado intellectual property boutique law firm Greenlee Sullivan PC’s is joining Lathrop & Gage LLP on Jan. 1, the two firms announced yesterday.
Greenlee Sullivan, now in its 25th year, provides IP prosecution, strategic analysis, due diligence and transaction counsel to high-tech clients, including start-ups, research universities and corporations.
Joining Lathrop & Gage are partners Sally Sullivan, Stephen Barone, Steven Penner, Susan Doughty and Gary Chapman, as well as two associates, three patent agents and support staff. They will move into Lathrop & Gage’s Boulder office, led by Curtis Vock.
Lathrop & Gage’s IP practice now has 88 attorneys and professionals, with 34 practicing in the firm’s two Colorado offices.
The Greenlee Sullivan team will work with Lathrop & Gage’s Boston office, opened in January, to expand the firm’s life sciences practice nationwide.
Lathrop & Gage has 320 attorneys in 11 U.S. offices.
Crowell & Moring Hires Manatt Phelps Former Chairman Cole
Crowell & Moring LLP announced that Christopher A. Cole, former advertising litigation practice chairman at Manatt, Phelps & Phillips LLP, has joined the firm as a partner in the advertising and product risk management group in Washington. Cole will co-head the group with Crowell & Moring partner Bridget E. Calhoun.
Cole has 20 years of experience advising clients on matters relating to advertising and media controversies, unfair competition, and green marketing claims, as well as compliance and risk prevention. He also handles the defense of class action litigation as it relates to false advertising and defends clients in federal enforcement proceedings before the Federal Trade Commission, state attorneys general, and other regulatory bodies, the firm said.
Crowell & Moring has approximately 500 lawyers at 11 U.S. and international offices.
Tax Partner Adam Joins Foley in Silicon Valley
Foley & Lardner LLP announced that Frederic J. Adam joined the firm’s tax and individual planning practice as a partner in its Silicon Valley office. Prior to joining Foley, Adam was a tax partner in the international corporate tax group of KPMG LLP.
Adam has more than 18 years of experience handling international tax matters for companies in a variety of industries including private equity, financial services, retail, pharmaceutical and life sciences. He has advised corporations and individuals on high-level international inbound and outbound tax planning and the various tax issues involved with mergers and acquisitions, post transaction integration services, the firm said.
Foley & Lardner has approximately 900 attorneys in 21 offices in the U.S., Europe and Asia.
Corporate Finance Partner Joins Patton Boggs in New York
Patton Boggs LLP hired Shawn Creedon, a corporate finance lawyer with almost 20 years of experience, as a partner in the firm’s corporate finance practice group in New York. He joins Patton Boggs from Silver Point Capital LP, where he was a senior analyst.
Creedon has experience with investment management and financial analysis, tax planning, accounting and auditing matters. He handles middle-market finance transactions, and has years of experience as manager of a nine-figure middle market debt portfolio, the firm said. He has represented lenders and borrowers in negotiating and documenting senior secured and unsecured credit facilities, including unitranche and bifurcated collateral structures, and in restructuring transactions associated with those financings. He has also represented global mezzanine lenders in mezzanine financings, ranging from $20mm to $300mm, and has served on the boards of nearly a dozen firms in his role as a senior investment analyst, according to a firm statement.
Patton Boggs has more than 600 lawyers at nine offices in the U.S. and Middle East.
Level Global Co-Founder’s Lawyer Says Prosecution Witness Lied
A defense lawyer for the Level Global Investors LP co-founder Anthony Chiasson told jurors the key government informant against his client is a liar whose testimony wasn’t supported by the evidence.
Steptoe & Johnson LLP partner Reid Weingarten, the attorney, argued that Spyridon “Sam” Adondakis, who once served as an analyst for Chiasson, lied to the fund manager, hid the fact that he was giving the portfolio manager nonpublic information and continued to lie on the witness stand when he testified for the prosecution.
“Sam Adondakis is a liar,” Weingarten said yesterday in his closing arguments. “Sam Adondakis will lie when it is in his interest. No doubt. You can’t get around that.”
Chiasson is on trial with former Diamondback Capital Management LLC portfolio manager Todd Newman, accused of reaping more than $70 million on trades based on illicit tips provided to him by analysts who worked for them. Both pleaded not guilty.
The case is U.S. v. Newman, 1:12-cr-00121, U.S. District Court, Southern District of New York (Manhattan).
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