The decade of mergers that has left the U.S. with four major airlines has stuck regulators with the question of how to rein in behavior that may amount to collusion.
Bill Baer, the head of the Justice Department’s antitrust division, tried to tamp down questionable practices two years ago by requiring terms aimed at fueling competition by low-fare carriers. Now he says a bigger fix may be needed. His antitrust unit is examining the entire industry for signs of improper cooperation, taking on the cozy behavior between airlines that he once warned about.
Troubling signs have been mounting: e-mails between airline chief executives uncovered in the last merger review, an industry conference where airline officials promised “discipline” on seating capacity, and questions about communications with industry analysts, all on top of past allegations of coordinated behavior.
“In my experience looking at markets with just a few players, sometimes there is a temptation to coordinate behavior,” Baer told Bloomberg News on Tuesday. “It’s a pretty good idea to resist that temptation.”
The Justice Department is investigating whether airlines are discussing how to control the supply of seats, a crucial factor in determining fares. Investigators are seeking information about conversations, meetings and conferences where industry capacity was discussed. Baer declined to comment on the investigation.
The four largest U.S. carriers -- American Airlines Group Inc., Delta Air Lines Inc., United Continental Holdings Inc. and Southwest Airlines Co. -- each pledged to cooperate with the Justice Department’s review.
In Baer’s view, industries that are consolidating with multiple deals at a time should be examined holistically. In the rapidly consolidating health-care sector, that could force health insurers now weighing takeovers to address how deals may affect consumers.
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London Woos Oligarchs and Banks With Hub for Big-Money Lawsuits
London is revamping its court structure in a bid to cement its role as the place for Russian oligarchs, global banks and corporate giants to thrash out big-ticket legal disputes.
The plan will bring together cases involving financial claims valued at 50 million pounds ($77.3 million) or more, John Thomas, the top judge in England and Wales, said in a speech at London’s Mansion House last week. The new service will examine complex cases involving financial markets, Bloomberg News reports.
“For the first time we will have judges focused on financial disputes who would have heard the case from start to finish, saving time and money,” said Ian McDonald, head of the London commercial dispute resolution practice of Chicago-based law firm Mayer Brown LLP.
Under the system, judges from the Commercial Court of the Queen’s Bench Division and the Chancery Division -- both parts of the High Court -- would hear cases from a shared list dedicated to financial litigation.
London has been a magnet for legal tussles between non-U.K. parties. High-profile cases in recent years include a clash between Russian oligarchs Roman Abramovich and the late Boris Berezovsky, a Norwegian investor suing Deutsche Bank AG and a dispute between a German water utility and UBS Group AG.
More than 75 percent of litigants using the Commercial Court in London between April 2013 and March 2014 were foreign nationals, according to public relations firm Portland.
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Cerberus Fees Sparks Row as Law Firm Fights Ex-Managing Partner
A Northern Irish law firm disputed its former managing partner’s account of how fees linked to one of the biggest deals in the province’s history ended up in his own bank account, as police and lawmakers prepared to investigate the controversy.
Cerberus Capital Management LP paid the fees to Brown Rudnick LLP, its main legal adviser, which in turn paid Belfast-based Tughans 7.5 million pounds ($11.7 million) for work on the acquisition of loans from Ireland’s so-called bad bank, the National Asset Management Agency.
Ian Coulter, former managing partner of Tughans, said that he had directed the company’s finance director to move some of the fees into an account controlled by him because of a “complex, commercially and legally sensitive issue” that he’d explained to his fellow partners. Coulter said he had transferred the money back to Tughans in December 2014 and had alerted the company of this.
Tughans “strongly disagrees with his version of events surrounding the treatment, discovery and retrieval of the professional fees and his exit from the practice,” it said in a statement on Wednesday.
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Lateral Moves at Rimon, Steptoe & Johnson and Jackson Lewis
Jill Berliner, an entertainment attorney, has joined Rimon Law as a partner in Los Angeles. She was previously a partner at King, Holmes, Paterno & Berliner, which will now be known as King, Holmes, & Paterno.
Berliner’s clients, according to a statement from the firm, include musical artists as well as record and publishing companies, songwriters, managers, producers and production companies and filmmakers.
Steptoe & Johnson LLP has added two attorneys to its ranks in New York.
Former MeadWestvaco General Counsel Wendell L. Willkie II joined the firm as of counsel in its New York office. Willkie was senior vice president, general counsel and secretary of MeadWestvaco until the company’s merger on July 1 with RockTenn to become WestRock, a global packaging company.
In addition, Charles Michael joined the firm as a partner in the complex commercial disputes group in New York. Michael, who was previously a partner at Brune & Richard, focuses on commercial litigation matters as well as regulatory and criminal investigations.
Jackson Lewis P.C. added several attorneys in three offices.
Gary Pappas and Meredith Stewart joined the firm’s Boston office. They were previously principals in the boutique Boston immigration firm of Pappas, Lenzo & Stewart LLP. Stewart is joining as shareholder while Pappas is joining as of counsel.
In Cleveland, Suellen Oswald, who was previously a shareholder at Littler Mendelson, and Patrick Peters, who was previously a partner with Benesch, Friedlander, Coplan & Aronoff LLP, are joining as shareholders. Oswald focuses on labor law, employment litigation and staffing and contingent workers, while Peters focuses on hiring, promotion, discipline and termination decisions and also negotiates executive employment agreements among other matters.
In Salt Lake City, the firm hired Rick Sutherland as a shareholder. Sutherland, who previously practiced at Jones Waldo Holbrook & McDonough PC, represents management in union matters including organizing, collective bargaining and dispute resolution.