Sutherland, Sullivan & Cromwell: Business of Law

Sheldon M. Kay, chief of appeals at the Internal Revenue Service, will return to Sutherland Asbill & Brennan LLP as a partner in the tax practice group on Sept. 1.

Kay will focus on tax controversy issues, including IRS procedures, dispute resolutions and tax litigation matters, the firm said. Kay was a partner in Sutherland’s tax practice before joining the IRS Appeals Office in 2011.

“Shelly’s professional experience is extraordinary, and we are pleased to welcome him back to the firm,” Sutherland managing partner Mark D. Wasserman said in a statement. “He possesses both the deep experience and government service that have long been hallmarks of Sutherland.”

Sutherland Asbill has 425 attorneys at seven offices in the U.S. and London.

Saul Ewing Adds Corporate Lawyer With Health and Tax Experience

Saul Ewing LLP announced that Glenn D. Fox joined the firm as a partner in the business and finance department and will be a member of the health, corporate and tax practices, in the Philadelphia office. He was previously at Schnader Harrison Segal & Lewis LLP.

He has experience representing business and nonprofit organizations, including senior living, long-term care and other health care providers, in corporate, transactional, tax and financial matters, the firm said.

“In addition to Glenn’s experience handling legal matters for health systems, health care providers and senior living entities, his strong background in counseling clients on mergers and acquisitions, restructurings and related financial deals will greatly augment the suite of business services we offer our clients,” Barry F. Levin, chair of the business and finance department said in a statement.

Saul Ewing has more than 250 lawyers in 11 East Coast U.S. offices.

Davis Wright Hires Technology Partner Seattle

Wendy Kearns, a lawyer who ran her own boutique technology firm, joined the technology transactional and M&A practice at Davis Wright Tremaine LLP in Seattle.

Kearns has handled licensing and technology transactions matters as well as has experience with cloud services agreements, video game industry agreements, marketing and advertising agreements, and university intellectual property transactions, the firm said.

Davis Wright has approximately 500 lawyers in the U.S. and Shanghai.


S&C Advises PacWest on $2.3 Billion CapitalSource Purchase

Sullivan & Cromwell LLP advised PacWest Bancorp, which agreed to purchase CapitalSource Inc. in a deal valued at about $2.3 billion, to create the eighth-largest commercial bank based in California. Wachtell Lipton Rosen & Katz was legal counsel for CapitalSource.

The S&C team includes partners Patrick Brown, corporate; Matt Friestedt, employee benefits; and Ron Creamer, tax.

Wachtell’s team was led by corporate partners Edward D. Herlihy and Matthew M. Guest. Additional partners working on the deal included: Richard K. Kim, corporate; Jeannemarie O’Brien, executive compensation and benefits; and Joshua M. Holmes, tax.

CapitalSource investors will get about $11.64 in PacWest stock and cash, 18 percent more than yesterday’s closing price, the Los Angeles-based companies said in a statement. Each CapitalSource share will be exchanged for 0.2837 PacWest share and $2.47 in cash, according to the statement.

The combined bank would have about $15.4 billion in assets, with 96 branches in California, the most populous U.S. state, according to yesterday’s statement. PacWest Chief Executive Officer Matt Wagner will lead the combined firm and James Pieczynski, CEO of the target company, will run the CapitalSource unit.

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Firm News

Nixon Peabody Names Doran Tax Credit Finance Head

Gregory N. Doran, a Washington partner at Nixon Peabody LLP, was named head of the tax credit finance and syndication practice.

“We partner with our clients to shape tomorrow’s tax credit transactions. To make these projects a reality, clients need to align the complex and sometimes contradictory funding layers so that the deal will close and investments are safe,” Doran said in a statement. “Whether it’s energy, historic, housing or new markets tax credits, no firm has a deeper bench of well-connected industry experts.”

Doran, who has experience working for the Internal Revenue Service, concentrates his practice on transactions involving the New Markets Tax Credit. He also advises clients on transactions related to historic preservation and other federal and state programs designed to promote development in underserved markets, the firm said.

Doran succeeds Jeffrey S. Lesk, who expanded the practice from its focus on housing to include historic, new markets, energy and housing tax credits. Lesk, managing partner of the Nixon Peabody’s Washington office, will continue handling tax credit finance and syndication matters.


Tourre Calls Message a ‘Silly, Romantic E-Mail’ to Girlfriend

Fabrice Tourre, the former Goldman Sachs Group Inc. vice president facing civil fraud claims over a $1 billion mortgage bond debacle, said yesterday an e-mail he sent to his girlfriend was “silly” and “romantic” and that he didn’t create any “monstrosities.”

His e-mails are at the center of a case that alleges Tourre misled clients on a 2007 mortgage-backed investment that lost a group of investors about $1 billion when the housing market crashed.

Tourre is testifying near the end of two weeks of evidence against him brought by the U.S. Securities and Exchange Commission. The agency’s lawyers are trying to show Tourre misled investors about the role of Paulson & Co., the hedge fund run by John Paulson, in helping select the assets behind the investment, which the fund then bet against. Tourre took the stand after Laura Schwartz, a participant in the deal and a key SEC witness against Tourre.

Earlier in the trial both the prosecution and defense addressed a January 2007 e-mail from Tourre to his girlfriend, which included the “Fabulous” nickname that’s stuck to him since it became public. SEC lawyer Matthew Martens said the e-mail shows Tourre knew what he was doing was wrong. Tourre’s lawyer, Pamela Chepiga, of  Allen & Overy LLP, called it “an old-fashioned love letter” that has nothing to do with the issues in the case.

“What this e-mail expresses is the self-doubt of a young man, about whom there is nothing fabulous, struggling in a financial world that is uncertain and going through uncertain times,” Chepiga told jurors.

In the e-mail, Tourre alternated between English and French, writing: “More and more leverage in the system, the whole building is about to collapse anytime now ... Only potential survivor, the fabulous Fab ... standing in the middle of all these complex, highly levered, exotic trades he created without necessarily understanding all the implications of those monstruosities!!!”

The case is SEC v. Tourre, 10-cv-03229, U.S. District Court, Southern District of New York (Manhattan).

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SAC Pursuit of ‘Edge’ Led to Criminality, Bharara Says

Manhattan U.S. Attorney Preet Bharara and George Venizelos, assistant director in charge of the FBI’s New York field office, speak about an indictment alleging SAC Capital Advisors LP perpetrated an unprecedented insider trading scheme.

The hedge fund founded by Steven A. Cohen was charged with four counts of securities fraud and one count of wire fraud in an indictment unsealed in Manhattan federal court. Bharara and Venizelos speak at a news conference in New York.

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