Sullivan & Cromwell Has ‘Unusual’ CIT Deal Role: Business of LawEllen Rosen
Three mergers and acquisitions powerhouses -- Cleary Gottlieb Steen & Hamilton LLP, Wachtell, Lipton, Rosen & Katz and Sullivan & Cromwell LLP -- worked on CIT Group Inc.’s proposed $3.4 billion acquisition of OneWest Bank parent IMB Holdco LLC.
While Wachtell represented CIT, the commercial lender led by John A. Thain, and Cleary represented OneWest, Sullivan & Cromwell provided additional regulatory counsel for both parties because of its banking expertise.
S&C’s Rodgin Cohen said in a telephone interview yesterday that the dual representation was “unusual, but we know both organizations and in a transaction like this, the two parties have a common interest to get the deal approved as soon as possible by the regulators,” including the Federal Reserve and the Comptroller of the Currency.
The deal was previewed with the Federal Reserve, Cohen said, because “the Fed has made it very clear that any deal of significance is to be discussed before it is announced.” He added that the Federal Reserve doesn’t “give any pre-clearance” and so approval, which rests on issues like the financial stability of the combined companies, “could take from six to nine months.”
The Wachtell team representing CIT were corporate partners Edward Herlihy and David Karp, regulatory counsel Richard Kim, executive compensation and benefits partner Jeannemarie O’Brien and tax partner Joshua Holmes.
On the Cleary team representing IMB and OneWest were M&A partners Christopher Austin and Benet O’Reilly, along with banking regulatory partner Katherine Mooney Carroll, employee benefits partner Arthur Kohn and tax partner Yaron Reich.
S&C partners Mitchell Eitel and Camille Orme worked on the deal in addition to Cohen.
Under the terms of the deal, IMB Holdco shareholders will receive $2 billion in cash and 31.3 million shares of CIT common stock, New York-based CIT said yesterday in a statement.
Empire State Building Managers Win Dismissal of Investor Suits
The Empire State Building’s managers won dismissal of lawsuits claiming they deprived thousands of early investors of as much as $410 million in profit when the iconic New York skyscraper was taken public.
New York State Supreme Court Justice O. Peter Sherwood threw out the lawsuits, saying the investors agreed not to sue the managers, Peter Malkin and his son Anthony, in settling a related case for $55 million last year. Sherwood issued the ruling July 17 and it was made public on Monday.
The investors argued in their suit, which was filed in December, that the Malkins wrongfully turned down higher offers for the skyscraper by itself in order to drive up the value of 17 other Malkin-owned buildings by making the Empire State Building the centerpiece of a real estate investment trust.
The settlement didn’t release their claims because the offers were made after the pact was effective, according to the complaint. Sherwood said the Malkins’s alleged refusal to consider alternatives was a “core element” of the suit that was settled.
Empire State Realty Trust Inc., whose properties include the skyscraper, 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 skyscraper and 20 other New York-area properties public, a process marked by battles with longtime investors.
The case is Postelnek v. Malkin, 654456/2013, Supreme Court of the State of New York (Manhattan).
Argentina Bond Judge Orders Talks in Effort to Avoid Default
The judge overseeing a battle between Argentina and holders of its defaulted debt ordered both sides into “continuous” negotiations to avoid a default in eight days.
U.S. District Judge Thomas Griesa in Manhattan on July 21 rejected arguments by a lawyer for Argentina who warned of “a very imminent risk of default” unless his order, that defaulted bondholders must be paid at the same time as holders of its restructured debt, is temporarily suspended.
“I expect the parties and their lawyers to work really continuously,” Griesa told attorneys in his packed courtroom. “There is not a lot of time.”
Griesa ordered both sides to meet with a court-appointed mediator to avoid a default by South America’s second-biggest economy, after Brazil. A default would likely deepen the current recession, fuel inflation and prompt a sell off in the peso, Claudio Loser, a former International Monetary Fund director, said July 18. The mediator, New York lawyer Daniel Pollack, scheduled a meeting for this morning.
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Law Firm Moves
Lateral Moves at Munger Tolles, Gibson Dunn, Cozen O’Connor
Benjamin Horwich, who was assistant to the solicitor general at the U.S. Justice Department, joined Munger, Tolles & Olson LLP as of counsel. He will be based in the firm’s San Francisco office and will focus on complex litigation and appeals.
Before joining the office of the solicitor general in 2009, Horwich was a litigator at Latham & Watkins LLP; he also clerked for U.S. Supreme Court Justices Samuel A. Alito and Sandra Day O’Connor.
Richard Birns has joined Gibson, Dunn & Crutcher LLP as a partner in its New York office. Previously with Boies, Schiller & Flexner LLP, Birns is a corporate lawyer who focuses on mergers and acquisitions, joint ventures and private-equity transactions.
Birns said in a statement that it “was a difficult decision to leave Boies Schiller, and I will always cherish my time there, but I am excited to be joining Gibson Dunn’s robust platform.”
Ingrid Welch has joined Cozen O’Connor as a partner. She specializes in private equity and real estate and previously was the Philadelphia managing partner of Jaffe Raitt Heuer & Weiss PC.