Bloomberg News

Greenberg, Morrison, Kirkland, Mayer: Business of Law

May 15, 2012

Greenberg Traurig LLP said yesterday that it has opened an office in Warsaw with a team of more than 50 lawyers formerly with Dewey & LeBoeuf LLP. The firm will operate as Greenberg Traurig Grzesiak in Poland. Jaroslaw Grzesiak, former managing partner of Dewey’s Warsaw office, serves as the managing partner and Lejb Fogelman as the senior partner.

The firm has also added Frank R. Adams from Dewey, who will be in the London and New York offices. Adams was a member of Dewey’s executive committee and the former global chairman of Dewey’s corporate finance practice, most recently focused on its Europe, Middle East and Africa regions, the firm said in a statement.

Also joining in Warsaw and London is Federico Salinas, a U.S. and English law qualified partner from Dewey’s London office. Salinas is widely experienced in emerging markets and was a founder of Dewey’s Dubai office. He also led Dewey’s Turkey practice and has experience in international capital markets, mergers and acquisitions, and private equity transactions, the firm said.

Grzesiak said the Poland office was approached by many firms but chose Greenberg Traurig because “we share many of the same values -- quality, strength, spirit and clarity of vision.”

The Poland office is Greenberg’s 35th, and its first office in Eastern Europe. The firm had approximately 1,800 attorneys with offices in the U.S., Latin America, Europe, the Middle East and Asia.

Vinson & Elkins Opens San Francisco Office With Six Lawyers

Vinson & Elkins LLP is opening a new office in San Francisco, with a focus on white-collar, antitrust and complex commercial litigation matters, as well as intellectual property law.

Litigation partner Matthew Jacobs, a former federal prosecutor, will reside in the San Francisco office along with five attorneys. The firm expects to add more lawyers through lateral hires.

The new office comes two years after the firm opened a Palo Alto office to focus on clean energy, venture capital and intellectual property matters.

“Since Vinson & Elkins has long had a national litigation and IP practice, it made sense strategically to have an office in San Francisco,” said T. Mark Kelly, chairman of V&E. “Opening in San Francisco bolsters our strong Palo Alto office and gives us a larger Northern California presence.”

The San Francisco office is V&E’s sixteenth. The firm has over 700 lawyers across 16 offices joining six domestic and nine international offices.

Deals

Morrison & Foerster Handles Ally’s ResCap Unit Bankruptcy

Residential Capital LLC, the unprofitable mortgage company whose parent Ally Financial Inc. (ALLY:US) is trying to repay a U.S. government bailout, filed for bankruptcy and plans to sell most of its assets to Fortress Investment Group LLC. (FIG:US)

Morrison & Foerster LLP is the law firm handling the bankruptcy case. The team is led by New York capital markets partner James Tanenbaum and bankruptcy and restructuring partner Larren Nashelsky.

Ally is represented by Kirkland & Ellis, LLP. Rick Cieri, Ray Schrock and Stephen Hessler are the partners for Kirkland.

ResCap listed assets of $15.7 billion and debt of $15.3 billion in a petition filed yesterday in U.S. Bankruptcy Court in Manhattan. ResCap’s Chapter 11 filing is the biggest so far this year, based on liabilities, according to data compiled by Bloomberg.

“The action by ResCap will enable Ally to achieve a permanent solution to its legacy mortgage risks and put these issues behind us,” Ally Chief Executive Officer Michael A. Carpenter said yesterday in a statement. Ally said it also may sell its international auto-finance and insurance operations to help repay a $17.2 billion U.S. bailout.

Ally, a Detroit-based bank that specializes in car loans, is 74 percent-owned by the U.S. Treasury after receiving the bailout. In 2010, the Treasury failed to find a buyer for ResCap, which originates and services residential mortgages. Carpenter had said an initial public offering for Ally wouldn’t happen without progress on a resolution for ResCap.

ResCap’s board voted to declare bankruptcy and arrange a sale to Fortress and Nationstar Mortgage Holdings Inc. for about $2.3 billion, ResCap Chairman and CEO Thomas Marano, 50, said in an interview. Nationstar, which is majority-owned by Fortress, will buy a portfolio of servicing assets, as well as a mortgage- origination unit, and business will continue uninterrupted, he said. Mortgage servicers handle billing, collection and foreclosures.

Ally agreed to pay $750 million to ResCap to settle any claims against the parent company, purchase as much as $1.6 billion of securities if others don’t, and provide $150 million to help finance ResCap’s operations during bankruptcy, according to a statement. Barclays Plc (BARC) will provide $1.45 billion in financing to ResCap while the company is under court protection, Marano said.

Skadden Arps Slate Meagher & Flom LLP is representing Barclays Bank, the firm said. Skadden New York partners include Sarah Ward, banking group; Ken Ziman, corporate restructuring; Richard Kadlick, structured finance; and David Ingles, financial institutions.

In the weeks leading up to the filing, ResCap negotiated with bondholders (ALLY:US) in an effort to create a so-called prepackaged bankruptcy. When a majority of creditors who hold about two- thirds of the amount of a company’s debt vote to support a reorganization plan, the bankruptcy is considered prepackaged and can win court approval quicker than normal.

ResCap’s plan has support from 37 percent of junior secured creditors, according to court papers, below the threshold needed for a prepackaged bankruptcy. Under the U.S. Bankruptcy Code, creditors holding more than one-third of any single class of ResCap’s debt can block the company’s reorganization proposal by voting against it.

A group of 17 institutional investors reached an agreement that will give them an $8.7 billion allowed claim related to 392 residential mortgage-backed securities trusts issued by ResCap affiliates from 2004 to 2008, according to a statement from Gibbs & Bruns LLP, a law firm representing the investors with Ropes & Gray LLP.

A separate group of investors represented by law firm Talcott Franklin PC also agreed to settle their claims against ResCap over mortgage-backed securities sponsored by the company. The firm will recommend that all of its clients with MBS claims against ResCap settle with the bankrupt company, Talcott Franklin said in a statement yesterday.

ResCap has a preliminary agreement with a bondholder group represented by White & Case LLP and is negotiating with other claimants. Gerard Uzzi, a partner in White & Case’s financial restructuring and insolvency practice is representing the group, the firm said.

The bankruptcy plan received conditional approval from the Treasury, an Obama administration official said in early May. The U.S. concluded that addressing ResCap’s mortgage losses would put taxpayers in a better position to recoup their investment in Ally, according to the official.

The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

For more, click here.

Moves

Former Dewey Partners Join Mayer Brown, Pillsbury, Paul Hastings

Former California Attorney General John Van de Kamp joined Mayer Brown LLP’s Los Angeles office as counsel in the government and global trade practice. Previously, he was of counsel with Dewey & LeBoeuf LLP in Los Angeles and one of at least nine lawyers that left the beleaguered firm yesterday for other firms including Pillsbury Winthrop Shaw Pittman LLP and Paul Hastings LLP.

Van de Kamp served as California Attorney General from 1983 until 1991, after which he went into private practice at Dewey Ballantine, the firm that merged with LeBoeuf Lamb Greene & MacRae in 2007 to form Dewey.

Van de Kamp’s hire makes him one of two former state attorneys general at Mayer Brown. The other is partner and former Mayer Brown Chairman Tyrone C. Fahner.

Pillsbury announced that Peter A. Baumgaertner has joined the firm’s New York corporate and securities practice section as a partner with a broad, international practice spanning capital markets, infrastructure projects, commercial lending and securities.

Litigator Ellen M. Dunn joined Sutherland Asbill & Brennan LLP’s New York office. She was previously co-head of Dewey’s U.S. litigation practice, the firm said. She has experience representing life and property casualty insurers in litigation, regulatory investigations, administrative hearings and compliance matters.

Baumgaertner will work with colleagues and clients across Pillsbury’s offices in London, New York, the Middle East and Asia. His hire continues Pillsbury’s expansion around energy, communications, transportation and other infrastructure project work, the firm said.

Litigator Alan B. Howard joined Crowell & Moring LLP, the firm said in a statement.

Michael Fitzgerald, co-chairman of Dewey’s corporate finance group and chairman of its Latin America practice, moved to Paul Hastings with three other lawyers, the Wall Street Journal reported yesterday. Taisa Markus, Joy Gallup and Arturo Carrillo are joining Fitzgerald in the corporate department of Paul Hastings’ New York office, Allan Whitescarver, spokesman for Paul Hastings confirmed. He said there will be a more formal announcement later this week.

Dewey is a shell of what was once the 11th-largest U.S. law firm. More than half the partners have bolted the firm, and 450 employees were fired last week.

Martin Bienenstock, former bankruptcy partner and managing chairman of Dewey, told the Wall Street Journal the firm is winding down but not planning to file for Chapter 11 bankruptcy.

Crowell & Moring Adds Two Litigation Partners in New York

Crowell & Moring LLP added two litigation partners to its New York office. Edwin M. Baum, whose practice is concentrated on representing business clients in multifaceted commercial litigation, joined the firm from Proskauer Rose LLP. Alan B. Howard, a litigator and trial lawyer who has experience handling domestic and international litigation and arbitration cases, arrives from Dewey & LeBoeuf LLP.

Baum, the former practice group leader of Proskauer Rose’s product liability and consumer litigation practice, has experience counseling clients through matters requiring in-depth knowledge of multiple substantive disciplines including financial services, insurance, product liability, professional liability, unfair competition, theft of trade secrets, and employment, the firm said in a statement.

Baum regularly serves as counsel for clients facing class actions, governmental investigations and litigations, or other complex matters requiring expertise in multiple disciplines. He frequently counsels clients in transactional matters and business planning, on assessing potential liabilities, and in developing action plans to prevent or minimize litigation risks, the firm said.

“They are both highly seasoned trial lawyers with experience handling big-ticket matters for some of the world’s largest corporations. As we continue to deepen the firm’s national litigation bench, they are terrific additions to our team in New York,” Kathleen Taylor Sooy, national chairwoman of Crowell & Moring’s litigation group, said in a statement.

Crowell & Moring has approximately 500 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm has offices in Washington, New York, Los Angeles, San Francisco, London, Brussels, Orange County, California and Anchorage, Alaska.

Duane Morris Adds Partner, Expanding Private Equity Practice

Duane Morris LLP announced that Piero Carbone joined the firm’s corporate practice group as a partner in London. He was previously at Kirkland & Ellis LLP.

Carbone focuses his practice on cross-border corporate transactions, particularly in the area of private equity. He mainly advises private equity firms on a variety of transactions, including venture investments; buy-and-build transactions; mid-market and large leveraged buyouts; and public-to-privates, the firm said.

Carbone will expand Duane Morris’ private equity group to Europe. The firm already has practices in the U.S. and in Asia. Duane Morris has more than 700 attorneys in the U.S., Europe and Asia.

Trials

Servier, Founder Fight Drug-Death Cover-Up Claims at Trial

Les Laboratoires Servier and its founder will fight charges they hid the risks of a diabetes drug suspected of causing as many as 2,000 deaths as they go on trial for private claims by victims unwilling to wait on a criminal investigation.

Jacques Servier, 90, and France’s second-largest drugmaker challenged claims they failed to disclose the risks posed by the withdrawn drug at a trial that began yesterday in Nanterre. The executive and company are under investigation by specialized health judges in nearby Paris over similar claims, their lawyer said. They are seeking to have the case referred to a higher court for a ruling on whether Servier can be tried in a private prosecution while the criminal probe is pending.

“We are under investigation for exactly the same things that are essentially what is before you now,” Herve Temime, Servier’s lawyer, told Judge Isabelle Prevost-Deprez at yesterday’s hearing. “It is unthinkable not only for us, but for all defendants -- it is the end of the very idea of equal justice.”

Mediator, the drug at the center of the case, was pulled from the market after 33 years in November 2009 over concerns it caused heart-valve damage. The move sparked an overhaul of how France’s drug industry is regulated. More than 600 people joined the private prosecution at the Nanterre court to speed up their cases, while others have opted to wait on the criminal investigation in Paris.

Temime’s challenge could postpone the trial, should judges agree to refer the issue for consideration by a higher court. The Paris investigation is expected to conclude this year, the prosecutors’ office has said.

Servier “refutes all accusations of hiding any evidence of risk” during the authorization process and in terms of secondary effects, Lucy Vincent, a company spokeswoman, said before the hearing. “We have a lot of difficulty in recognizing our company in the one that is described.”

For more, click here.

To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, at eamon2@bloomberg.net.

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


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Companies Mentioned

  • ALLY
    (Ally Financial Inc)
    • $23.99 USD
    • 0.12
    • 0.5%
  • FIG
    (Fortress Investment Group LLC)
    • $7.91 USD
    • 0.02
    • 0.25%
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