Apple Inc. (AAPL:US), advised by Weil Gotshal & Manges LLP, agreed to buy AuthenTec Inc. (AUTH:US) for about $350 million, deploying some of its $117.2 billion cash hoard to gain fingerprint-authentication and encryption security technology for the iPad and iPhone. Alston & Bird LLP represented AuthenTec.
Weil’s team included Silicon Valley mergers and acquisitions partner Kyle Krpata, New York M&A partner Howard Chatzinoff, Silicon Valley technology and IP transactions partner Karen Ballack, New York technology and IP transactions partner Charan Sandhu and Silicon Valley technology and IP transactions partner Jason Kipnis.
Alston & Bird’s lead partners for the deal are Scott Ortwein and Justin Howard.
Apple is paying $8 a share, Melbourne, Florida-based AuthenTec said July 27 in a filing. The transaction represents a premium of 58 percent over AuthenTec’s closing share price July 26. Under the agreement, Apple also has the right to pay patent licenses totaling as much as $115 million.
AuthenTec makes fingerprint sensors that corporations use to secure access to computer networks, technology that it has been expanding for use on smartphones and tablets. Apple is stepping up efforts to demonstrate its devices are safe from malware and other threats as the iPhone and iPad gain popularity with business customers.
Samsung Electronics Co., which less than two weeks ago said it would start using AuthenTec technology in new smartphones and tablets, might consider bidding, said Richard Shannon, an analyst at Craig-Hallum Capital Group, who has a buy rating on AuthenTec’s shares. Like Apple, Samsung may need to upgrade security features on its devices, he said.
AuthenTec’s other customers include Nokia Oyj (NOK1V), Cisco Systems Inc., and Texas Instruments Inc. (TXN:US), according to the company’s website.
The deal, which still requires the approval of shareholders and regulators, is expected to close in the third quarter of this year, according to the filing. AuthenTec would pay Apple a breakup fee of $10.95 million if it accepts a superior proposal.
Adding AuthenTec’s technology will help Apple increase sales to businesses, whose information-technology departments require more security capabilities than consumers using the devices for personal use, said Krishnamurthy.
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White & Case Loses Two New York Bankruptcy Partners
Two White & Case LLP New York bankruptcy partners left for other firms last week. Gerard Uzzi moved to Milbank, Tweed, Hadley & McCloy LLP’s financial restructuring group and Evan Hollander joined Arnold & Porter LLP’s bankruptcy and corporate restructuring practice.
Uzzi, who has advised the Paulson-Calpers group and ResCap’s bondholder group, advises debtors, creditors and acquirers on large and complex bankruptcies.
Hollander, who focuses his practice on advising domestic and non-U.S. clients in insolvency proceedings and financial restructuring matters as well as counseling parties on acquiring the assets of troubled companies, and structuring commercial transactions to reduce or eliminate risk, has handled matters for BNP Paribas, Credit Agricole and Deutsche Bank, his new firm said in a statement.
Milbank has more than 500 lawyers in 11 offices in the U.S., Europe, Asia and Brazil. The firm’s restructuring group has been involved in high profile cases, including most recently its nearly four-year representation of the Official Committee of Unsecured Creditors in the Lehman Brothers’ bankruptcy and the Official Committee of Unsecured Creditors in both Eastman Kodak and Arcapita Bank, the Bahrain-based private equity sponsor. Milbank is also acting as the debtor’s counsel to the satellite wireless-telecom carrier LightSquared, which filed for bankruptcy protection in May.
“Jerry will add strength, depth and experience to our group,” Dennis Dunne, co-chair of Milbank’s financial restructuring group said in a statement. “He is known for crafting creative and commercial solutions to difficult and multifaceted cases.”
Arnold & Porter has more than 800 lawyers with nine offices in the U.S. and London.
The firm’s recent bankruptcy matters have included the representation of the Chrysler National Dealer Council in Chrysler’s Chapter 11 case, Quebecor World (USA) Inc. and 52 of its affiliated entities in their reorganization, and Northwest Airlines as special counsel in its bankruptcy case.
“Evan’s deep experience in both litigation and transactional restructuring matters complements our existing expertise in a very important field for us,” said Thomas Milch, Arnold & Porter’s chairman. “He also provides further depth to our busy New York bankruptcy team.”
White & Case declined to comment on the departures. The firm’s financial restructuring and insolvency practice has recently represented three Indiana state pension and construction funds in the Chrysler Chapter 11 case. The firm also represented an ad hoc group of lenders that held a majority of the $870 million of outstanding Six Flags, Inc. notes, according to its website.
Mintz Levin Expands International IP Litigation Practice
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, (1367L:US) hired Michael Renaud, James Wodarski and Michael McNamara, as members in the firm’s intellectual property section in Boston. Joining them are a group of at least six associates who will also be practicing in the firm’s intellectual property section. The group comes from Pepper Hamilton LLP, the firm said.
“IP has long been one of Mintz Levin’s core strengths,” said Robert I. Bodian, managing member of Mintz Levin. “This talented group of attorneys will further enhance our ability to serve our clients’ intellectual property needs and reinforces Mintz Levin’s reputation as a go-to firm in this area.”
A former Mintz Levin member, Renaud specializes in patent litigation at both the International Trade Commission and U.S. district courts, and appeals to the Court of Appeals for the Federal Circuit.
Wodarski, also a former Mintz Levin member, focuses on patent and trademark litigation, representing high tech and life sciences companies throughout the country. He also specializes in the defense of pharmaceutical and medical device manufacturers in product liability actions.
McNamara’s practice focuses on intellectual property litigation, with an emphasis on patents relating to electrical systems, solid state devices, optical systems, semiconductor fabrication, computers, communication networks and software. He advises clients in all phases of litigation, from initial counseling through trial and appeal.
Pepper Hamilton didn’t respond to an e-mail seeking comment on the departures.
Mintz Levin has 500 lawyers in 8 offices in the U.S. and London.
Whitman Trial to Turn on Whether He Knew of Illicit Inside Leaks
Whitman Capital LLC founder Doug Whitman, facing an insider-trading trial this week in New York, is accused of using illicit information from a network of sources to make $900,000 for his hedge fund.
The insiders included two employees of chipmaker Marvell Technology Group Ltd. (MRVL:US) who supplied tips to a consultant whose firm Whitman paid, according to prosecutors in the office of Manhattan U.S. Attorney Preet Bharara. Whitman is also accused of getting inside tips from a former Intel Corp. (INTC:US) executive who twice pleaded guilty to insider-trading charges, including passing tips to Galleon Group LLC co-founder Raj Rajaratnam.
“There is no allegation that Mr. Whitman provided payoffs or any other benefits to any insiders for inside information,” his lawyer David Anderson, of Sidley Austin LLP, said in an interview. “He’s been following these companies for as long as they have existed as a well-regarded research analyst in Silicon Valley.”
Whitman’s lawyers said there’s no proof he knew he was getting illicit information from his sources, and U.S. District Judge Jed Rakoff, who is presiding over the trial, has said the burden is on the prosecution to prove Whitman traded on information he knew wasn’t public.
Whitman is charged with two counts of conspiracy and two counts of securities fraud. The most serious charge carries a maximum 20-year prison sentence.
The U.S. alleges that Whitman obtained tips through an intermediary about Santa Clara, California-based Marvell from Sam Miri, a former employee at the chipmaker, and Bill Brennan, who was a Marvell vice president of sales.
“Miri and Brennan were sources of material, nonpublic information at Marvell Technology Group from approximately late 2007 through early 2009,” assistant U.S. attorneys Chris LaVigne and Jillian Berman said in a letter to Whitman’s lawyers made public this month. Neither Miri nor Brennan has been charged with criminal wrongdoing, according to court records.
Prosecutors identified Whitman’s intermediary as Karl Motey, an independent consultant who pleaded guilty to insider- trading charges and is cooperating with the U.S. Motey was a key witness against James Fleishman, a former executive at Mountain View, California-based Primary Global Research LLC. Fleishman was convicted on insider-trading charges involving the expert networking firm last year.
The criminal case is U.S. v. Whitman, 12-cr-00125, and the SEC case is SEC v. Whitman, 12-cv-01055, U.S. District Court, Southern District of New York (Manhattan).
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Megaupload Prosecutors Seek to Keep Company as Defendant
Megaupload Ltd. should remain a defendant in the federal criminal case accusing the Internet company and its founder, Kim Dotcom, of running a massive illegal file-sharing service, U.S. prosecutors said.
Prosecutors, seeking to defeat the company’s request for dismissal, said July 27 that the U.S. has authority to bring copyright infringement charges against Megaupload even though it has no offices in the country.
“The heart of the issue is whether foreign companies like Megaupload can commit crimes in the U.S. and in this district and then never be brought to justice,” Assistant U.S. Attorney Ryan Dickey told U.S. District Judge Liam O’Grady during a hearing in Alexandria, Virginia. “That just can’t be the case, your honor.”
The dismissal of charges against Megaupload would add to the challenges prosecutors have faced since shutting down the company’s file-sharing website and charging Dotcom and six other individuals in January. A judge in New Zealand last month threw out warrants used to seize the Internet entrepreneur’s property, delaying Dotcom’s possible extradition by at least seven months.
At the July 27 hearing, lawyers argued over whether federal rules governing criminal cases bar indictment of foreign companies that don’t have offices or agents in the U.S. The rules require prosecutors to issue a summons to an agent or officer of the company, and mail a copy to the company’s last known address in the U.S., when bringing criminal charges against an enterprise.
Megaupload contends prosecutors haven’t tried to serve the company, which is registered in Hong Kong, and can’t meet the requirements.
By indicting Megaupload, officials were able to shut down its operations through criminal forfeiture, seizing domain names and freezing assets without any review by a judge, William Burck, a lawyer for the company, told O’Grady.
“The process chosen here illustrates the threat the rule was designed to prevent,” Burck, a partner at Quinn Emanuel Urquhart & Sullivan LLP, said. “They wiped out a foreign corporation with no office in the U.S. by bringing a criminal indictment.”
Megaupload operated in the U.S. for more than six years, earning more than $175 million in illegal profit since 2005 from the exchange of pirated films, music, books and software, according to an indictment. More than 500 servers leased by Megaupload were located in Virginia, giving the U.S. jurisdiction to prosecute the company, the government argued in court papers.
An extradition hearing for Dotcom, 38, was pushed back from next month until March 25 after a New Zealand judge ruled on June 28 that warrants police used to search his rented mansion on the outskirts of Aukland were overly broad and invalid. The warrants also enabled authorities to seize Dotcom’s property, including a pink Cadillac. Prosecutors are appealing the decision.
The case is U.S. v. Dotcom, 12-00003, U.S. District Court, Eastern District of Virginia (Alexandria).
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Dewey Reports Assets and Proposed New Plan for Partner Paybacks
Dewey & LeBoeuf LLP, the bankrupt law firm, disclosed financial data on its bank loans and assets last week as the team winding down the firm attempted to get former partners to sign on to a deal that would keep the estate from suing them.
Dewey said in court papers that JPMorgan Chase & Co. (JPM:US) took extra collateral for loans in April and May. Accounts receivable for Dewey were $210.7 million and advances to partners for taxes were $20.5 million, while the amount due from affiliates was $46 million, the firm said in court papers. The unaudited data mostly reflects values as of May 28, Dewey said.
The firm reported assets of $368 million and secured debt of $228 million. Unsecured debt was about $120 million as of May 28, Dewey said.
On July 26, the team winding down Dewey revealed a new plan offering former partners immunity from clawback suit that reduced the amount expected from lower earning lawyers and shifted the amount sought from Dewey’s highest earning lawyers and those in leadership roles, The Wall Street Journal reported. A plan presented earlier this month was not well received, the paper said.
The new proposal seeks $90.4 million from 672 former partners who received salary, pension or equity refunds in 2011 and 2012, the WSJ said.
At the bottom end of the scale, some partners would be expected to pay only $5,000 to the firm, a reduction from the $25,000 floated in the original plan, the WSJ said. At the top end, the maximum contribution would be $3.5 million, an increase from $3 million under the old plan, according to the paper. The new plan, which gives partners until Aug. 7 to sign on, also imposes a 20 percent premium on the firm’s executive committee, the WSJ said.
The case is In re Dewey & LeBoeuf LLP, 12-12321, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Beckwith Named Partner in Charge of Recruiting at Baker Botts
Baker Botts LLP has named Van Beckwith to a new firmwide position -- Partner in Charge, Recruiting. Beckwith has been involved with the firm’s recruiting efforts for more than a decade, serving as hiring partner for the firm’s Dallas office the last five years.
Beckwith will lead and expand firm-wide efforts to recruit outstanding new lawyers and provide support and coordination on the firm’s efforts to attract and recruit lateral partners and practice groups across its offices, the firm said. He will coordinate these efforts with the firm’s partners and department chairs throughout the Baker Botts network, the firm said.
Baker Botts has over 725 lawyers and a network of 13 offices in the U.S., Europe, the Middle East and China.
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