Bloomberg News

Latham, Kirkland on Bain, Eversheds: Business of Law

October 11, 2012

Affirmative action came under attack at the U.S. Supreme Court as Chief Justice John Roberts took the lead in questioning whether universities should continue to give special preference to racial minorities.

Latham & Watkins LLP’s Gregory G. Garre argued for the University of Texas, while Bert W. Rein, founding partner of Wiley Rein LLP, was the lawyer challenging the Texas program on behalf of a rejected white applicant. U.S. Solicitor General Donald Verrilli argued on the university’s side.

During arguments yesterday in Washington, the court’s Republican-appointed majority scrutinized the University of Texas’s admissions program, which uses race as a consideration in admitting as much as one quarter of each class.

“What you’re saying is that what counts is race above all,” Justice Anthony Kennedy, the likely swing vote, told the lawyer defending the plan. “You want underprivileged of a certain race and privileged of a certain race.”

At stake are policies that have been a fixture on U.S. campuses since the 1960s. All but a handful of the nation’s selective colleges and professional schools consider race as they seek to ensure a diverse student body. A ruling against Texas would raise new legal questions about those programs --and perhaps even wipe them out. The court will rule by June.

The Texas case may undermine or overturn a 2003 Supreme Court decision that reaffirmed the right of universities to consider race in admissions as a means of ensuring campus diversity.

Rein stopped short of directly asking the court to overturn its 2003 ruling. The logic behind that stance was questioned by Justices Sonia Sotomayor and Stephen Breyer, who said they saw little difference between the Texas policy and the University of Michigan Law School plan upheld in 2003.

The 2003 decision, Grutter v. Bollinger, said colleges and graduate schools could consider race as long as they do so through a broad review of a student’s application and don’t mechanistically award extra points to every minority.

Texas says its program is a model of the type of plan the high court approved in the Grutter ruling. The university’s lawyer Garre, said race was “one modest factor among many.”

“This program certainly is no more aggressive than the one in Grutter,” Ginsburg said. “It’s in fact more modest.”

The case is Fisher v. University of Texas at Austin, 11- 345, U.S. Supreme Court (Washington).

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Deals

Kirkland Advises Bain Capital in $1.6 Billion Deal for Apex

Kirkland & Ellis LLP advised Bain Capital LLC, which agreed to buy Apex Tool Group LLC, the maker of Craftsman hand tools, from Danaher Corp. (DHR:US) and Cooper (CBE:US) Industries Plc for about $1.6 billion in its largest deal so far this year. Gibson, Dunn & Crutcher LLP represents Cooper Industries Plc, Danaher Corporation and Apex Tool Group, LLC in the sale.

Kirkland partners Matthew E. Steinmetz, Neal J. Reenan, Richard J. Campbell, Matthew H. O’Brien, Yaman Shukairy, Michelle Kilkenney and Joshua N. Korff led the team.

The Gibson Dunn partners involved in the transaction include: Stephen Glover, corporate; Aaron Adams, finance; Michael Collins, executive compensation and employee Benefits; David Kennedy, IP; and Raymond Ludwiszewski, environment.

Danaher expects the sale to the Boston-based private-equity firm to generate after-tax net proceeds of about $650 million and be completed in the first half of 2013, the two companies said yesterday in a statement. Danaher, based in Washington, and Houston-based Cooper each own 50 percent of Apex.

The acquisition of Apex is the largest this year for Bain, which has participated in announced deals worth $4.7 billion in 2012, according to data compiled by Bloomberg. Apex, based in Sparks, Maryland, describes itself as one of the world’s largest makers of hand and power tools. It has dozens of its own brands, including GearWrench ratchets, and makes some of the tools sold by Sears.

Danaher and Cooper join United Technologies Corp. and DuPont Co. in selling major divisions to private-equity buyers this year. Danaher, which generated $16.1 billion in revenue last year, formed Apex with Cooper in 2010 by combining their tool businesses and naming Steve Breitzka, previously the head of the Danaher tool unit, chief executive officer.

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News

Ex-Refco Lawyer Collins Begins Retrial After Winning Appeal

Joseph Collins, Refco Inc.’s former outside lawyer whose 2009 fraud conviction was reversed by an appeals court in January, is being retried for allegedly helping Chief Executive Officer Phillip Bennett and other executives defraud investors of $2.4 billion.

Collins, formerly with the Chicago firm Mayer Brown LLP, was found guilty in July 2009 by a federal jury in Manhattan. He was granted a new trial by a U.S. appeals court, which ruled that the trial judge improperly instructed a deliberating juror outside the presence of Collins’s lawyers.

The U.S. accuses Collins of helping Refco’s management conceal from lenders and investors the existence of transactions that hid losses incurred by the New York-based firm. Collins, who is free on bail, was sentenced to serve seven years in prison. He faces retrial on 10 charges, including conspiracy and bank, wire and securities fraud.

“This is a case about a corporate lawyer who helped his biggest client, Refco, create a massive fraud that cost victims more than $2 billion and put the company out of business,” Assistant U.S. Attorney Harry Chernoff told jurors yesterday.

Jonathan Bach, a lawyer for Collins, argued his client had served as outside counsel for Refco without any knowledge of the fraud. Bach said his client didn’t have any motive to join in the scheme, which he argued was set in motion and concealed by Bennett and senior executives Robert Trosten and Santo Maggio.

All three men pleaded guilty and Trosten and Maggio agreed to cooperate against Collins. They testified against him at the earlier trial.

Once the biggest independent U.S. futures trader, Refco collapsed in 2005 two months after raising $670 million in an initial public offering. Refco Inc., as it was known after the IPO, filed one of the biggest bankruptcies in U.S. history after disclosing that it had transferred more than $1 billion in losses to a firm owned by Bennett.

Collins is accused of helping Refco’s management conceal transactions that hid losses incurred by the New York-based futures firm. The U.S. alleges Collins knew of the scheme and still drafted legal documents that allowed Bennett to deceive investors and helped it transfer losses to the Bennett-owned firm. Mayer Brown wasn’t accused of wrongdoing.

Collins was convicted of five counts, including two counts of wire fraud, two counts of security fraud and one count of conspiracy. Jurors were unable to reach a verdict on nine other charges.

Bennett is serving a 16-year sentence. His ex-partner, Tone Grant, is serving 10 years following a conviction at a trial.

The case is U.S. v. Collins, 07-cr-1170, U.S. District Court, Southern District of New York (Manhattan).

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Firm News

Squire Sanders Expands in Saudi Arabia With Local Firm

Squire Sanders LLP expanded in the Middle East through the acquisition of El-Khoury & Partners MENA business in Riyadh.

“Saudi Arabia is the Middle East’s largest economy and so a strong, on the ground presence in the Kingdom is a key step in further developing our regional practice,” Kevin Connor, who will lead the office said in a statement.

The firm Squire Sanders is acquiring formerly operated in Saudi Arabia as EK Partners & Al-Enezee, the firm said in a statement. The new office is operating as Al-Enezee in association with Squire Sanders. Ziad Ghassan El-Khoury previously managing partner of EK Partners & Al-Enezee, is a new Squire Sanders partner, along with Wissam Hachem and Hadi Melki.

The office will represent businesses and government entities as well as multinational companies, financial institutions and private investors throughout the Middle East and North Africa (MENA), the firm said.

“We’re delighted to deepen and expand our association with Squire Sanders,” Khulaif Al-Enezee, the managing partner of Al- Enezee, said in a statement. “There is increasing international interest in the Kingdom of Saudi Arabia, particularly in terms of inward investment and M&A, and of course in construction and project finance. Saudi companies are looking for advisers who have the know-how and experience of working with global businesses in these areas.”

Squire Sanders now has 46 lawyers in the MENA practice, Connor said. The firm has lawyers in 37 offices in 18 countries.

Firm Management

Eversheds Reappoints CEO, Names New Middle East Leadership

Eversheds LLP reappointed Bryan Hughes to a second term as chief executive officer, among other firm leadership news.

Against a backdrop of fierce competition, “Bryan’s steady hand and keen eye for business has helped the firm to significantly improve its cash position, profitability and ability to invest in our clients and our people,” John Heaps, chairman of Eversheds, said in a statement.

Hughes, who was appointed after an uncontested partnership election, will hold the position until May 2017.

“One of my major challenges is to continue the process of ensuring that the whole business remains connected and engaged, so that wherever our people work, they feel part of and are proud to be part of Eversheds,” Hughes said in a statement. “We have seen some firms lose their way as they have expanded globally and my number one priority is to ensure that this does not happen to us.”

Eversheds also appointed Nasser Ali Khasawneh, who was deputy managing partner in the Middle East and head of the firm’s practice in the UAE, as managing partner for the firm’s operations in the Middle East as of Nov. 1.

Khasawneh succeeds Chris Jobson, who will become chairman of the firm’s Middle East region. Jobson will concentrate on expanding the firms operation’s in Qatar, which has experienced rapid growth in non contentious areas of work including banking, corporate and infrastructure, as the country prepares for the World Cup in 2022 and its 2030 Vision, a government economic diversification plan, the firm said.

Eversheds tripled in size under Jobson’s leadership after merging in 2011 with legal consortium KSLG.

“Chris has done an amazing job of growing the firm’s presence in the region. This year, our financial results showed a 100 percent growth rate for the firm in the Middle East,” Khasawneh, said.

MoFo Lawyer Joins Jackson Lewis to Lead San Diego office

Jackson Lewis LLP hired Craig Schloss, as managing partner of the San Diego office. Schloss, who began his legal career as an associate at the firm, led the employment and labor group at Morrison & Foerster LLP’s San Diego office, and served as the managing partner of that office at one point, the firm said.

He succeeds Paul Sorrentino, who has been the interim managing partner and the office litigation manager since January 2008. Sorrentino will remain the office’s litigation manager and continue his active practice representing employers in all aspects of employment disputes.

Schloss specializes in employment and trade secret litigation, and has experience litigating wrongful termination cases, employee unfair competition/trade secrets disputes, wage and hour class actions, and discrimination and sexual harassment lawsuits. He also practices before the National Labor Relations Board regarding union representation matters on behalf of management.

Jackson Lewis has over 700 attorneys practicing in 49 locations.

Moves

Jones Day, Littler, Skadden Hire New International Partners

In international lateral hires announced this week, Jones Day picked up a team of four lawyers in Paris, and firms added to their ranks in Germany and Mexico.

Jones Day hired partner Alban Caillemer du Ferrage and four other lawyers, who joined the banking and finance practice in the firm’s Paris office on Oct. 8.

Caillemer du Ferrage and his team, formerly at Gide Loyrette Nouel, are known for their work in structured and derivative products and market infrastructures. Caillemer du Ferrage led the derivatives practice at Gide Loyrette, the firm said.

As well as working with the banking and finance services teams at offices throughout the firm, the team will collaborate with Jones Day’s mergers and acquisitions, litigation, public law, tax and antitrust teams to serve both financial institutions and corporate clients in all their financial transactions.

Caillemer du Ferrage is the International Swaps and Derivatives Association counsel for France. He also acts as French counsel for several market makers associations that publish standard documentation for financial transactions, including The British Bankers’ Association, the Zentraler Kreditausschuff, the Treuhand Kammer of Switzerland, and associations sponsored by the Federal Reserve Bank of New York and the Federation of Bankers’ Association in Japan, the firm said.

Littler, De la Vega y Conde, the Mexico offices of Littler Mendelson PC, has expanded its attorneys ranks in Monterrey with the addition of Amado Diaz Perez, who joins the firm as a shareholder. Prior to joining Littler, he served as a partner and head of the labor practice at Santos Elizondo, the firm said in a statement.

Skadden, Arps, Slate, Meagher & Flom LLP hired Johannes Frey as a partner in the German tax practice. He was previously at Shearman & Sterling LLP. Frey has experience in all types of corporate tax matters, including acquisitions, spin-offs, joint ventures, restructurings, and transactions involving cross- border tax planning.

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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