Bloomberg News

Sullivan, Clifford Chance, Jones Day: Business of Law

October 24, 2012

New York Attorney General Eric Schneiderman hired a former partner from Bernstein Litowitz Berger & Grossmann LLP who will help state prosecutors investigate bank practices in the bundling of mortgage loans into securities.

Chad Johnson, a 1993 graduate of Harvard Law School who was a partner at Bernstein from October 2003 to April 2012, started this month as a senior trial counsel and will work on cases involving the financial services industry, according to the attorney general’s office.

Johnson’s hiring comes as Schneiderman is investigating with federal officials misconduct in mortgage securitization before the housing bust. The attorney general this month sued JPMorgan Chase & Co. (JPM:US), claiming that Bear Stearns, which JPMorgan acquired in 2008, defrauded investors in mortgage-backed securities.

Virginia Chavez Romano, a former assistant U.S. attorney in Manhattan, joined the attorney’s office this summer to lead the office’s investigation related to mortgage securities. Gary Fishman, a former principal deputy chief with the Manhattan District Attorney’s office, joined Schneiderman’s office in September and will work in the public integrity bureau, which investigates government corruption.

“With a wealth of investigative and prosecutorial experience, these attorneys will bring firepower to lead key areas of this office,” Schneiderman said in a statement. “From overseeing the mortgage investigation to rooting out corruption and taking on securities fraud, their legal talents will serve the people of New York well.”

Johnson, who was also a partner at Latham and Watkins and worked as a strategic adviser at BlackRobe Capital Partners, represented institutional investors in lawsuits against banks over the sale of mortgage securities, according to the attorney general’s office.

Sullivan & Cromwell Represents Ally in $4.1 Billion Deal

Sullivan & Cromwell LLP is representing Ally Financial Inc. (ALLY:US) in its $4.1 billion agreement to sell a Canadian auto-finance and deposit business to Royal Bank of Canada, the nation’s largest lender. Torys LLP was Canadian counsel. Osler, Hoskin & Harcourt LLP advised Royal Bank.

Sullivan’s New York-based team is led by financial institutions mergers and acquisitions partner Andrew Gerlach and corporate partner Jay Clayton. Other partners include Senior Chairman H. Rodgin Cohen; Sergio Galvis, head of the firm’s Latin America group; Andrew Solomon, tax; Marc Trevino, executive compensation and benefits; and special counsel Spencer Simon, intellectual property.

Torys’s lawyers included Jim Hong, John Tobin, Jay Holsten, Blair Keefe, Mitch Frazer and Saira Bhojani. Ally’s in-house counsel was Richard V. Kent and Wende Rapson of Ally Canada, Torys said in an e-mail.

The Osler team advising RBC includes Doug Marshall, Kashif Zaman, Stephen Clark, Shuli Rodal, Kelly Moffatt, Jason Hanson and Doug Rienzo.

Royal Bank will buy the Ally business for a C$1.4 billion ($1.4 billion) investment net of excess capital, the Toronto- based lender said yesterday in a statement. The total price will be C$3.1 billion to C$3.8 billion, depending on the size of a dividend taken out by Ally before completing the sale. The deal is the largest takeover ever for Royal Bank, eclipsing a $2.16 billion purchase of Centura Banks in 2001.

“Auto loans came through the crisis as a very, very good asset,” Peter Routledge, an analyst with National Bank Financial, said in a telephone interview. “It was profitable, credit quality was better than people expected, yields were decent so it’s good risk-return. It just seems to me like a good asset for Royal Bank.”

For more, click here.

Halcon Agrees to Buy North Dakota Fields for $1.45 Billion

Thompson & Knight LLP advised Halcon Resources Corp. (HK:US), the oil and natural gas producer run by former Petrohawk Energy Chairman Floyd C. Wilson, on an agreement to buy some of Petro- Hunt LLC’s North Dakota fields for about $1.45 billion in cash and stock. Fulbright & Jaworski LLP advised Petro-Hunt.

The Thompson & Knight team included partners William T. Heller and Harry R. Beaudry, corporate/securities; Hunter H. White, oil and gas; and Roger D. Aksamit, tax.

Finance partners Andrew P. Flint, Brian E. Minyard and Robert H. Saunders worked on the bridge commitment, borrowing base adjustment and related financing matters.

John Broomes with Hinkle Law Firm LLC also assisted Halcon on the transaction, Thompson & Knight said. Halcon’s internal legal team included general counsel David Elkouri, Jason Payne and Kason Kerr.

Fulbright partners included Glen Hettinger, corporate; Deborah Gitomer, energy; and Jack Allender and Robert Phillpott, tax.

Petro-Hunt, a closely held company owned by the Hunt family, and an affiliated entity will get $700 million in cash and $750 million in shares, Houston-based Halcon said in a statement. The purchase includes about 81,000 net acres in four North Dakota counties with current net production equivalent to more than 10,500 barrels of oil a day.

Vinson & Elkins LLP advised Canada Pension Plan Investment Board on its $300 million purchase of Halcon stock at $7.16 a share, which is subject to the Petro-Hunt deal. Vinson Counsel Kathryn Wilson led the team for CPPIB, with assistance from M&A partner Keith Fullenweider.

For more, click here.

Firm News

Clifford Chance Re-Elects Layton as Global Head of Corporate

Matthew Layton was re-elected to another four-year term as global leader of Clifford Chance LLP’s corporate practice after an uncontested election.

Layton, whose new term begins Nov. 1, was first elected to the role in 2008. He joined Clifford Chance in 1983 and has been a partner since 1991.

“Our collective achievements, including having advised on five of the top 10 global M&A deals this year, make me immensely proud,” Layton said in a statement.

Clifford Chance’s corporate practice has 750 legal advisers worldwide. The firm has 34 offices in 24 countries with about 3,400 legal advisers.

Moves

Jones Day Hires Mergers & Acquisitions Partner in Hong Kong

Jones Day said Chris Swift joined as a partner in the mergers and acquisitions practice in Hong Kong. Swift was formerly a partner with Allen & Overy LLP, the firm said.

Swift focuses his practice in mergers and acquisitions, private equity, corporate restructurings and general corporate finance. He has more than 15 years of experience in the Asia Pacific region.

Jones Day has 2,400 lawyers in 35 offices worldwide.

Gardere Expands Intellectual Property Practice in Dallas

Gardere Wynne Sewell LLP hired Sarah M. Paxson as a partner in the Dallas office. She was formerly at Thompson & Knight LLP.

Paxson focuses her practice on patent infringement, trade secret and trademark litigation. In addition to providing litigation and litigation avoidance services, she counsels clients on licensing issues and proper development and management of intellectual property assets.

Gardere Wynne has more than 250 lawyers in three Texas offices and a Mexico City office.

News

U.K. Offers Firms Chance to Defer Economic-Crime Prosecutions

The U.K. government, seeking to speed up prosecution of complex cases of economic crime, said companies may be offered the chance to defer prosecution for fraud, money-laundering and bribery if they agree to terms that might include paying a “substantial financial penalty.”

Justice Minister Damian Green announced the introduction of “Deferred Prosecution Agreements,” which can be made between a prosecutor and an organization to defer prosecution for alleged economic wrongdoing as long as stringent conditions are met. These include making amends to victims, publicly admitting wrongdoing, reforming practices and paying a fine.

“Deferred Prosecution Agreements will give prosecutors an effective new tool to tackle what has become an increasingly complex issue,” Green said in an e-mail. “This will ensure that more unacceptable corporate behavior is dealt with, including through substantial penalties, proper reparation to victims, and measures to prevent future wrongdoing.”

Fraud costs the U.K. 73 billion pounds ($116 billion) a year, Green said.

The DPAs will be overseen by a judge, agreed on in open court and the outcome will be published to ensure transparency, the Ministry of Justice in London said in a statement. If, at the end of the period, the prosecutor is satisfied the organization has met its obligations, there will be no prosecution. If not, a prosecution could be brought.

If the company violates its DPA agreement, the case could be referred back to the prosecuting authority, such as the Serious Fraud Office or the Crown Prosecution Service, the ministry said.

Videos

History’s Stealth Lawyers: Video Series on Ex-Lawyers

History is replete with stealth lawyers -- people who graduated from law school or even practiced law before achieving success in other walks of life.

Vladimir Lenin, Mahatma Gandhi, Studs Terkel, Wallace Stevens and Howard Cosell are some of the most famous law school graduates who aren’t famous for their legal careers. To hear from some of today’s lawyers, about how they found success in other fields, watch Bloomberg Law’s weekly video series Stealth Lawyers. A new episode is posted every Wednesday.

Click here for the video.

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

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


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