Joseph Collins, Refco Inc.’s former outside lawyer whose 2009 fraud conviction was reversed in January, was found guilty Nov. 16 by a jury in federal court in Manhattan.
Jurors convicted Collins, formerly with the Chicago law firm Mayer Brown LLP, on seven counts after a retrial on charges he helped Refco Chief Executive Officer Phillip Bennett and other executives defraud investors of $2.4 billion. Collins 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. accused Collins of helping Refco’s management hide transactions that concealed losses incurred by the New York- based firm. Collins was facing 10 criminal counts, including conspiracy and bank, wire and securities fraud.
In the first trial, 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. Before his conviction was reversed, Collins was sentenced to seven years in prison.
His sentencing is now set for March 20.
Jonathan Bach, vice chairman of Cooley LLP’s litigation department and head of the firm’s New York litigation group, had argued that Collins didn’t have any knowledge of the fraud and had no motive to join in the scheme.
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.
The case is U.S. v. Collins, 07-cr-1170, U.S. District Court, Southern District of New York (Manhattan).
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Allen & Overy Forms Association With Local Turkish Firm
Allen & Overy LLP announced that it has formed an exclusive association with Turkish law firm Gedik & Eraksoy, in order to expand its local services in Turkey.
Turkish partners Hakki Gedik and Gokhan Eraksoy, previously partners and joint heads of the banking and finance department at Hakki Gedik and Gokhan Eraksoy, according to LegalWeek, have formed Gedik & Eraksoy, along with eight associates, to form the association with A&O.
The firm already has a Turkish office, headed by Charles Lindsay, that provides English law advice to international and local corporations, banks, financial institutions, bondholders and government bodies on project finance, capital markets, general lending and mergers and acquisitions work.
The new association allows A&O to provide domestic and international clients with Turkish law advice.
“There is a real need for banking and capital markets expertise in the Turkish market over the coming years and even more so in light of the recent announcement by Fitch of an investment grade rating for Turkey. In the energy and infrastructure sector alone there is a demand for approximately $50 billion of financing for projects,” Lindsay said in a statement. “We are also seeing significant and increasing interest from our clients globally in acquiring Turkish assets both on the strategic and private equity side.”
Hakki and Gokhan will be based in Istanbul advising on banking and finance, syndicated lending, bond financing, leveraged finance, project finance, Islamic finance, financial regulatory, securitizations, other structured finance, and equity capital markets matters.
Allen & Overy has more than 500 partners in 42 offices in 29 countries worldwide.
K&L Gates Seoul Office to Open in January
K&L Gates LLP announced plans to open an office in Seoul in January after the Korean Ministry of Justice granted final approval of the firm’s application last week. The new office will be the firm’s 42nd worldwide and seventh in Asia.
New York partner Eric Yoon will be the Seoul office’s chief representative. He has practiced law for more than 20 years in the areas of financial services regulation, mergers and acquisitions, financing, and private equity investments, the firm said.
“Korea’s economy is one of the largest both in Asia and throughout the world. The country’s export-fueled growth of the past decades has led to the more recent, and increasingly robust, trend of foreign investments overseas by its companies and financial institutions,” Peter J. Kalis, K&L Gates chairman and global managing partner, said in a statement. “We believe that our Seoul office will provide these outward-looking Korean business enterprises, wherever their destinations may be, with ready access to the resources of a single law firm that is both global and local at the same time.”
The firm is also in talks with the Australian national law firm Middletons, which would also bolster the firm’s presence in the Asia-Pacific region.
K&L Gates has almost 2,000 lawyers in 40 offices in North America, Europe, Asia, South America and the Middle East.
Real Estate Lawyer Martin Wright Joins Mayer Brown
Mayer Brown LLP hired Martin Wright as a real estate partner in London. He will become a leader of the firm’s global real estate group when he joins in January. He was previously with Ashurst, where he has been a partner for more than 15 years, the firm said.
Wright has advised domestic and international clients on property investment and development. He acted on the purchase this year of the Goldman Sachs London headquarters, as well as advising Savills on taking a pre-let of GPE’s development at Margaret Street. He also worked for Chelsfield, First Base and Imagination Consortium in their winning bid to develop Silvertown Quays, the firm said.
“Martin has a wealth of experience in property investment and development, and we are delighted to have him join the group,” Jeremy Clay, a co-leader of Mayer Brown’s global Real Estate practice, said in a statement. “We already have a strong presence in London and his appointment will significantly add to that while enabling us to continue to develop our international capabilities.”
Mayer Brown has 20 offices the U.S., Europe and Asia.
Thompson Hine Adds Corporate and Energy Partner Gregory Chafee
Thompson Hine LLP announced that Gregory D. Chafee has joined the firm as a corporate and energy partner in the Atlanta office. Chafee serves as vice chairman of the American Bar Association energy and environmental markets and finance committee and was the chairman of Morris, Manning & Martin LLP’s sustainability practice before joining the firm.
“Greg’s addition strategically enhances our existing energy practice. His two decades of experience as an energy lawyer and corporate counsel enable him to understand our clients’ needs and expectations,” said Frank D. Chaiken, leader of the firm’s corporate transactions & securities practice.
Chafee was the first vice president, general counsel and secretary of DS Waters of America and Danone Waters of North America, representing market brands including Dannon, Evian and Crystal Springs. He also spent more than a decade with Georgia- Pacific Corp. as associate general counsel and energy counsel, where he was responsible for legal matters for the commercial and communications papers divisions of the global consumer products manufacturer.
Thompson Hine has seven U.S. offices.
Stanford Investors Claim Lawyers Enabled $7 Billion Fraud
Two of R. Allen Stanford’s former law firms were sued by defrauded investors who claim the lawyers crafted corporate structures that enabled the financier’s $7 billion Ponzi scheme for more than 20 years.
The proposed class-action, or group, lawsuit filed in federal court in Dallas by investors and Stanford’s court- appointed receiver seeks the return of $10 million in legal fees and more than $7 billion in damages from Greenberg Traurig LLP and Hunton & Williams LLP.
These law firms employed Miami attorney Carlos Loumiet, who served as Stanford’s outside general counsel, from 1988 through 2009. Yolanda Suarez, Stanford’s former chief of staff and general counsel, also worked at Greenberg Traurig before joining Stanford Financial Group Co. in 1992. Suarez, a former protegee of Loumiet described in the complaint as Stanford’s “right- hand,” is named as an individual defendant, while Loumiet isn’t.
“Stanford could not have perpetrated this global mass fraud on his own,” Edward Snyder, a lawyer for the Official Stanford Investors Committee, said in the complaint. “Loumiet’s and Suarez’s fingerprints are all over the Stanford fraud scheme from beginning to end.”
Stanford, 62, was convicted in March of orchestrating a scheme built on bogus certificates of deposit at Antigua-based Stanford International Bank Ltd. Evidence at his jury trial showed the Texas financier bribed Antiguan bank regulators and auditors and skirted U.S. securities laws and money-laundering regulations to keep cash flowing to his offshore bank.
Prosecutors said Stanford took more than $2 billion in depositor funds to finance a lavish personal lifestyle of jets, yachts and cricket tournaments as well as an array of money- losing private enterprises. He is serving a 110-year term in a Florida federal prison while appealing his verdict and sentence.
“Greenberg Traurig sympathizes with the investors who lost money as a result of Allen Stanford’s fraud, but the firm played no part in causing those losses,” Jim Cowles, an attorney for the firm, said in an e-mailed statement. “This is merely plaintiff’s newest attempt to pry open a deep pocket.”
Cowles said the firm’s “principal legal work” for Stanford occurred prior to 2001, “three years before the sale of the CDs involved in this suit,” when Loumiet left to join the other firm. “On limited matters in which Greenberg Traurig’s attorneys were subsequently consulted, they properly advised Stanford entities” and had no knowledge of Stanford’s fraudulent conduct, Cowles said.
Hunton & Williams said it neither caused nor facilitated Allen Stanford’s fraud.
“This lawsuit is factually and legally baseless and an overreach by Stanford Financial Group’s understandably frustrated investors attempting to recoup their unfortunate losses,” the Richmond, Virginia-based firm said in an e-mailed statement.
Matthew Rinaldi, Suarez’s attorney, didn’t respond to a voice or e-mail message after regular business hours Nov. 15.
The case is Janvey v. Greenberg Traurig, 3:12-cv-4641, U.S. District Court, Northern District of Texas (Dallas).
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Nike Agrees to Sell Cole Haan Brand to Apax for $570 Million
Skadden, Arps, Slate, Meagher & Flom LLP is representing Nike Inc. (NKE:US), the world’s largest athletic-shoe maker, in its agreement to sell its Cole Haan fashion brand to private-equity firm Apax Partners for $570 million as it focuses on faster- growing businesses. Kirkland & Ellis is advising Apax Partners.
The Skadden’s Palo Alto partners included Kenton King, corporate, and Joseph Yaffe, executive compensation and benefits.
Kirkland New York corporate partners Eunu Chun and Ariel Yehezkel and debt financing partners Jay Ptashek and Eric Wedel advised on the deal.
The transaction is expected to be completed in early 2013, Beaverton, Oregon-based Nike said Nov. 16 in a statement. Nike said in May that it was seeking to sell Cole Haan and soccer brand Umbro.
Nike Chief Executive Officer Mark Parker is focusing on the business units with the most growth potential and profitability. Iconix Brand Group Inc. agreed to buy Umbro in October for $225 million in cash.
“It frees Nike up to concentrate on the healthiest piece of the business,” Matt Powell, an analyst for SportsOneSource in Scarborough, Maine. “Putting all of management’s attention to driving athletic footwear worldwide is a good strategy.”
The company bought Cole Haan in 1988 for $95 million, including debt. After a year of ownership, the division had sales of $87 million.
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Penn National Jumps on Breakup Plan for First Casino REIT
Penn National Gaming Inc. (PENN:US), the operator of 29 casinos and racetracks, surged the most since its market debut 18 years ago after announcing plans to split into two public companies by placing most properties into a new real estate investment trust.
Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Penn National and Skadden, Arps, Slate, Meagher & Flom LLP is also advising for tax matters. Wells Fargo Securities and Bank of America Merrill Lynch are serving as financial advisers to Penn National.
The Skadden partners handling this matter from the REIT practice are John Rayis, Fred Goldberg, Joseph Coco and Evan Levy.
The shares gained as much as 34 percent in New York Nov. 16, after the company said it will spin off at least 17 properties into the first casino-focused REIT. MGM Resorts International (MGM:US) and Pinnacle Entertainment Inc. (PNK:US) rose Nov. 16 after executives at Wyomissing, Pennsylvania-based Penn said it would encourage other casino companies to sell properties to the REIT and lease them back as operators.
Penn National will continue to run most of its casinos and tracks, according to a statement (PENN:US). Its investors will receive a dividend of about $5.35 a share plus stock in the REIT. Other casino companies will probably consider similar moves to free up capital, said Joseph Greff, a JPMorgan Chase & Co. analyst.
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