Bloomberg News

Jones Day, King & Spalding, Kirkland: Business of Law

February 11, 2013

Jones Day opened an Amsterdam office and hired two mergers and acquisitions partners, Marcel van de Vorst, formerly of Norton Rose LLP, and Marc Rijkaart van Cappellen, of Baker & McKenzie LLP.

Van de Vorst has a transactional and corporate advisory practice involving technology, life sciences and growth businesses. Rijkaart van Cappellen has a transactional and corporate advisory practice that includes capital market transactions, corporate governance, joint ventures, public and private mergers and acquisitions, and restructuring. He also has experience in cross border equity offerings and structuring of international deals with a focus on the U.S. and Latin America, the firm said.

Luc Houben, recently partner-in-charge of the Brussels office, has moved to Amsterdam to head the new six-lawyer office.

Houben said in an e-mail of the firm’s motivation to open the new office, “The Netherlands is an important international business and legal market with close ties to the U.S. as well Asia.”

The firm expects to continue hiring in Amsterdam across practices, Houben said.

Jones Day has more than 2,400 lawyers at 37 offices throughout the U.S., Europe and Asia.

King & Spalding Begins Russian Disputes Practice With New Hire

King & Spalding LLP has recruited Russian lawyer Ilia Rachkov to establish an international disputes practice in the firm’s Moscow office. He previously worked at the Moscow office of German firm Noerr LLP before starting a solo practice last year. He also teaches international economic law at the law faculty of the Moscow State Institute of International Relations, the firm said.

Rachkov’s practice focuses on commercial litigation and arbitration. He has developed particular expertise in representing international and Russian clients in the pharmaceuticals, media, automotive and regulated markets, the firm said.

He recently was an expert witness on Russian law in the Berezovsky-Abramovich litigation in London and has also represented clients including UniCredit Bank, Pfleiderer, Dyckerhoff and SL Leasing, the firm said.

Rachkov also has experience in corporate and mergers and acquisitions work. He represented Volkswagen on its Russian joint venture with the EBRD, Google on its recent takeover of Motorola Mobility and Daimler in its joint ventures with KAMAZ, the firm said.

“As we continue to expand our practice in Russia, we see an increasing client need for dispute resolution services, both within Russia and abroad,” Sergey Komolov, managing partner of King & Spalding’s Moscow office said in a statement. “Many of our Russian clients look towards the United Kingdom for their dispute resolution needs and this hire will provide us with an invaluable axis between our Moscow and London offices and further strengthen our client offering in Russia.”

King & Spalding’s Moscow office, which opened in 2011, has six partners who handle corporate, energy, real estate, TMT and environmental matters. The firm has 800 lawyers in 17 offices in the U.S., Europe, the Middle East and Asia.

Edwards Wildman Starts Technology and Media Practice Group

With about 150 attorneys across 15 offices, Edwards Wildman Palmer LLP established a multidisciplinary technology, media and telecommunications practice group. The group will offer clients legal advice from across practice areas, including private equity and venture capital; privacy and data protection; intellectual property; media and technology licensing and transactions; mergers and acquisitions; debt financings; communications and regulatory matters; insurance and reinsurance; litigation, and antitrust/competition law, the firm said.

The practice group is led by Pete Barrett, a private equity and venture capital partner based in Providence, Rhode Island; Sarah Camougis, a Boston-based private equity and venture capital partner; Richard Graham, an intellectual property/information technology and privacy partner in the firm’s London office; and Art Harding, a business law partner in Washington.

“The speed of technology change has skyrocketed, with new issues presented by cloud computing, smart meters, wireless communications, open source, net neutrality, digital media, e- Health and next generation technologies,” Barrett said in a statement. “Our multidisciplinary approach ensures that our attorneys are well-positioned to advise clients at this cutting- edge intersection of new media technology and traditional business issues.”

Edwards Wildman has 625 lawyers in 15 offices in the U.S., London and Asia.

Video

Layoffs Coming to AmLaw 100 Law Firms as More Firms Merge

Law firm consultant Kent Zimmermann of the Zeughauser Group tells Bloomberg Law’s Lee Pacchia that partner layoffs at America’s largest law firms are quietly picking up speed because of a lack of billable work coming in their doors.

Legal process outsourcers (LPOs) and other alternative legal service providers are stealing low-value work from traditional firms, with one AmLaw 100 firm planning to lay off 25 percent of its associates firmwide during the next three years, he says.

LPOs and other alternative legal service providers are also beginning to take the bread-and-butter of large law firms -- handling whole mergers and acquisitions, not just the due diligence aspects of deals, according to Zimmermann. For smaller deals, clients are finding “they don’t need perfect, they need good enough,” and are increasingly willing to hire LPOs rather than higher-cost traditional firms, he says. On some deals, clients are “adding insult to injury,” asking their traditional outside counsel to supervise the work of LPOs, he says. Major U.S. firms are scrambling to deal with the new competitors.

Zimmermann also said he expects more major law firm mergers in 2013. Firms fear they won’t be able to grow organically fast enough to meet their strategic goals. Many of those looking at mergers are trying to build on practice areas in which they are traditionally strong, or expand into emerging markets where they are weak, he says.

Click here for layoffs video, click here for mergers video and here for LPO video.

Moves

Holland & Knight Hires Three McCarter Partners in Boston

Four attorneys from McCarter & English LLP join Holland & Knight LLP in Boston. Brian G. Leary, Diane M. McDermott and Jeffrey M. Stoler have joined the firm as partners along with a senior counsel.

Leary is a member of the firm’s business section and works with companies in planning and implementing litigation defense, government relations and media strategy. McDermott is a member the real estate section and advises on permitting and development, leasing, conveyancing, and purchase and sale transactions, the firm said. She also represents clients in the hotel and hospitality industry. Stoler is a member of the firm’s business section handling corporate and securities matters. He serves as general counsel to middle-market businesses engaged in the service, manufacturing and tech sectors, the firm said.

Holland & Knight has 1,000 lawyers in 17 U.S. offices as well as Abu Dhabi, Beijing, Bogota, and Mexico City.

Obama Government Official Returns to K&L Gates in Pittsburgh

David H. Ehrenwerth, regional administrator of the General Services Administration and Associate Commissioner of the U.S. Public Buildings Service, rejoined K&L Gates LLP as a partner in its real estate investment, development, and finance practice.

At the U.S. Public Buildings Service, Ehrenwerth helped manage the government’s national real estate portfolio of nearly 400 million square feet across 10,000 properties, the firm said. He also served as the agency’s Senior Recovery Act Official and oversaw the expenditure of the $5.5 billion allocated by the American Recovery and Reinvestment Act for the construction and energy-efficient renovation of federal buildings throughout the country.

Ehrenwerth advises real estate developers, closely-held entities, investment groups, and lenders, as well as hospitals, foundations, and economic development organizations. He has a particular focus on real estate development, finance, corporate transactions, and complex domestic and international joint ventures.

Ehrenwerth first joined K&L Gates in 1974 and was elected to the partnership in 1979.

K&L Gates has 46 offices located in the U.S., Asia, Australia, Europe, the Middle East and South America.

Hogan Lovells Bolsters Denver Oil, Gas, Resources Practice

Hogan Lovells LLP is expanding its Denver oil and gas and natural resources practice with a lateral partner hire, an of counsel hire, and the promotion of a firm lawyer to partner, the firm said.

Scot Anderson joins from Davis Graham & Stubbs LLP (816527L:US) as a partner. A Patton Boggs associate joins as of counsel, while Jennifer Biever was recently promoted to partner in the energy and natural resources practice in Denver.

Anderson has experience advising oil and gas, mining, and natural resources companies on transactional, regulatory, operational, and project development matters.

In addition to counseling oil and gas companies, Biever works with renewable energy companies and other development clients on natural resource, land use, environmental, siting, and regulatory issues, the firm said.

Hogan Lovells’ energy and natural resources practice has lawyers in 15 countries in Europe, Asia, the Middle East and the U.S. The firm has more than 2,400 lawyers in 40 offices.

News

Paterno Family-Commissioned Report Faults Freeh’s Investigation

The family of former Pennsylvania State University football coach Joe Paterno released a report yesterday that said Louis Freeh’s investigation into a child sex abuse case was “fundamentally flawed.”

Former U.S. Attorney General Dick Thornburgh, a lawyer with K&L Gates LLP (1142L:US), and other experts, hired by the Paterno family, said they determined in a review of evidence that Paterno didn’t attempt to hide any information or impede the probe into former assistant coach Jerry Sandusky.

Freeh’s findings, released last year, failed Penn State, the university’s board of trustees and Sandusky’s victims by not finding the truth, according to the Paterno family’s report.

“The Freeh report is a profound failure,” Wick Sollers, an attorney at Atlanta-based law firm King & Spalding LLP (1140L:US) that was asked by the Paterno family to review Freeh’s findings, said in a statement. “It isn’t a little wrong on the minor issues. It is totally wrong on the most critical issues. That the Board and the NCAA relied on this report, without appropriate review or analysis, is a miscarriage of justice.”

In July, the report from former Federal Bureau of Investigation Director Freeh found Paterno, former Penn State President Graham Spanier and other officials failed to protect children from sexual abuse by Sandusky. The findings were released after a seven-month investigation, ordered by a special committee of Penn State’s board of trustees.

Freeh told reporters during a July press conference that the red flags involving Sandusky were numerous and Paterno and others ignored them. Freeh said the former Penn State head coach was an “integral part” of the concealment.

The “self-serving” report commissioned by the Paterno family “does not change the facts established in the Freeh report or alter the conclusions reached in the Freeh Report,” Freeh wrote in a statement yesterday.

“I stand by our conclusion that four of the most powerful people at Penn State failed to protect against a child sexual predator harming children for over a decade.”

Sollers responded in a statement that Freeh “refuses to address the critical factual and procedural failures in his own report.”

Penn State said in an e-mailed statement that the purpose of the Freeh investigation was to highlight failures in the school’s governance and compliance structure and to make recommendations to correct those failures.

The analysis by Thornburgh, a former Pennsylvania governor; attorney Sollers; former FBI profiler Jim Clemente; and Fred Berlin, the director of the Johns Hopkins Sexual Behaviors Consultation unit, found no evidence that Paterno deliberately covered up incidents of child molestation to protect Penn State football.

For more, click here.

SEC Nominee White’s Disclosure Report Shows Possible Conflicts

If confirmed as the next chairwoman of the U.S. Securities and Exchange Commission, Mary Jo White would have to avoid working on any matter directly involving JPMorgan Chase & Co (JPM:US)., General Electric Co (GE:US)., Deloitte & Touche LLP and former Bank of America (BAC:US) chief executive Ken Lewis, according to a financial disclosure report released Feb. 8.

White’s report lists those entities as major clients while a partner at Debevoise & Plimpton LLP (1169L:US), where she reported earning $2.4 million last year. In an ethics letter, White wrote that she would retire from Debevoise upon confirmation by the Senate.

White’s report, which also lists former Goldman Sachs director Rajat Gupta and Forest Laboratories Inc (FRX:US). as clients, underscores her longstanding ties to Wall Street as a top criminal defense lawyer. She could face questions about potential conflicts of interest at her Senate confirmation hearing, which hasn’t been scheduled.

“For a period of one year after my retirement, I also will not participate personally and substantially in any particular matter involving specific parties in which Debevoise & Plimpton LLP is a party or represents a party,” White wrote.

Obama nominated White for the position on Jan. 24.

White’s husband, John W. White, is a partner at Cravath, Swaine & Moore LLP. He has agreed to not communicate with the SEC “on behalf of the firm or any client” while Mary Jo White is SEC chairman. His practice involves advising companies on public reporting requirements and corporate governance matters, according to the firm’s website.

KKR’s Energy Future Bonds Fall on Restructuring of Biggest LBO

Energy Future Holdings Corp. (TXU:US), the power company formerly known as TXU Corp. hired law firm Kirkland & Ellis LLP to help restructure its debt load, according to a person familiar with the situation, who asked not to be identified, citing lack of authorization to speak publicly.

Allan Koenig, a spokesman at Energy Future, said the company doesn’t comment on the identities of its specific advisers. Kate Slaasted, a spokeswoman for Chicago-based Kirkland & Ellis, declined to comment.

Energy Future Holdings bonds headed for the biggest weekly decline in three months before a potential restructuring of debt raised to fund the largest leveraged buyout in history.

The $1.83 billion of 10.25 percent senior bonds due in November 2015 issued by the power company’s unregulated Texas Competitive Electric Holdings Co. fell 3.2 cents since Feb. 1 to 24.8 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes, which are redeemable by the company in a month’s time, are poised for the biggest weekly drop since Nov. 2, when they fell 9.2 cents.

Energy Future has $47.2 billion of debt (TXU:US), data compiled by Bloomberg show, after being taken private by KKR & Co., TPG Capital and Goldman Sachs Capital Partners in 2007. The company has struggled to be profitable ever since the LBO, as the shale revolution created a glut of natural gas, pushing U.S. prices to the lowest since 1999 last year. It has posted seven consecutive quarterly losses and had $37.4 billion of long-term borrowings as of Sept. 30.

For more, click here.

Deals

Charter to Buy Cablevision’s Optimum West for $1.63 Billion

Charter Communications Inc. (CHTR:US) agreed to buy Cablevision Systems Corp.’s Optimum West for $1.63 billion in cash, gaining a regional cable provider in the western U.S. Sullivan & Cromwell LLP represents Cablevision.

The S&C team includes partners: Duncan McCurrach, mergers and acquisitions; Davis Wang, tax; and Robert Downes, financing.

The price represents a multiple of 8.9 times Optimum West’s third-quarter 2012 annualized earnings before interest, taxes, depreciation and amortization, Charter said in a statement.

Charter won out over peers such as Time Warner Cable Inc. (TWC:US) and Suddenlink Communications, which also made offers for the business, according to people close to the situation. Charter Chief Executive Officer Tom Rutledge is also familiar with Optimum West, which provides cable services to states such as Colorado and Utah. He pushed Cablevision to buy the business in 2010 when he was Cablevision’s chief operating officer.

In Optimum West, Charter gains more than 360,000 customers in Montana, Wyoming, Colorado and Utah. Cablevision (CVC:US) bought the unit, previously known as Bresnan Broadband Holdings LLC, more than two years ago from Providence Equity Partners Inc. for $1.37 billion.

Selling the business allows Cablevision to concentrate on the New York area, where most of its customers reside. Cablevision serves about 3 million subscribers in New York, New Jersey, Connecticut and parts of Pennsylvania. The Bethpage, New York-based company began exploring a sale of the Bresnan business after several acquisitions of cable systems were announced last year at favorable prices, compared to the value of publicly traded cable companies’ shares.

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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