Bloomberg News

Clifford Chance, Linklaters, Dewey: Business of Law

February 28, 2013

Clifford Chance LLP advised Royal Dutch Shell Plc (RDSA), the world’s largest supplier of liquefied natural gas, on its agreement to buy LNG assets from Repsol SA (REP) for $4.4 billion in cash to expand in Latin America and Spain. Linklaters LLP, with a team led by Madrid corporate partners Alejandro Ortiz and Lara Hemzaoui and London projects partner Matthew Hagopian, advised energy company Repsol.

The Clifford Chance team was led by London corporate partner Kathy Honeywood. The team was supported in the U.S. by partners Kate McCarthy, William Wallace and David Brinton. Additional partners included John Wilkins, energy and infrastructure; David Harkness, tax; Nigel Howarth, environment; Chris Goodwill, employment; Oliver Bretz, antitrust; and Jose Maria Fernandez-Daza, M&A/corporate.

Clifford Chance advised on all aspects of the transaction, providing integrated English, Spanish, New York and Dutch law advice as well as specialized antitrust, employment, environmental and tax advice.

The deal, which helps the Spanish oil company avoid a credit-rating downgrade to junk, gets Shell export capacity in Peru as well as in Trinidad and Tobago, The Hague-based company said Feb. 26. Shell will take over financial leases and assume debt, bringing the transaction’s total value to $6.7 billion. Repsol’s Canaport terminal in Canada, which imports gas into North America, wasn’t sold.

Acquiring import and export terminals “will allow Shell to realize trading synergies from its global portfolio,” Oswald Clint, an analyst at Sanford C. Bernstein & Co., said in a note. For Repsol, the sale “ensures investment grade credit rating and removes the risk of equity dilution due to a conversion of preference shares,” he said.

The LNG asset sale was the centerpiece of Repsol’s plan to preserve its credit ratings by selling 4.5 billion euros ($6 billion) of assets and take other measures, if necessary, such as swapping preferred shares into convertible bonds.

For more, click here.

News

Dewey & LeBoeuf Wins Approval to Liquidate Remaining Assets

Dewey & LeBoeuf LLP, after imploding last year in the largest law firm bankruptcy, won confirmation of its plan to set up trusts to liquidate its remaining assets.

More than $71 million will be returned to the estate by participating former partners under the plan, an agreement described as a “cornerstone” to the deal by restructuring officer Jonathan Mitchell. U.S. Bankruptcy Judge Martin Glenn in New York approved confirmation of the plan during a hearing.

“This plan is a tribute to the partners coming together,” Al Togut, Dewey’s chief bankruptcy lawyer, told Glenn during the hearing. “Chapter 11 works best when its consensual and this case is living proof that is right.”

Dewey filed for protection from creditors on May 28 marking the biggest bankruptcy in the legal business. The firm, based in New York, fell apart in a matter of weeks last year after ousting its chairman and watching virtually all its partners quit for competing firms.

The product of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Green and MacRae, the firm at one point had more than 1,300 attorneys in 12 countries.

At the outset of bankruptcy, there was secured debt of about $225 million and accounts receivable of $217.4 million, the firm said. The petition listed assets of $193 million and liabilities of $245.4 million as of April 30.

The secured lenders and the unsecured creditors committee reached an agreement that was based around the so-called partner contribution plan, Mitchell testified. Without the partners plan, Dewey’s liquidation would have little hope for success, Mitchell said.

The plan agreement incorporates about 440 former partners. Glenn approved a separate agreement with 76 retired partners who will return a total of $490,000 to the estate, Togut said. The group includes partners who had either retired in prior years or left the firm before it went out of business.

Glenn also approved settlements with former partners of the firm’s U.K.’s office, who agreed to return $900,000. Roughly $650,000 of that amount will return to the U.S. estate.

The case is In re Dewey & LeBoeuf LLP, 12-12321, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Firm News

Peter Haley Named Nelson Mullins Boston Managing Partner

Nelson Mullins Riley & Scarborough LLP named Peter J. Haley managing partner of the Boston office, which has 56 attorneys and government relations professionals.

Haley has been in practice for more than 20 years and has experience with financial and corporate restructurings matters. His practice includes both corporate and litigation matters.

Nelson Mullins opened its Boston office in 2006 with two attorneys. The firm has more than 470 attorneys and government relations professionals at 13 U.S. offices.

Moves

Jackson Lewis Hires Erisa Litigator in New Orleans

Jackson Lewis LLP hired benefits litigator Charles F. Seemann III in the firm’s New Orleans office as partner. Seemann was previously a member of the ERISA Litigation practice group at Proskauer Rose LLP, the firm said.

Seemann’s primary area of practice is the defense of complex ERISA fiduciary actions. He has experience defending plan sponsors, plan fiduciaries, individual and institutional, financial institutions, directed trustees, among others. He also has experience as defense counsel in stock-option disputes and executive compensation litigation; wage and hour advice and litigation; and other matters, the firm said.

Jackson Lewis has 750 attorneys practicing in 52 locations nationwide.

Withers Bergman Starts Pan-European Investment Funds Practice

Withers Bergman LLP hired investment management specialist Matthew Feargrieve, previously of Appleby Global, who will establish a pan- European investment funds practice from the firm’s Zurich office.

Feargrieve advises fund managers, investors and private clients on fund structuring and investment in public and private investment products. He advises clients throughout Europe, particularly Switzerland and the U.K., the firm said in a statement.

Withers Bergman has more than 100 partners and more than 270 other lawyers, with 10 offices in the U.S., Europe, Asia and the British Virgin Islands.

Davis Wright Hires Philip Albert for IP Practice

Philip Albert, an IP attorney from Kilpatrick Townsend & Stockton LLP, joined the IP practice at Davis Wright Tremaine LLP in San Francisco.

Albert advises clients on intellectual property matters related to electronics, software, and business methods such as computer-generated imagery, digital signal processing, e- commerce technology, cryptology, and wired and wireless networking and protocols, the firm said. He concentrates his practice on patent prosecution and counseling.

Davis Wright Tremaine LLP has about 500 lawyers in none offices in the U.S. and Shanghai.

Litigation

Argentina’s Default Threat Meets Skepticism at Appeals Court

Argentina’s claim that a U.S. court can’t tie its obligation to make defaulted bondholders whole to payments on restructured debt faced skepticism from judges as a lawyer for the country said it won’t obey orders to pay as much as $1.3 billion of defaulted sovereign debt.

Jonathan Blackman, a partner at Cleary Gottlieb Steen & Hamilton LLP and the attorney for the South American nation, said yesterday that Argentina would default on its restructured debt if it’s forced by a three-judge appeals panel in New York to pay holders of the defaulted debt.

“So the answer is you will not obey any order but the one you propose?” U.S. Circuit Judge Reena Raggi asked Blackman during more than two hours of arguments.

“We would not voluntarily obey such an order,” Blackman said

Blackman claimed that a lower-court order obliging Argentina to pay the defaulted bonds whenever it makes payments on restructured debt violates its sovereignty, threatens to trigger a new financial crisis and would quadruple the number of Argentine bond cases in New York federal court, rather than resolving them.

“If that’s the confrontation the court seeks with the injunctions, that is the court’s decision,” Blackman said. “We’re representing a government and governments will not be told to do things that fundamentally violate their principles.”

A range of third parties with a stake in the outcome -- including the holders of Argentina’s restructured debt, international payment intermediaries and banks, and the trustee for the restructured bonds -- claim the lower-court’s actions also threaten their interests.

Argentina says a ruling in the creditors’ favor would open it up to more than $43 billion in additional claims it can’t pay. The country defaulted on a record $95 billion in debt in 2001. Holders of about 91 percent of the bonds agreed to take new exchange bonds in 2005 and 2010, at a deep discount.

The appeals panel heard arguments from both sides, as well as from lawyers for the Exchange Bondholder’s Group, which represents holders of the restructured debt, and for Bank of New York Mellon Corp. (BK:US), the indenture trustee for the restructured bonds. The court may not rule for weeks or months.

“Argentina cannot violate this injunction without participation of the Bank of New York,” Theodore Olson, of Gibson Dunn & Crutcher LLP who is representing NML Capital, told the judges. Holders of the defaulted debt are seeking “what they are owed,” he said.

The holdout creditors are seeking to uphold rulings by Griesa that require Argentina to pay them the full amount they’re owed whenever it makes a required payment to the holders of the exchange bonds. The Exchange Bondholder Group claims the ruling improperly threatens their investment.

“We’re innocent parties,” attorney David Boies, founder of Boies Schiller & Flexner LLP, argued for the Exchange Bondholder Group. “I represent people who did what they thought was right. All I’m saying is what they did shouldn’t count against them.”

Griesa’s order shouldn’t apply to restructured debt holders, Boies told the panel. The court can’t hold them hostage, he said.

The lower court case is NML Capital Ltd. v. Republic of Argentina, 08-06978, U.S. District Court, Southern District of New York (Manhattan). The appeal is NML Capital Ltd. v. Republic of Argentina, 12-00105, U.S. Court of Appeals for the Second Circuit (New York).

For more, click here.

Ex-Mercury Lawyer Skaer Settles Options Backdating Suit With SEC

Former Mercury Interactive LLC General Counsel Susan Skaer settled a U.S. Securities and Exchange Commission lawsuit alleging she participated in improper backdating of company stock options.

U.S. District Judge William Alsup in San Francisco said yesterday in an order that he was told of the settlement and postponed Skaer’s trial set for March 11 “to allow time for the commission to approve the settlement.” Details of the accord weren’t disclosed in the filing.

The SEC sued Skaer and other executives at Hewlett-Packard Co. (HPQ:US)’s Mercury Interactive unit in 2007 alleging they participated in a scheme to backdate employee stock options without accounting for the resulting compensation expenses. Alsup on Feb. 13 denied Skaer’s request to dismiss the claims against her. Skaer is the only remaining defendant in the case.

Michael Torpey, of Orrick Herrington & Sutcliffe LLP, Skaer’s lawyer, didn’t immediately respond to e-mail seeking comment on the agreement. Alvin Williams, an SEC attorney, declined to comment on it.

Amnon Landan, former chief executive officer of Mercury Interactive, agreed to pay $4.5 million, including a $1 million fine, to settle claims SEC claims against him in the backdating case, according to a filing in the case last week.

The SEC has said more than 40 stock option grants at Mercury Interactive were backdated from 1997 to 2002, and $258 million in compensation expenses weren’t reported to investors as a result, according to court documents. Hewlett-Packard acquired (MERQ:US) Mercury Interactive in 2006.

The case is Securities and Exchange Commission v. Mercury Interactive LLC, 07-02822, U.S. District Court, Northern District of California (San Francisco).

Video

Consultant: More Big Law Firms Will “Implode”

Bruce MacEwen, a law firm consultant and publisher at AdamSmithEsq.com, tells Bloomberg Law’s Lee Pacchia that “we will see some more name brand [law] firms implode” in 2013. The defunct New York law firm Dewey & LeBeouf, which dissolved in 2012, saw its bankruptcy plan approved by a Manhattan U.S. Bankruptcy Court judge on Wednesday. It is the largest U.S. law firm ever to go out of business, with more than 1,400 lawyers on its staff at its peak. Dewey “didn’t do anything wrong that a lot other firms don’t do, they just did all of them to an extreme,” says MacEwen.

Click here for video link.

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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