Bloomberg News

Stroock, Paul Hastings, Simpson Thacher: Business of Law (1)

May 30, 2013

Stroock & Stroock & Lavan LLP opened a Washington office with two new partners, national security lawyer Christopher Griner and Robert E. Plaze, former deputy director of the U.S. Securities and Exchange Commission’s division of investment management.

Griner, who will be managing partner of the Washington office, was most recently at Kaye Scholer LLP, where he was chairman of their national security/Committee on Foreign Investment in the U.S. practice for 22 years and a former managing partner of that office.

A Washington office “is a logical expansion of the firm,” Stroock’s co-managing partners Stuart Coleman and Alan Klinger said in a statement. “Chris Griner is both an exceptional lawyer and a skilled manager, and his renown in national security/CFIUS compliance presented an opportunity to add a market-leading practice area that complements Stroock’s strengths in areas such as private M&A, government relations, energy, project finance and financial services regulation.”

Plaze, who has been at the SEC for 30 years, is one of eight corporate partners with principal responsibility for the representation of almost 800 mutual funds, closed-end funds, ETFs or business development companies as well as investment advisers, industry service providers and unregistered pooled investment vehicles, according to his firm bio.

“Bob Plaze is widely regarded as a key architect of many of the rules governing regulated investment advisers, investment companies and private fund advisers,” Stuart Coleman, who heads Stroock’s investment management group said in a statement. “His work has shaped the modern regulation of the asset management industry in so many different ways.”

Stroock has 750 employees in New York, Miami and Los Angeles.

Deals

Paul Hastings, Simpson Thacher on $4.72 Billion Shuanghui Deal

Paul Hastings LLP and Troutman Sanders LLP are serving as legal counsel to Shuanghui International Holdings Ltd., China’s biggest pork producer, which agreed to acquire Smithfield Foods Inc. (SFD:US) for about $4.72 billion to boost supplies for the nation that’s the biggest consumer of the meat. Simpson Thacher & Bartlett LLP and McGuireWoods LLP were legal advisers for Smithfield. Paul Hastings also advised Shuanghui on the financing associated with the transaction.

The Paul Hastings team on the transaction was led by Raymond Li, partner and chairman of Greater China. Paul Hastings chairman of global merger and acquisitions Carl Sanchez; finance partner Michael Chernick; and global trade partner Scott Flicker led the Paul Hastings team in the U.S.

The Hong Kong M&A team was led by partner Vivian Lam. Partners from the Washington, New York, Los Angeles, London and Paris offices of Paul Hastings also included Hamilton Loeb, Thomas Mounteer, Todd Duffield, Erika Collins, Mario Ippolito, Jeff Pellegrino, Charles Patrizia, Steve Harris, Alexander Lee and Pierre Kirch, Garrett Hayes and C. Scott Hataway.

Simpson Thacher is representing Smithfield Foods with a team led by corporate partners Rob Spatt and Patrick Naughton. Additional partners include Andrea Wahlquist, ECEB; Kevin Arquit and Peter Thomas, regulatory; Gary Mandel, tax; Lori Lesser, IP; and Alden Millard, banking and credit. Beijing partner Shaolin Luo and Hong Kong partner Leiming Chen also worked on the deal.

Troutman Sanders’s Richmond partners R. Mason Bayler Jr., David I. Meyers and Coburn R. Beck worked on the deal.

MaguireWoods partners David N. Oakey, Steven D. Kittrell and James M. Anderson III also worked on the deal.

Skadden is advising Barclays, financial adviser to Smithfield Foods, Inc. The Skadden team was led by New York-based mergers and acquisitions partners Paul Schnell and Neil Stronski.

Shuanghui, parent of Henan Shuanghui Investment & Development Co. (000895), will pay $34 a share for the Smithfield, Virginia-based producer, both companies said yesterday in a statement. The price represents a 31 percent premium over The May 28 closing share price.

Smithfield shareholder Continental Grain Co. has been pushing for a change at the meat producer in the last few months. Smithfield should consider splitting into three businesses -- one selling pork and packaged meats, another that runs hog farms, and a third based outside the U.S. -- because the unprofitable hog-raising unit hurts returns, Continental Grain said in a letter in March. The shareholder’s request came after Smithfield’s stock trailed Hormel Foods Corp. (HRL:US) and Tyson Foods Inc. (TSN:US)’s in the prior year.

A deal is likely to face scrutiny by the Committee on Foreign Investment in the U.S., said two people familiar with the situation who asked not to be identified because the information is private.

The deal is valued at $7.1 billion including debt, according to both companies. That would make it the largest Chinese takeover of a U.S. company, according to data compiled by Bloomberg.

For more, click here.

Shearman Advises Service Corp. in $1.4 Billion Deal for Stewart

Shearman & Sterling LLP is representing Service Corp. International (SCI:US), an operator of funeral homes and cemeteries, which agreed to buy Stewart Enterprises Inc. (STEI:US) in a deal valued at $1.4 billion. Jones Walker LLP served as legal adviser to Stewart in connection with the transaction. Latham & Watkins LLP served as legal adviser to Frank B. Stewart Jr., chairman of the board of directors, in connection with the transaction.

The Shearman team included New York mergers and acquisitions partners John Marzulli and Robert Katz, as well as partners: Doreen Lilienfeld, executive compensation and employee benefits; Dale Collins, antitrust; Jessica Delbaum, antitrust; Jonathan DeSantis, capital markets; Robert Evans, capital markets; and Michael Shulman, tax.

Jones Walker partners included Dionne M. Rousseau, lead transaction counsel; Mark A. Cunningham and David G. Radlauer, lead antitrust counsel; Amy G. Scafidel, lead finance counsel; Kelly C. Simoneaux, lead executive compensation counsel; Timothy P. Brechtel, lead benefits counsel; and Allen E. Frederic III, corporate and securities counsel.

Latham lawyers advising Frank B. Stewart Jr. included a corporate deal team from the firm’s Los Angeles office led by partners Paul Tosetti and Jason Silvera.

Fried, Frank, Harris, Shriver & Jacobson LLP is representing Goldman Sachs, financial adviser to the special committee of Stewart’s board of directors. The Fried Frank team included corporate partners John Sorkin and Gus Atiyah.

The offer of $13.25 a share is 36 percent more than Stewart Enterprises’ closing price May 28. The acquisition has been approved by the boards of both companies, according to a statement yesterday.

Stewart Enterprises, founded in 1910, runs funeral homes in 24 states and employs 5,000 people, according to its website. The combination is expected to have pro forma revenue of almost $3 billion and generate about $60 million in annual cost savings, the companies said.

Service Corp. owned and operated 1,437 funeral homes and 374 cemeteries in 43 states as of March 31, according to the statement.

American Realty Capital to Buy CapLease in $2.2 Billion Deal

Proskauer Rose LLP is acting as legal counsel to American Realty Capital Properties Inc. (ARCP:US), which agreed to buy CapLease Inc. (LSE:US) in a deal valued at $2.2 billion, including debt, as it seeks to expand its holdings of single-tenant commercial properties. Hunton & Williams LLP is legal counsel to CapLease. Miles & Stockbridge PC is Maryland counsel to ARCP and Venable LLP is Maryland counsel to CapLease.

The Proskauer legal team is led by real estate capital markets group co-head/partner Peter Fass and mergers and acquisitions group partner Daniel Ganitsky, and includes partners: Andrew Bettwy, corporate; Ira Bogner, employee benefits; Steven Lichtenfeld, co-head of the real estate capital markets group; and Les Loffman, tax.

Hunton & Williams legal team included partners: Steven M. Haas and G. Roth Kehoe, II, mergers and acquisitions; and Mark C. Van Deusen, tax.

Venable’s partners who worked on the deal are Christopher Pate and Sharon Kroupa.

American Realty agreed to pay $8.50 a share for CapLease’s common stock, or about $755 million, according to a regulatory filing (ARCP:US) May 28 from the New York-based real estate investment trust. That’s 20 percent higher than the closing price of $7.10 on May 24. CapLease preferred shares will be converted into the right to receive $25 a share in cash plus accrued dividends.

CapLease, based in New York, owns real estate across the U.S. ranging from single-tenant office buildings to distribution centers. Its largest tenants include the federal government, Aon Corp. and Kroger Co., according to the filing. The acquisition (ARCP:US), which is expected to be completed in the third quarter, will add more than 70 properties to American Realty’s portfolio, bringing its total to about 800.

American Realty intends to assume about $580 million of CapLease’s $1.2 billion in debt and and repay the rest, according to the filing. The cost of paying the preferred shares and the balance of the debt is equal to about $879 million, said Anthony DeFazio, an American Realty spokesman with outside firm DDCworks.

The deal is expected to add about 11 cents a share to American Realty’s adjusted funds from operations, and the REIT plans to increase its dividend (ARCP:US) by 3 cents a share. Almost all of CapLease’s senior management will join the new company.

For more, click here.

News

Obama Said to Pick Former Bush Official Comey as Next FBI Chief

President Barack Obama plans to nominate James B. Comey, a deputy attorney general under President George W. Bush, to become the next FBI director, according to two people briefed on the selection.

Comey, 52, was general counsel at Lockheed Martin Corp. (LMT:US) and then hedge fund Bridgewater Associates LP after he left the government. Most recently he was appointed to the board of London-based bank HSBC Holdings Plc (HSBA) as a nonexecutive director.

Obama chose Comey over Lisa Monaco, his counterterrorism and homeland security adviser who was chief of staff to current FBI Director Robert S. Mueller, said the people, who asked not to be identified because the move hasn’t yet been announced.

Comey, a University of Chicago-trained lawyer, served as acting attorney general in 2004 at a critical juncture in the Bush administration.

Attorney General John Ashcroft was hospitalized, and Bush’s White House advisers were attempting to persuade Ashcroft to reauthorize a warrantless surveillance program. Comey, with Mueller, went to his hospital room to intercept the White House aides seeking Ashcroft’s approval. Ashcroft said he had concerns about the legality of the plan and deferred the decision to Comey, who refused the request.

In testifying before the Senate Judiciary Committee in 2007, Comey called the experience “the most difficult time in my professional life.”

After Comey, Mueller and other top Justice Department officials threatened to resign if the program was reauthorized without their sign-off, it was revised.

Following his service in the U.S. attorneys’ offices in New York City and in Virginia, Comey was deputy attorney general from December 2003 to October 2005.

Comey is a senior research scholar and Hertog Fellow on National Security at Columbia University Law School in New York, according to a statement from HSBC in January. The bank named him to a committee to combat financial crimes after paying $1.92 billion to settle money-laundering probes.

He recently stepped down from his post at Westport, Connecticut-based Bridgewater Associates after three years and worked from 2005 to 2010 as a senior vice president for Bethesda, Maryland-based Lockheed Martin. While at the Justice Department, he led the President’s Corporate Fraud Task Force.

Comey served from 2002 to 2003 as U.S. Attorney for the Southern District of New York.

For more, click here.

Rothstein Law Firm Bankruptcy Disclosure Statement Approved

The bankruptcy disclosure statement for the law firm of disbarred Florida attorney Scott Rothstein, who ran a $1.2 billion Ponzi scheme that’s the largest in Florida history, was approved by a judge.

U.S. Bankruptcy Judge Raymond B. Ray, who is overseeing the liquidation of Rothstein’s law firm in Fort Lauderdale, gave the approval yesterday and set a confirmation hearing for July.

Several groups of investors opposed the plan by current trustee Herbert Stettin, which included a settlement with Toronto-Dominion Bank. The plan would bar investors from suing TD Bank and halt pending state-court lawsuits against the bank.

Stettin’s plan included a provision for TD Bank, Canada’s second-largest lender, to pay as much as $72 million to remove the threat of litigation over claims it aided Rothstein’s fraud. Rothstein is serving 50 years in prison.

TD Bank, based in Toronto, previously reached settlements requiring it to pay $263.7 million to investors, and lost a $67 million verdict in the only case to go to trial.

“My clients will be cheated out of their claims,” said Harley Tropin, attorney for a group of creditors that oppose the trustees plan. “TD Bank is paying them because of people like Bill Scherer, Harley Tropin and David Mandel and their fear of facing us in a jury trial.”

Bill Scherer represents 80 investors claiming $228 million in losses. Tropin claimed one group of clients that he represents could lose as much as $360 million and potential claims against TD Bank, including punitive damages and interest. David Mandel represented creditors that won punitive damages in a trial against TD Bank.

The creditors committee, which opposed the previous plan, supported the amended plan yesterday, as did several other creditors who had opposed it earlier.

“We just don’t understand why creditors are objecting to a plan that gives them a hundred percent in a Ponzi scheme,” said Michael Goldberg, the attorney for the creditors committee.

Chuck Throckmorton, another attorney for creditors opposed to the plan, said that TD Bank should disclose whether it is the subject of a criminal investigation as part of the plan. “The creditors have a right to know that,” he said.

Rothstein’s Ponzi scheme was run from his Fort Lauderdale law firm and involved wealthy investors buying stakes in what he said were payouts in confidential sexual-harassment and workplace-bias cases.

The cases were fabricated. Rothstein used forged court documents and phony bank records to sell the scheme to investors, including hedge funds and South Florida businessmen. At least 10 people, including Rothstein’s wife, were convicted of crimes.

TD Bank was sanctioned in August by a federal judge in Miami who said it “willfully” concealed evidence relevant to the trial over whether it aided the Ponzi scheme. She ordered a finding that the bank’s fraud alerts and monitoring systems were “unreasonable and that TD Bank had actual knowledge of Rothstein’s fraud.”

The bankruptcy case is In re Rothstein Rosenfeldt Adler, 09-bk-34791, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale). The criminal case is U.S. v. Rothstein, 12-cr-60204, U.S. District Court, Southern District of Florida (Fort Lauderdale).

For more, click here.

Moves

Three Venable Partners Join McKenna’s White Collar Practice

McKenna Long & Aldridge LLP announced that Nancy Grunberg, Treazure Johnson and George Kostolampros join the firm as partners in the white collar and criminal defense practice in Washington. The three join from Venable LLP where Grunberg served as co-head of the SEC and white collar defense practice group.

“As MLA continues to focus on strategic growth, we are thrilled to bring this talented team of securities litigators on board,” Jeff Haidet, chairman of MLA said in a statement. “The exceptional SEC experience that Nancy, Treazure, and George each bring to the firm will further support and expand the services we provide to our clients.”

Grunberg previously spent nine years with the SEC during two separate tenures, the second as assistant director in the division of enforcement, the firm said. Johnson and Kostolampros also worked at the SEC, as senior assistant chief litigation counsel and senior counsel in the division of enforcement respectively.

Prior to joining the firm, all three have represented clients in SEC and criminal securities investigations, as well as advised individuals and businesses in criminal and regulatory investigations and prosecutions in the areas of securities fraud, bank fraud, health care fraud and public corruption.

MLA has more than 575 attorneys and public policy advisers in 16 offices and 13 markets.

Jones Day Hires Two Banking and Finance Partners in Chicago

Jones Day announced that Loren Weil and Matt O’Meara joined the Chicago office as partners in the global banking and finance practice. Both were previously with Winston & Strawn LLP where they were partners in that firm’s banking practice.

Weil concentrates his practice on corporate finance transactions. He has represented financial institutions in secured and unsecured loan transactions in connection with sponsored acquisitions and other leveraged buyouts, recapitalizations, and senior debt facilities established for large corporate and middle market borrowers, the firm said.

O’Meara concentrates his practice on corporate finance transactions with a particular focus on large and middle-market leveraged buyout transactions. He also has experience advising on financing structures including cash flow, asset based, and mezzanine finance transactions.

Since opening in 1987, the Chicago office of Jones Day has grown to more than 170 lawyers. The firm has more than 2,400 lawyers at 36 offices worldwide.

Seyfarth Hires Trio of Partners for Corporate, Litigation Work

Seyfarth Shaw LLP announced today the addition of three partners to the New York office across several practices. Rajiv Khanna joins the firm’s corporate department from K&L Gates LLP, Edward Maluf joins the firm’s litigation department from Bingham McCutchen LLP and Philip Smith joins Seyfarth’s litigation department from Patton Boggs LLP.

Khanna focuses his practice on domestic, cross-border and multijurisdictional M&A transactions, corporate finance, project finance and real estate. Maluf’s practice includes general commercial litigation, with a primary focus on copyright, trademark, trade dress, and false advertising work. Smith’s practice focuses on securities litigation; SEC investigations and enforcement matters; and other complex commercial litigation, the firm said.

Seyfarth’s New York office has about 125 attorneys. The firm has more than 800 attorneys at 12 offices in the U.S., London and Shanghai.

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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