An appellate court in New York last week rejected one theory underlying a malpractice claim against Cadwalader, Wickersham & Taft LLP over a commercial mortgage-backed securitization, or CMBS, while letting another stand.
The case involved a Nomura Asset Capital Corp. 1997 CMBS worth about $1.8 billion, in which one of the underlying loans went into default. Cadwalader had, according to the court’s Feb. 13 opinion, “acted as securitization counsel for many of Nomura’s securitizations, drafted the relevant documents and rendered legal opinions.”
Nomura sued in 2006 and a lower court refused to dismiss the case. On appeal, the court rejected Nomura’s claim that Cadwalader “failed to provide appropriate legal advice,” but sent back to the lower court the question of whether the firm had conducted adequate due diligence on the appraisals of the underlying loans.
The court held that, based on industry practice, “Cadwalader had no generalized duty to review the underlying appraisals for all of the loans in the securitization.” The court said there remained an issue of whether there were any “red flags” that would have required the firm to investigate further.
Beth Taylor, Cadwalader’s general counsel, said in a telephone interview yesterday that the firm is “pleased with the court’s decision.” Jonathan Hodgkinson, a Nomura spokesman, declined to comment on the ruling.
Cravath Swaine & Moore LLP represents Cadwalader in the case. Nomura is represented by Contantine Cannon LLP.
Separately, it was reported last week that New York State approved an agreement between bond insurer MBIA Inc. (MBI:US) and Nomura in which MBIA would pay Nomura $325 million to end claims related to other mortgage-backed securities.
The case is Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft LLP, No. 9697, New York State Appellate Division (Manhattan).
Latham, Wachtell Take Prominent Role in Actavis-Forest Deal
Heading the Latham team were corporate partners Scott Shean and Charles Ruck in Orange County, California, and Stephen Amdur in New York. Also on the deal were partners Wesley Holmes. capital markets; and Daniel Seale, finance, both in New York, tax partners Laurence Stein in Los Angeles and Nicholas DeNovio in Washington, and benefits and compensation partner James Barrall in Los Angeles.
Representing Forest from Wachtell are corporate partners Andrew Brownstein and Igor Kirman, along with partners Jeremy Goldstein, executive compensation and benefits, Eric Rosof and Gregory Pessin, restructuring and finance, Jodi Schwartz and T. Eiko Stange, tax.
Skadden, Arps, Slate, Meagher & Flom LLP partners Steven Sunshine in Washington and Ingrid Vandenborre in Brussels advised Actavis on antitrust issues. Partner Steven Newborn of Weil, Gotshal & Manges LLP’s Washington office provided Forest with antitrust advice.
Partners Abigail Bomba and Philip Richter of Fried, Frank, Harris, Shriver & Jacobson LLP acted as counsel to Greenhill & Co. (GHL:US) which advised Actavis, and Simpson Thacher & Bartlett LLP partnersCaroline Gottschalk and Rob Spatt represented JPMorgan Chase & Co., (JPM:US) the financial adviser to Forest.
For more on the deal, click here.
Law Firm Moves
Lehman Bankruptcy Judge to Join Morrison & Foerster in March
James M. Peck, the U.S. bankruptcy judge who presided over Lehman Brothers Holdings Inc.’s Chapter 11 case, will join Morrison & Foerster LLP in March.
Peck, a bankruptcy judge in Manhattan since January 2006, will become co-chairman of the law firm’s global Business Restructuring & Insolvency Group. The Wall Street Journal reported Peck’s move earlier.
In addition to Lehman, Peck oversaw cases of companies including Iridium Operating LLC (IRDM:US), Charter Communications Inc. (CHTR:US) and Extended Stay America Inc. (STAY:US) Peck also acted as a mediator in bankruptcy cases involving American Airlines Inc. (AAL:US), Syms Corp., MF Global Holdings Ltd., General Motors Corp. (GM:US) and Residential Capital LLC, which Morrison & Foerster represented.
“In the last six years, we have seen the most complex cross-border and domestic bankruptcy and insolvency matters in history,” Larren M. Nashelsky, Morrison & Foerster’s chairman, said in a statement. Peck “will add a wealth of expertise to our practice,” he said.
Peck said in the statement announcing his move that he looks “forward to continuing to do in private practice what I did on the bench –- working on world-class domestic and cross-border cases and engaging in complex mediation matters.”
Separately, Morrison & Foerster said Steven Kaufmann, the past chairman of its global litigation practice, rejoined the firm as a partner resident in Washington and Denver. In 2010, President Barack Obama appointed Kaufmann chief of staff at Millennium Challenge Corp., an independent foreign aid agency established by Congress in 2004 that works to reduce poverty through economic growth.
Orrick, Manatt and Arnstein & Lehr Adding New Partners
William J. âButchâ Cullen and Janet A. Barbiere joined Orrick, Herrington & Sutcliffe LLP as partners in its structured finance practice group in New York. The two lawyers were most recently partners at Kaye Scholer LLP; they also previously were partners at Thacher Proffitt & Wood and Sidley Austin LLP.
Manatt, Phelps & Phillips LLP is adding Andrew Zimmitti as a partner in the litigation division in the firm’s Washington office. He joins from Patton Boggs LLP, where he was a partner in the banking and financial, commercial litigation and government investigations practice groups. Another Patton Boggs partner, Carol Van Cleef, who specializes in payment systems and virtual currencies, joined Manatt Feb. 12.
The Chicago firm Arnstein & Lehr LLP announced that James A. Hochman joined the firm’s real estate practice as a partner in the Chicago office. Previously, Hochman was a partner at Coman & Anderson PC and operated a private law practice in Wheaton, Illinois. He has been senior vice president and senior counsel to CB Richard Ellis for 22 years.
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