Bloomberg News

Cleary Client Family Dollar in Takeover: Business of Law

July 29, 2014

For Ethan Klingsberg, a partner at Cleary Gottlieb Steen & Hamilton LLP, Dollar Tree Inc. (DLTR:US)’s deal to acquire client Family Dollar Stores Inc. (FDO:US) for about $8.5 billion was the culmination of more than four years of representation.

Following Nelson Peltz and Trian Fund Management LP’s initial interest in Family Dollar in 2010, a trio of activists - - Bill Ackman, John Paulson and Carl Icahn -- all bought stakes and put pressure on the company to be sold. Ackman sold his shares in 2012.

Klingsberg said that his firm, adviser Morgan Stanley and Family Dollar’s general counsel Jim Snyder, helped fend off the activists by taking a measured approach.

“One school is to characterize activists as enemies and to do everything we can to crush them. But we took a balanced approach,” he said in a telephone interview yesterday. “We won’t represent activists, but we won’t sit in the boardroom to say we’ll just crush them. It’s not honest and it’s not helpful.”

Among the measures the company took: adopting a poison pill in 2011; adding Edward Garden, a founding partner of Trian, to the Family Dollar board later that same year after a “standstill agreement” was reached; “changing the bylaws to give the board sufficient advance notice in the event of a consent solicitation, and beefing up information that any insurgent running a proxy contest would have to supply to the company to ensure transparency,” Klingsberg added.

Wachtell, Lipton, Rosen & Katz corporate partners Dan Neff and Trevor Norwitz led the team representing Dollar Tree. Also on the deal were partners David Schwartz, antitrust; David Kahan, executive compensation and benefits; Eric Rosof, restructuring and finance; and T. Eiko Stange, tax.

In addition to Klingsberg, the Cleary partners representing Family Dollar were Paul Tiger, mergers and acquisitions; Amy Shapiro, financing; Nick Grabar, securities; and Brian Byrne, antitrust.

As part of the deal, Dollar Tree will pay $74.50 a share in cash and stock, 23 percent above Family Dollar’s closing price at the end of last week, according to a statement from the companies yesterday. Including debt, the deal has a value of about $9.2 billion.

Among the deal’s terms is a so-called naked no vote, which provides that “if the shareholders decide they don’t like the deal and vote it down, Family Dollar will pay the lower of $90 million or reimburse Dollar Tree’s out-of-pocket expenses,” Klingsberg said.

For more on the deal, click here.

Sports News

Michele Roberts Elected NBA Players Union Executive Director

Michele Roberts, a partner at Skadden, Arps, Slate, Meagher & Flom LLP, was elected executive director of the National Basketball Players Association, becoming the first woman to lead a major U.S. sports union.

Roberts, a Washington-based trial lawyer was chosen at the union’s annual summer meeting in Las Vegas. She was selected from more than 300 candidates, the union said in an e-mailed statement.

Roberts got 32 of 36 votes cast on the first ballot by National Basketball Association team player representatives and the nine-member executive committee, union spokesman Dan Wasserman said.

“On behalf of the NBA, I would like to congratulate Michele Roberts on her appointment as the NBPA’s new executive director and look forward to working with her and the NBPA Executive Committee to ensure the continued health and growth of our game,” NBA Commissioner Adam Silver said in a separate statement. “The partnership between our players and teams is the backbone of the league, and we are eager to continue working with the Players Association to build this relationship.”

Her election to run the union ends a tumultuous 18-month leadership vacuum created by the ouster of Billy Hunter. The other finalists for the job were Dallas Mavericks Chief Executive Officer Terdema Ussery and technology industry advocate Dean Garfield.

For more, click here.

Lawsuit News

Goldman Sachs Denies ‘Boys’ Club’ Sex-Discrimination Claims

Goldman Sachs Group Inc. (GS:US) denied allegations that it discriminated against women on pay and tolerated a “boys’ club” atmosphere featuring excessive drinking and trips to strip clubs with clients.

“To be clear: Goldman Sachs does not tolerate discrimination of any kind,” the firm said in court papers filed July 25 in Manhattan federal court rejecting claims by two former female employees, Cristina Chen-Oster and Shanna Orlich.

The New York-based company is opposing a request by the two women to expand their suit to represent a class of more than 2,300 current and former female associates and vice presidents who worked at the bank over the past decade.

Chen-Oster and Orlich sued in 2010, claiming to have expert statistical analyses that show a pattern of discrimination against women in earnings and promotions. They also said Goldman Sachs harbors a work environment where women are treated as “second-class employees.”

The case is Chen-Oster v. Goldman Sachs & Co., 10-cv-06950, U.S. District Court, Southern District of New York (Manhattan).

Virginia Gay Marriage Ban Thrown Out by U.S. Appeals Court

Virginia’s ban on gay marriage is an unconstitutional violation of equal rights, a federal appeals court said in a ruling extending a series of court victories from coast to coast for supporters of same-sex unions.

The finding yesterday in Richmond, Virginia, is the third federal appellate decision extending marriage rights to same-sex couples and upholding lower-court decisions. A court in Denver last month and this month refused to revive bans on gay marriage struck down in Utah and Oklahoma.

The case is part of a stream of litigation over state bans playing out against the backdrop of a June 2013 Supreme Court decision that threw out part of a federal law that had barred the U.S. from recognizing same-sex marriages.

For more, click here.

Firm News

Ropes & Gray, Paul Weiss Among Firms Adding to Their Ranks

Marc P. Berger, a federal prosecutor who helped lead the crackdown on insider trading and other corporate and financial fraud cases, joined the New York office of Ropes & Gray LLP as a partner in the firm’s government enforcement practice. He previously served as chief of the Securities and Commodities Fraud Task Force in the Manhattan U.S. Attorney’s Office.

Elizabeth Sacksteder, formerly a deputy general counsel at Citigroup Inc. (C:US), joined Paul, Weiss Rifkind, Wharton & Garrison LLP as a partner in the litigation department. Sacksteder will be based in New York and focus on complex litigation and regulatory matters, the firm said in a statement. Mark Costiglio, a Citigroup spokesman, declined to comment on the move.

Kaufman Dolowich & Voluck LLP announced that Louis Castoria has joined the firm as a partner in San Francisco and director of the firm’s West Coast professional liability practice group. Previously, Castoria was chairman of the specialty professional risks practice group, co-chairman of the securities industry practice group and founding member of the accountants, insurance/reinsurance and commercial services practice groups at Wilson Elser Moskowitz Edelman & Dicker LLP.

Additionally, Iram P. Valentin rejoined Kaufman Dolowich as a partner in Hackensack, New Jersey. He focuses on professional liability defense, financial services litigation and complex civil litigation. He rejoined the firm from Gonzo Law Group, where he was a shareholder in the firm’s Hackensack office.

Holland & Knight LLP announced the addition of two partners, Howard Trickey and Matthew Singer, to its litigation practice group in Anchorage, Alaska. They focus on complex commercial litigation, employment defense, environmental and appellate work. Both were previously partners at Jermain, Dunnagan & Owens PC in Anchorage.

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Joe Schneider


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Companies Mentioned

  • DLTR
    (Dollar Tree Inc)
    • $66.39 USD
    • 0.52
    • 0.78%
  • FDO
    (Family Dollar Stores Inc)
    • $78.99 USD
    • 0.41
    • 0.52%
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