JD Journal » Lehman Brothers

Weil, Gotshal & Manges Advises MF Global UK Ltd. on First Filing of Special Administration Regime Application

rebneely — Fri, 04 Nov 2011 08:00:01 +0000

International law firm Weil, Gotshal & Manges is advising MF Global UK Ltd., the UK arm of commodities and listed derivatives broker MF Global, on the very first filing in recent days of the UK’s Special Administration Regime application.

This application comes after the voluntary chapter 11 filings made by its parent company, MF Global Holdings Ltd., a Delaware company listed on the New York Stock Exchange, and MF Global Finance USA Inc., an intermediate holding company.

Adam Plainer is leading Weil’s restructuring team, and he is working with Martin Pascoe QC and Daniel Bayfield of 3-4 South Square. The team applied for an expedited appointment of KPMG partners Michael Pink, Richard Fleming, and Richard Heis as special administrators of MF Global UK. Coinciding with the request, Weil was appointed as legal advisers to the Joint Special Administrators.

The introduction of the Special Administration Regime (SAR) came after the collapse of Lehman Brothers. The SAR provides a framework for dealing with insolvent or failing investment banks. It puts forth as special objectives for the administrators to ensure the return of client assets as soon as practicable; to ensure timely engagement with market infrastructure bodies and the authorities; and either to rescue the firm as a going concern or wind it up in the best interests of the creditors. Until recent days, the SAR had never been initiated.

The Weil team on this UK-sourced instruction is being led by the head of restructuring in the firm’s London office, Adam Plainer, assisted by Mike Francies, Paul Bromfield, Dominic McCahill, Steven Ong, Linton Bloomberg, Will Needham, Jodie Dunlap, Rosy Villar, Helen Jones, David Elphinstone, Lorena Wong, and Lewis Blakey.

Adam Plainer was quoted as saying in a press release at Weil’s website: “This is a truly groundbreaking case as it is the first time the new Special Administration regime has been used. The Administrators will be working closely with the FSA who have extensive powers under the new legislation.”

Mike Francies was quoted as saying: “From the time of the first meeting with MF Global UK on Friday, morning, Adam and the team have worked round the clock to help MF Global to stabilize this challenging situation in the UK. The ability to work with the Company, KPMG, Counsel and the FSA to initiate the SAR’s first application against the clock and in the current market conditions cannot be underestimated. This is a huge achievement in difficult circumstances.”

MF Global Holdings has been at the forefront of the news in recent weeks, as has CEO Jon Corzine. According to the November 2^nd businessweek.com article, “MF Global’s Jon Corzine Runs Out of Luck”, Corzine’s career included nearly a quarter century at Goldman Sachs (GS). Less than two years after his appointment as chairman and chief executive officer, the company is bankrupt.

According to the same article, Wall Street embraced the appointment of Corzine; MF Global shares increased 15 percent the week his hiring was announced. Now, Occupy Wall Street has replaced the hoopla, along with MF Global’s nearly $200 million quarterly loss, and the disclosure of over $6 billion in bets on European government bonds.

Simpson Thacher Practice Head Moving On

joshua — Wed, 07 Jul 2010 15:01:53 +0000

John G. Finley, head of Simpson Thacher & Bartlett’s global mergers and acquisitions team, is leaving the law firm to become chief legal officer of The Blackstone Group effective Sept. 1.

According to Simpson Thacher’s Web site, Finley has recently advised on the Lehman Brothers’ sale of its North American investment banking and capital markets businesses to Barclays Capital and he represented outside directors of Anheuser-Busch in connections with its combination with InBev in 2008.

Stephen Schwarzman, Blackstone’s chairman and CEO, called Finley “one of the most outstanding corporate lawyers of his generation.”

Blackstone is one of the world’s leading investment and advisory firms. Its financial advisory services includes mergers and acquisitions, restructuring and reorganization and fund placement.

Simpson Thacher & Bartlett is one of New York City’s oldest law firms and has more than 800 lawyers.

Latham Goes To Asia To Litigate

eric — Wed, 07 Jul 2010 00:34:25 +0000

Continuing with the ongoing trend among international firms to bolster their capability to successfully litigate in Asia, Latham & Watkinsannounced on Monday that it had launched an Asia litigation practice centered in Hong Kong. To spearhead the effort it has brought on Simon Powell, formerly from Jones Day’s Hong Kong Office, says AmLaw Daily.

London partner and vice-chair of global litigation said its approach to litigation was crucial and to be two-fold, “seeking out both high-end local representations as well as “export” work.”

In addition, Powell, himself, also foresees a change in the Asian regulatory climate which will stimulate a need for increased litigation.

Powell, qualified to practice in Hong Kong, most recently represented Lehman Brothers in Asia as special counsel. He provides advisory services to financial services in the region as well being one of the far East’s top insolvency and litigation experts. The Hong Kong office, one of Latham’s newest, forms part of the firm’s presence in Asia. It numbers among its Beijing, Shanghai, Singapore and Tokyo offices.

Latham & Watkins was founded in 1934 and has over 2000 attorneys and 30 offices around the world.

Morning Roundup

joshua — Wed, 19 May 2010 13:40:44 +0000

Good morning everyone! Today is Wednesday, May 19. Here’s a quick look back at yesterday’s posts.

Chadbourne & Parke Bring In IP Talent From GE and Disney…

Firms Reaping Cash Rewards Handling Dissolution Of Lehman Brothers…

BP Retains Kirland & Ellis To Aid In Spill Defense…

Gowdy Wins Landmark Supreme Court Decision…

DLA Piper Set to Open Istanbul Office June 1…

Firms Reaping Cash Rewards Handling Dissolution Of Lehman Brothers

eric — Tue, 18 May 2010 21:13:08 +0000

There is a lot of money to be made in bankruptcy proceedings, reports Bloomberg Businessweek, citing the ongoing dissolution of the now defunct Wall Street finance company, Lehman Brothers. Unfortunately, a lot of that cash is not going to the creditors, but rather to the lawyers cleaning up the mess of assets, toxic or otherwise, left behind after the firms collapse in 2008.

According to the Business Week post, the bankruptcy trustee, James Giddens, and his firm Hughes Hubbard & Reed earned nearly $85 million for just over a year and half’s worth of work. In addition, Alvarez & Marsal LLC, the liquidator of the parent company, has collected $262.2 million in fees almost in the same amount of time.

Knowledge of the often arcane and intricate steps of the dance known as bankruptcy law pays. In this case, the honor of working on the largest bankruptcy in history apparently has its perks, in spades, for the specialized team of lawyers necessary to manage it.

Weil Gotshal Nabs Former Senate Committee Special Counsel

joshua — Thu, 22 Apr 2010 16:07:58 +0000

Heath Tarbert, former special counsel to the U.S. Senate Committee on Banking, Housing and Urban Affairs, has joined Weil, Gotshal & Manges as counsel.

Tarbert was a lead expert and negotiator in Capitol Hill’s effort to enact comprehensive financial reform legislation that came in the wake of the economic meltdown. He provided a particular focus on prudential regulation of banks, thrifts, non-bank financial institutions and their holding companies, as well as measures aimed at the reduction of systemic risk in the U.S. financial system, the firm said in a press release.

Tarbert also served as associate counsel to President Obama from August 2008 to January 2009. He was at the center of the legal decision-making during the financial crisis that intensified after the collapse of Lehman Brothers in September 2008.

“Heath has made an invaluable contribution to the committee’s work on financial regulatory reform,” said Richard Shelby, ranking member of the Committee on Banking, Housing and Urban Affairs. “His expertise and dedication will be sorely missed. I am grateful for his service and wish him all the best as he takes on a new challenge.”

Tarbert is the third notable public figure to recently join Weil Gotshal. He follows the arrival of William Burck, former special counsel to the president and federal prosecutor, and Steven Tyrell, former chief of the U.S. Department of Justice’s Fraud Section.

Weil Gotshal’s Washington office was established in 1975 and has 30 partners and 81 attorneys.

Cha Ching! Weil Gotshal Earning Big Money in Lehman Case

joshua — Wed, 31 Mar 2010 23:11:45 +0000

Weil, Gotshal & Manges bills Lehman Brothers up to $1,000 an hour for its role as the company’s lead bankruptcy firm and, during a 17-month period that ended last month, the firm collected a total of $157.5 million in fees.

According to Bloomberg, Weil Gotshal charges $990 an hour for the use of its U.S.-based attorneys and $1,000 an hour for it top lawyers abroad. The rates were set Jan. 1 and were revealed in a regulatory filing submitted yesterday in U.S. Bankruptcy Court in Manhattan.

Although such rates are not unprecedented, they certainly are at the top end of the spectrum, according to Stephen French, managing partner of Legalbill, which provides companies with analysis of legal costs.

“A thousand dollars an hour is high by any measure,” French told Bloomberg.

Weil Gotshal partner Harvey Miller is the main lawyer for Lehman and he declined to comment on the story. According to a March 2009 court filing, Weil Gotshal charged a top rate last year of $950 for U.S. lawyers and $1,170 for overseas partners, Bloomberg reports.

Lehman Brothers reported assets of $639 billion when it filed for bankruptcy in September 2008. It is in the process of liquidating to pay off its creditors. According to Bloomberg, there have been no major objections into what advisers such as Weil Gotshal are being paid.

Lehman Brothers Collapse Detailed in Report by Jenner & Block LLP

joshua — Fri, 12 Mar 2010 14:59:54 +0000

After a year of arduous investigation, Anton Valukas and his Chicago based law firm, Jenner & Block, LLP, have produced a 2,200 page report regarding the bankruptcy of Lehman Brothers Holdings.

The bankruptcy court appointed Valukas as an examiner to investigate what led to Lehman’s collapse and determine whether creditors could bring claims against Lehman’s estate or former officers.

The report details evidence that Lehman employed “balance sheet manipulation” by utilizing an accounting practice known as “Repo 105”. Essentially, directly before a reporting period, Lehman would enter into an arrangement to sell and then repurchase financial assets. These would normally be classified as “transactions”. However, by adding a cash element Lehman was able to classify them as “sales”. This allowed Lehman Brothers to portray a false picture of financial health.

In The Times Mar 12 article, Valukas was quoted as saying, “Unable to find a United States law firm that would provide it with an opinion letter permitting the true sale accounting treatment under United States law, Lehman conducted its Repo105 programme under the aegis of an opinion letter the Linklaters law firm in London.”

Russo Leaves Patton Boggs for AIG

joshua — Tue, 02 Feb 2010 23:03:51 +0000

Thomas Russo has joined AIG as general counsel and vice president of legal, compliance, regulatory and government affairs. Russo is the former general counsel of Lehman Brothers who most recently served as general counsel at Patton Boggs.

Russo was offered the job at AIG earlier this month. He arrived at Patton Boggs following Lehman’s bankruptcy in 2008. AIG was saved from collapse by a $180 billion bailout from the federal government.

“I am excited to participate in a process at AIG to both repay the funds owed the U.S. taxpayers and to continue to have a company in which all employees and stakeholders will be proud,” Russo said in a statement.

AIG is an insurance and financial services provider with operations in 130 countries and jurisdictions.

Thomas Russo Offered GC Job at AIG

joshua — Tue, 12 Jan 2010 02:00:39 +0000

AIG has extended an offer letter to Patton Boggs senior counsel Thomas Russo for the position of general counsel. Russo, who was general counsel at Lehman Brothers during its 2008 bankruptcy, is expected to accept pending talks between AIG and the Treasury Department’s pay czar, Kenneth Feinberg.

AIG is looking for a new GC after Anastasia Kelly left the firm over pay cuts imposed by Feinberg. AIG is currently holding $180 billion in government investments.

Law Firm Hirings & Firings

Erik Even — Mon, 24 Aug 2009 22:24:48 +0000

Recent laterals and layoffs in the legal sector:

Stuart Levy joins Sughrue Mion as of counsel in the firm’s electrical/mechanical practice group in Washington, DC. Levy spent 37 years at the Patent & Trademark Office. Most recently, he was an administrative patent judge with the Board of Patent Appeals & Interferences. His JD is from from the George Mason University School.

Conard Metcalf joins Simmons Browder Gianaris Angelides & Barnerd as of counsel. He specializes in asbestos and mesothelioma cases. His JD is from the University of Colorado Law School, where he was a member of the Law Review.

Lloyd Winans joins Alston & Bird as a partner in New York, in the financial services group. Previously, he was general counsel at Lehman Brothers. His JD is from The Dickinson School of Law in Carlisle, Pennsylvania.

Akerman Senterfitt Adds 8 to Consumer Finance Group

Erik Even — Wed, 03 Jun 2009 20:48:06 +0000

Florida’s Akerman Senterfitt has brought on eight attorneys for its Consumer Finance Litigation practice group.

Charles Townsend joins from Bank of America as a Shareholder in Dallas. He was a Senior Vice President and Assistant General Counsel at the bank. He brings with him associate Joshua Bennett.

Shari Turkish joins from Aurora Loan Services as Of Counsel in Denver. She was a Vice President and Legal Counsel at the Lehman Brothers subsidiary. Turkish brings along associates Victoria Edwards and Luke Sosnicki.

Donald Scotten joins from Countrywide Home Loans as Of Counsel in Los Angeles.

Michael Starks joins from Holland & Knight as Of Counsel in Orlando.

And Jason Bates joins the Tampa office as an associate.

Akerman Senterfitt was founded in 1920, and has grown to become one of the largest law firms in the United States. In 2008, the National Law Journal ranked the firm as 92nd largest in the US by number of attorneys, and the second-largest Florida-based firm.

Nomura Lays Off 10 In-House Lawyers

Erik Even — Fri, 01 May 2009 16:27:52 +0000

Japanese industrial and financial conglomerate Nomura has cut up to 12 legal positions in London.

The firm took over dissolved Lehman Brothers’ European and Middle East equities & investment banking operations, leading to redundancies. Lawyers at both Lehman and Nomura were targeted.

The Tokyo bank expects more cuts.

The Nomura Group saw its beginnings in Osaka in 1919. The group is involved in numerous industries, from oil and gas to construction, chemicals and foodstuffs. It is best known internationally as a financial powerhouse.

Proskauer Rose’s Profits Fall 10% in 2008

Erik Even — Mon, 23 Feb 2009 22:03:46 +0000

Am Law 100 firm Proskauer Rose’s profits per equity partner dropped 10% in 2008 to $1.4 million.

Revenues increased marginally, by 1%, to $634 million. Revenue per lawyer dipped slightly to $916,000.

Total headcount attorney rose slightly from 685 in 2007 to 692 in 2008. The number of equity partners was up two in 2008; 10 new non-equity partners also joined.

Unlike most Am Law 100 firms, Proskauer’s financial year ends October 31st, so the numbers only cover about a month and a half of the financial crisis prompted by Lehman Brothers’ mid-September collapse.

Despite this, the firm’s performance in November and December was roughly in line with the previous six months.

In 2008, Proskauer Rose added an office in Hong Kong, and announced plans to launch in Beijing. The firm also added a Chicago office following the hire of a three-partner insurance litigation team from Mayer Brown.

In December, the firm cut 35 associates and 25 administrative staff.

Clifford Chance to Cut Partners, Lay Off 106 Lawyers

Erik Even — Wed, 04 Feb 2009 17:15:36 +0000

Clifford Chance LLP, the world’s largest law firm by revenue, will cut its partnership ranks under a restructuring plan.

The firm has asked partners to contribute £60 million ($87 million), about £150,000 each, and will cut as many as 80 lawyers in London and 26 in the US.

London-based Clifford Chance has more than 600 partners.

Linklaters LLP, the second-largest London law firm by revenue, said last month it would cut as many as 120 salaried lawyers and up to 150 support staff.

Eversheds LLP, a London-based firm with about 2,000 lawyers, is withholding quarterly profit drawings to partners.

Clifford Chance advises some of the world’s largest banks, and clients have included Royal Bank of Scotland Group, Barclays, Banco Santander, and bankrupt Lehman Brothers.

Profits Up at Weil Gotshal

Erik Even — Tue, 03 Feb 2009 17:10:27 +0000

Gross revenue at Weil, Gotshal & Manges rose slightly in 2008.

The New York-based firm brought in $1.23 billion, up 4.75% from 2007. But revenue per lawyer was down 2% to just over $1 million.

Weil was able to shift lawyers and resources to restructuring and related practices in the second half of the year, when corporate work was down. The firm’s restructuring group grabbed headlines over Harvey Miller’s prominent role in Lehman Brothers’ $639 billion bankruptcy.

Profits per equity partner were up 7.5% to $2.3 million, while the number of equity partners splitting the pie shrank for the second year in a row, from a high of 200 lawyers in 2006 to 184 in 2008.

Overall head count is up to 1,190 lawyers worldwide.

The firm handled several notable bankruptcy matters last year, including the filings for specialty retailer The Sharper Image, energy trading company SemGroup and discount clothing chain Steve & Barry’s.

South Korean Blogger Jailed Without Bail

todd — Tue, 20 Jan 2009 03:59:38 +0000

He goes by the username “Minerva,” after the Greek goddess of wisdom. He rose from anonymity in South Korea, for accurately predicting the current economic crisis. He even predicted the collapse of Lehman Brothers.

Now, the 31 year old Park Dae-Sung, is charged with going too far in an online discussion. He stated that the government had banned major financial institutions and trade businesses from purchasing U.S. dollars in an attempt to strengthen the local currency. Prosecutors are calling his information inaccurate and saying that it disrupted the foreign exchange market.

He was arrested last week, which sparked a debate about freedom of speech on the Internet and in South Korea. South Korea is considered to be one of the most technologically savvy nations in the world.

Dae-Sung had regularly denounced the method by which his government handled the economy and made regular, mostly negative, predictions about the future. He is speculated to be an economic expert and his identity was hotly debated in his home country.

He has been denied bail. Dae-Sung’s lawyer said he did not intend to harm the public.

Dae-Sung could spend up to five years in prison or be fined up to 50 million won (US$36,360).

Cleary Gottlieb Clearly Did Well in 2008

Erik Even — Sat, 17 Jan 2009 20:45:23 +0000

New York-based international law firm Cleary Gottlieb Steen & Hamilton saw both revenue and profits per partner rise in 2008.

Gross revenue rose 8% to $965 million, and profits per partner increased about 12% to $2.4 million.

But revenue per lawyer was basically flat, down less than 1%.

Nearly half the firm’s lawyers are overseas, helping to cushion the blow from the dramatic slowdown in the United States

Cleary advised the SEC and Federal Reserve Bank of New York during the collapse of Lehman Brothers. It then advised Barclays in its acquisition of Lehman Brothers’ North American investment banking and capital markets businesses.

The firm employs over 900 lawyers globally.

Sidley Austin Charges $1100 Per Hour in Tribune Bankruptcy

Erik Even — Tue, 30 Dec 2008 20:13:56 +0000

Sidley Austin lawyers are asking as much as $1,100 an hour for bankruptcy work on Tribune Company, surpassing the rates charged by Weil, Gotshal & Manges in the Lehman Brothers case.

Tribune, the Chicago-based newspaper publisher, filed for bankruptcy on December 8th.

The company sought court approval to pay Sidley’s bankruptcy group $575 to $1,100 an hour for partners, $400 to $875 an hour for counsel and senior counsel, $240 to $650 an hour for associates, and $95 to $385 an hour for paraprofessionals.

“That’s the highest hourly rate I have seen or heard of for a bankruptcy lawyer,” said Lynn LoPucki, professor of bankruptcy law at the University of California Los Angeles.

Weil Gotshal partners charge $650 to $950 an hour on Lehman, which filed the biggest bankruptcy in history September 15th with $613 billion in debt.

In the year before its bankruptcy, Tribune paid Sidley almost $3 million in fees, plus $52,000 in expenses for restructuring work and preparation of filings. Those sums were taken out of advance retainers of $4.5 million.

Via Bloomberg.

Paul Hastings Associate Charged in Insider Trading Scheme

Erik Even — Fri, 19 Dec 2008 18:29:32 +0000

An associate of Los Angeles’ Paul, Hastings, Janofsky & Walker was charged in a $4.8 million insider trading scheme involving a former Lehman Brothers representative and his wife, who worked at a public relations firm that had information on impending corporate deals.

Eric A. Holzer, 34, a Paul Hastings tax associate, was allegedly recorded discussing the scheme with Matthew C. Devlin, 35, of Lehman Brothers, whose wife, Nina Devlin, is a partner at the public relations firm Brunswick Group.

Matthew Devlin has already pleaded guilty in the case and is cooperating with prosecutors.

The criminal complaint against Holzer was one of three unsealed in the Southern District of New York, charging conspiracy and securities fraud.

An additional civil suit filed by the Securities and Exchange Commission details illegal trading on 13 impending transactions that Mr. Devlin learned about from his wife.

Devlin allegedly referred to his wife as the “golden goose” for the information she provided, information the SEC said he used to curry “favor with his friends and business associates and received in return cash, luxury items and other benefits.”