Posts on ‘December 12th, 2008’

Cleary Gottlieb has landed a lead advisory role as two leading French banks take up more than 5 billion euros’ ($6.7 billion) worth of state aid, in a deal that closed Thursday. The Wall Street firm acted for European banking giant BNP Paribas and France’s largest retail bank, Crédit Agricole, as they issued 2.55 billion euros’ and 3 billion euros’ worth of securities, respectively. The securities were issued to an entity established by the French state as part of plans to aid its stricken banks.

General Motors shareholders won’t get rich from a $303 million settlement that could be finalized this month, but lawyers may reap millions. Attorneys want 19 percent of the cash pool for their work — nearly $60 million — and that’s brought some controversy. The Pennsylvania State Employees’ Retirement System filed an objection this week, saying the fee request equals $2,310 an hour. The case began with lawsuits in 2005 accusing GM and its directors of major accounting mistakes and misleading investors.

The bulk of law department budget cuts next year will be targeted toward outside law firms, according to respondents to a national survey by Altman Weil. Bringing more work in-house is the method of choice for 65 percent of GCs, and 50.5 percent will require more alternative fee arrangements, the survey showed. But the market turn could be a growth opportunity for those firms with slightly lower rates that could be an attractive alternative to general counsel.

Gone are the days when due diligence meant reviewing a resume and examining public records. Today, a witness, juror, expert or business prospect is more likely to have a social networking site than a criminal conviction. Don’t miss out on the benefits of this new information arena.

In a reversal of policy, the New Jersey Supreme Court has given its blessing to judges’ participation in ’s annual survey of American law schools, out of concern that its gag order was giving schools in the state a bum rap. Four years ago, the judiciary issued a directive calling it inappropriate for judges to complete and send in the questionnaire, which asks academics, judges, attorneys general and hiring partners to rate law schools on a 1-to-5 scale.

An attorney well known for representing Holocaust survivors has been disbarred after he neglected to pay sanctions imposed by a federal judge in a multibillion-dollar lawsuit against Bank Austria Creditanstalt and others. Thursday, a New York appellate court held that Edward Davis Fagan’s failure to pay the bulk of a $5,000 sanction and all of the nearly $350,000 in fees owed to Bank Austria, his “pattern of prior sanctions for unprofessional conduct” and “lack of contrition” made him unfit to practice law.

A prosecutor Thursday more than tripled, to $380 million, the sum the
government says attorney Marc Dreier, founder of Dreier LLP, has stolen
from hedge funds and investors. Arguing successfully that Dreier should
be held without bail while a full accounting of his assets is pursued by
a court-appointed receiver, Assistant U.S. Attorney Jonathan Streeter
called Dreier the “Houdini of impersonation and false documents.” Based
on what Streeter said Thursday in court, Dreier could face additional
charges.

The 2nd U.S. Circuit Court of Appeals, in a recent case of first
impression, considered whether a securities fraud complaint brought by
foreign plaintiffs against foreign issuers based on foreign stock
purchases — a set of circumstances sometimes dubbed a “foreign-cubed
securities case” — could be heard by a U.S. federal court. The answer
provided by the 2nd Circuit: under the right circumstances, yes.
Chadbourne & Parke’s Douglas R. Jensen analyzes the ruling.

Rutgers University GC Jonathan Alger has built a reputation as a legal expert on affirmative action and an ardent champion of diversity. He also has a long-standing interest in employment law. As Alger recently told in-house lawyers at a seminar, their companies’ new employees may request accommodations on a smorgasbord of issues: mental conditions, religious beliefs, sexual orientation and emotional well-being. “These are the claims that are coming your way,” he warned, “if they haven’t already.”

Given that much of today’s economic turmoil is the product of a crisis of confidence, future reforms likely will address a lack of confidence in America’s corporate boardrooms. While it is impossible to predict what regulatory fruit the crisis will bear, there are corporate governance principles that public and private boards of directors should apply as prudent practices even before a new administration and Congress move to Washington, say attorneys David B. Gail, Mary R. Korby and Michael A. Saslaw.