Hughes Hubbard Lands Three 2012 Aviation 'Deals of the Year'
Hughes Hubbard provided legal counsel on three transactions that were named 2012 “Deals of the Year” by Airfinance Journal, the leading financial intelligence source for the aviation industry.
The prestigious awards recognize significant and groundbreaking transactions that have tested participants and raised efficient funding for the borrower. According to the magazine, “these deals have each pushed the envelope, either by their size, complexity or their success in execution.” The winners were announced at an awards ceremony in New York on April 22 and in the April edition of Airfinance Journal.
“We are very pleased to be recognized for our efforts in these complex and innovative transactions,” said Steven Chung, the lead Hughes Hubbard partner on the three deals. “It was an honor to have had the opportunity to work with all the parties involved to achieve these milestones.”
In the “Innovative Deal of the Year,” Hughes Hubbard represented Goldman Sachs as bookrunner and structuring agent in a $587.5 million transaction involving Emirates and Doric. This was the first enhanced equipment trust certificate (“EETC”) relying on the A380 as collateral, and the first EETC to rely on Cape Town Alternative A rather than Section 1110. Chung and partner John Hoyns worked on the transaction with counsel Andrew Fowler and associates Brian Liu, Arinze Ike, Chris Fickes, Jason Kaplan, Valerie Clark, Christine Lamsvelt and Julie Hanus. Partners Andy Braiterman, Spencer Harrison and counsel Alex Anderson advised on tax and ERISA issues.
In the “Capital Markets Deal of the Year,” Hughes Hubbard assisted Goldman Sachs as arranger in connection with Guggenheim Partners’ purchase of $1 billion worth of aviation loans from AerCap Holdings, one of the largest aircraft leasing companies in the world. The HHR team included Chung, Fowler, Liu, Braiterman, Harrison, Anderson and counsel Jim Delaney.
In the “Equity Deal of the Year,” Hughes Hubbard helped Wells Fargo, one of the nation’s largest banks, launch a new aircraft leasing joint venture with Dublin-based Avolon, an international aircraft leasing firm. In addition to Chung, Braiterman, Anderson, Fickes, Lamsvelt and Liu, the HHR team that worked on this deal included partners Ken Lefkowitz, Chuck Samuelson, Amanda DeBusk, Chris Paparella, Ethan Litwin and associates Jason Kaplan, Robyn Morris, Benjamin Britz, Morgan Feder, David Hoftiezer and Melissa Duffy.
“We are proud to be recognized for our first-class work and commitment to helping our clients reach new heights,” said Hoyns, chair of Hughes Hubbard’s Equipment Finance group. “These awards are a testament to Hughes Hubbard’s position at the forefront of the world’s premier aviation law practice groups.”
U.S. Bankruptcy Judge Approves Lehman Brothers Inc. Settlements
New York, April 16, 2013—U.S. Bankruptcy Judge James M. Peck of the Southern District of New York today approved three interrelated orders settling all intercompany claims between Lehman Brothers Inc. (LBI) and Lehman Brothers International (Europe) (LBIE), and LBI and Lehman Brothers Holdings Inc. (LBHI). Hughes Hubbard & Reed’s bankruptcy group represented the LBI Trustee, James W. Giddens, chair of Hughes Hubbard’s Corporate Reorganization Group, in negotiating and resolving disputes with Lehman Brothers Holdings LBHI and LBIE. These settlements are among the largest in history and together resolve more than $100 billion in claims and dispositions of property.
“All retail customers of LBI were made whole in the first days of the liquidation, and with these agreements, we expect to satisfy the remaining valid affiliate, institutional and hedge fund customer claims,” said James W. Giddens, Trustee for liquidation of LBI under the Securities Investor Protection Act (SIPA). “The reduction of affiliate claims in this, the largest and most complex bankruptcy in history, is a milestone for customer protection. Distributions to the remaining customers will begin once the Court’s orders are final and the agreements are effective.”
The settlement agreements provide a final resolution of all legal and factual issues regarding intercompany relationships between LBI and LBHI and between LBI and LBIE, avoiding the need for costly litigation. The agreement between LBI and LBIE is also subject to an order by the English High Court.
The Hughes Hubbard team is led by partners James B. Kobak, Jr. and Christopher Kiplok. Hughes Hubbard partners Jason Benton, Steven Luger, Michael Salzman, Neil Oxford and David Wiltenburg, and former Hughes Hubbard partner Ken Lee of Levine Lee LLP, among others from the Hughes Hubbard Corporate Reorganization Group and the Litigation and Corporate Departments all played significant roles.
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No.1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Helps Pfizer Derail Fen-Phen Suit
Hughes Hubbard delivered a victory to Pfizer and Wyeth Pharmaceuticals when a district judge blocked a member of a nationwide fen-phen class action settlement from pursing product liability claims against the drugmakers in Pennsylvania state court.
On April 2, U.S. District Judge Harvey Bartle III in Philadelphia ruled that Linda Milo could not proceed with her lawsuit because she did not provide reliable evidence to win the right to sue over the restrictions of the settlement.
Milo was a member of a nationwide class-action settlement reached in 2000 as part of federal multdistrict fen-phen litigation that largely prohibited class members from suing Wyeth for all diet drug-related injuries.
One exception allows class members to sue Wyeth if they can demonstrate that they developed primary pulmonary hypertension (“PPH”) – abnormally high blood pressure in the arteries of the lungs that can lead to heart disease and failure – through the use of diet drugs. Under the settlement agreement, to qualify for the PPH exception, a class member must produce cardiac catherization tests showing both a mean pulmonary artery pressure of greater than 25 mmHg and a pulmonary artery wedge pressure of less than 15 mmHg.
Milo argued that, while she had no test that cleared that second hurdle, a test in 2007 still qualified for the exception because her doctor reported another measurement – left ventricular end-diastolic pressure (“LVEDP”) at 15 mmHg.
But Judge Bartle agreed with HHR that Milo could not substitute one measurement for another to satisfy her burden. “In sum, plaintiff has failed as a threshold matter to meet the requirements…of the settlement agreement,” Judge Bartle wrote in his opinion.
Ted Mayer, Robb Patryk, Mike Tiger, Eric Blumenfeld, Carole Nimaroff, Kevin Braker, John Turrettini and Christina Migally represented Pfizer.
Hughes Hubbard’s Bankruptcy Team Reaches Major Agreement With JPMorgan
New York, March 20, 2013
— Hughes Hubbard & Reed’s bankruptcy group represented the MF Global Inc. Trustee, James W. Giddens, chair of the Hughes Hubbard Corporate Reorganization Group, in negotiation of a comprehensive settlement agreement with JPMorgan Chase Bank N.A., which will result in over $546 million being made available for the former customers and creditors of the failed dealer broker.
The sweeping deal, if approved, will enable Giddens to recover most of the money that disappeared when the brokerage failed in October 2011, becoming the eighth-largest bankruptcy in U.S. history. It also marks the end of an exhaustive investigation into JPMorgan’s potential liability to MF Global in the bank’s role as a main custodian of customer property.
Under the terms of the agreement, JP Morgan will pay $100 million to be made available for distribution to former MF Global customers. The bank will also release its retained interest in $417 million in funds that were previously returned to Giddens. And JPMorgan will return a final $29 million in funds held by the bank to secure potential obligations under certain credit agreements.
The Hughes Hubbard team representing Giddens in this matter are partners James B. Kobak Jr., Christopher Kiplok, Jeffrey Coleman and associates Dustin Smith and Gabrielle Glemann.
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No. 1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite” – the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Achieves Asylum for Persecuted Gay Belizean
Hughes Hubbard successfully represented a gay Belizean man in obtaining asylum in the United States on the basis that he was at risk of persecution in his home country. The U.S Citizenship and Immigration Services (“USCIS”) granted the client’s application for asylum on March 26, 2013.
The 24-year old client came to the U.S. in May 2011 to escape persecution he experienced in Belize, a Central American country where homosexuality remains a crime punishable by imprisonment. After receiving the case from Immigration Equality, Hughes Hubbard attorneys worked with the client to compile evidence documenting the mistreatment, discrimination and ostracism the client experienced before coming to the U.S.
In Belize, the client was physically attacked and harassed in school for being perceived as gay; his teachers and the police turned a blind eye. And after he came out to his family, they disowned him and kicked him out of his home. Worried for his physical safety if he were forced to return to Belize, the client sought asylum in the U.S., where he now hopes to live openly and without fear of being persecuted.
The client was represented by Danny Grossman, Quan Trinh and Chris Wild, who conducted the fact-gathering interviews and drafted the supporting documents, with supervision from Hagit Elul and assistance from Meaghan Gragg. After learning that the USCIS had granted his asylum application, the client said that he had been nervous for weeks and that he could not have obtained asylum without the help of his attorneys.
United Continental Issues $1.05B of Bonds to PBGC
Hughes Hubbard recently represented United Continental Holdings Inc. (“UAL”), the parent of United Airlines, in connection with amendment and restatement of $777 million principal amount of bonds that UAL issued to the Pension Benefit Guaranty Corporation upon UAL’s exit from bankruptcy in 2006.
The outstanding bonds were converted into three series of new bonds with an aggregate principal amount of approximately $1.05 billion and including terms more favorable to UAL than the original bonds.
UAL, through United and United Express, carried more passenger traffic in 2012 than any other airline in the world. UAL has the world’s most comprehensive global route network and operates more than 5,500 daily flights to more than 375 U.S. and international destinations.
John Hoyns, Arinze Ike and Alison Peyser worked on the deal for UAL.
HHR Attorneys Author Article on Social Media Challenges
Charles Cohen and Ignatius Grande co-authored an article, “The New Constants – Death, Taxes and…Social Media?” that Bloomberg BNA published on April 2.
In the article, Cohen and Grande discuss how the increased use of social media platforms by businesses has created new challenges for companies and their counsel.
“Social media presents new and challenging information management issues,” they wrote. “Many companies not only permit their employees to use social media, but encourage it. Records managers now need to account for social media just as they need to account for other means of communication.” What is more, “[s]ocial media can also present ethical pitfalls for every participant in the legal process, including attorneys, judges and juries.”
Click here to view the full article.
Hughes Hubbard Engineers 167M Euro Loan for Malian Cotton Company
HHR represented a pool of banks led by HSBC France and Banque de Developpement du Mali (“BDM”) in negotiation and documentation of a 167 million euro commodity financing facility to Compagnie Malienne de Développement des Textiles (“CMDT”), the Malian state-controlled company, which produces and exports Mali’s cotton.
The transaction, which closed March 1, involved the preparation and negotiation of various documents, including the credit facility and the security package. The security package included the pledge over the cotton held by a third depositary at ports of West African countries, and a guaranty letter issued by the ministry of finance of Mali.
The transaction involved 18 banks comprising local African banks and offshore banks. CMDT plans to use the proceeds to pay the farmers, the ginnery cotton and the transportation of cotton to port areas.
Created in 1974, CMDT has played a critical role in the country’s cotton success story by actively promoting, managing and controlling all key phases in the cotton value chain.
Sena Agbayissah and Agnes Braka-Calas represented HSBC and BDM on this transaction.
Hughes Hubbard Assists in Sale of Colorado Hotel
HHR represented a hotel company in connection with the sale of a hotel in Colorado that has hosted many celebrities and politicians over the last two decades. The purchaser was a national real estate investment firm.
The December transaction included negotiation and documentation of the hotel purchase and sale agreement, as well as a post-closing leaseback of the property for a necessary transition period.
The HHR team also worked with local counsel on a variety of issues in connection with the transfer of the existing liquor license to the purchaser and modification of easement agreements related to the hotel’s signage and other services.
The HHR team consisted of Bill Weber, Jose Bermudez and Gisela Munoz.
Hughes Hubbard Helps Nikon Expand Presence in Bioscience Field
Hughes Hubbard represented Nikon Corp., Japan’s third-biggest camera maker, in connection with its investment in subsidiaries of Vibrant Holdings, a California biotech company that has developed a peptide array for diagnosing Celiac diseases and allergies, more commonly known as gluten intolerance.
The project is another opportunity for Nikon, a global leader in digital imaging, precision optics and photo imaging technology, to expand its presence in the bioscience field by developing and marketing new equipment for the diagnosis of disease and other medical conditions.
Peter Langenberg and Brian McEvoy represented Nikon in the transaction.
Hughes Hubbard Attorney Honored by Florida Bar for Pro Bono Work
Hughes Hubbard associate Rebecca Sosa received the 2013 Florida Bar Young Lawyers Division Pro Bono Service Award at a ceremony held before the Florida Supreme Court.
Each year, the Florida Supreme Court and The Florida Bar recognizes extraordinary lawyers for their efforts above and beyond the call of duty to serve the legal community and Florida as a whole. The Young Lawyers Division Pro Bono Service Award is presented to a young lawyer who best exemplifies the highest ideals of public service and who has made outstanding contributions to those in need of legal services.
Paige A. Greenlee, president of the Young Lawyers Division, who presented the award, emphasized Sosa’s long-term dedication to pro bono work and congratulated her on committing such a substantial amount of time serving those in need of legal services. Greenlee highlighted the breadth of Sosa’s pro bono work, such as reproductive rights and human rights work with Burmese refugees in Thailand, immigration work with victims of domestic violence and Social Security benefits of posthumously conceived children. Greenlee quoted Elizabeth Sanchez-Kennedy, an attorney at Catholic Charities of Greater Miami, who has worked closely with Sosa. “Rebcca’s dedication changed the lives of her clients in a remarkable way…Rebecca’s role as a pro bono attorney has impacted the immigrant community on a large scale and should be given recognition.”
In her remarks, Sosa thanked the firm for providing the essential support and encouragement to do this very important and meaningful work. Sosa described how rewarding it was to work with pro bono clients and see them transform as they overcame their legal and personal obstacles. She encouraged attorneys to continue to get involved and support pro bono work in any way they can. “Everyone can play a part; everyone can make a dramatic change in other people’s lives, and in their own lives as well, through pro bono work,” she said.
Sosa’s recognition drew coverage in the Daily Business Review and the Florida Trend. Florida Supreme Court Justice Barbara Pariente also sent Sosa a personal letter to congratulate her for the award.
Click here to view the press release.
Hughes Hubbard Paves Way for Nonprofit to Build Affordable Housing
Hughes Hubbard, working together with Legal Services of Greater Miami, represented an affiliate of the Opa-locka Community Development Corporation (“OLCDC”), a Florida not-for-profit corporation, in negotiation and documentation of a joint venture with an affiliate of The Related Group, a major developer of luxury condominiums and other commercial properties.
The joint venture’s purpose is the acquisition, construction, development and equipping of an affordable housing development project in Opa-locka, Florida – one of the poorest cities in the country.
The six-story building with 127 units of affordable housing will be strategically located within Opa-locka’s downtown district. This new mid-rise gated building designed for the elderly community is within walking distance to the city’s tri-rail station. It will serve as one of the main drivers in a citywide effort to spark economic development and increase the tax base, while improving the quality of life for residents of Opa-locka.
The units will have insulated hurricane-impact windows and energy-efficient fixtures and appliances, while enjoying state-of-the-art amenities, such as a multi-purpose room, laundry facility, computer and library facility and a park-like landscape setting.
About a third of the families in Opa-locka, mostly African-Americans and Hispanics, live below the poverty line. Opa-locka also has one of the highest crime rates in the country. The OLCDC hopes that the project, called Town Center Apartments, will serve as a redevelopment catalyst for Opa-locka’s downtown district and, in particular, the city’s elderly population.
The OLCDC, Miami-Dade County Housing Finance Authority, Miami-Dade County Public Housing and Community Development and Bank of America contributed over $19.5 million in funds for the project through several financing instruments, including revenue bonds sold to a group of investors led by Raymond James. The investors receive federal tax credits in connection with their investment in the project.
On March 13, The Related Group, the OLCDC, and city officials celebrated the commencement of construction of Town Center Apartments. The day’s event featured speeches from Opa-locka Mayor Myra Taylor and Miami-Dade County Commissioner Barbara Jordan, among others.
Emilio Saiz, Alex Anderson, Samantha Williams and Michael Youssef represented the clients under the supervision of Federico Goudie, William Weber and Gisela Munoz.
Hughes Hubbard Pilots $30M Loan to Air Lease for Airbus A320
Hughes Hubbard represented Cathay United Bank (“CUB”), one of the largest commercial banks in Taiwan, as lender in a $30 million secured loan financing for one new Airbus A320-200 aircraft that will be leased to China Eastern Airlines, one of the country’s top three carriers.
A special purpose subsidiary of Air Lease Corporation (“ALC”), one of the fastest growing aircraft leasing companies in the world, served as borrower for the November transaction while ALC fully guaranteed the obligations of the borrower.
The secured loan has a tenor of approximately six years; the operating lease term is 12 years. The transaction was the first of its kind between CUB and ALC, as ALC seeks to expand its pool of relationship banks to include financial institutions in East Asia, one of its fastest-growing markets.
Steve Chung, Alex Anderson, Brian Liu, Jason Kaplan, Robyn Morris and Christine Lamsvelt worked on the deal for CUB.
Guggenheim's $350M Deal With AerCap Cleared for Takeoff
Hughes Hubbard cleared the runway for global financial services firm Guggenheim Partners LLC to purchase $1 billion worth of aviation loans from AerCap Holdings N.V., one of the largest aircraft leasing companies in the world.
Under the terms of the Nov. 14 transaction, Guggenheim acquired AerCap’s equity interest in Aircraft Lease Securitization Limited (“ALS”), an asset-backed securitization vehicle with an aircraft portfolio valued at approximately $1 billion. The portfolio is leased to 26 different airlines. AerCap completed the transaction by transferring 100 percent of its interest in the equity securities issued by ALS to a subsidiary of Guggenheim for approximately $350 million.
“We believe that aviation finance is an attractive investment sector and this transaction provided a compelling investment opportunity for a segment of our clients,” said Scott Minerd, chief investment officer of Guggenheim.
As part of the agreement, AerCap will remain as servicer of the portfolio following the transfer, and will pay Guggenheim an 8 percent coupon on the purchase price until December 2016 or when the ALS debt securities are paid in full. Following repayment of the ALS debt securities, AerCap will receive 20 percent of the ALS portfolio cash flows on a pro rata basis until an amount equal to the aggregate coupon payments has been repaid in full to AerCap. Goldman Sachs acted as agent and arranger for AerCap on the transaction.
The HHR team included Steve Chung, Andrew Fowler, Brian Liu, Andy Braiterman, Jerry Harrison, Alex Anderson and Jim Delaney.
Hughes Hubbard Helps Gay Dominican Obtain 'Life-Saving' Asylum
Hughes Hubbard successfully helped a gay, HIV-positive Dominican man obtain asylum in the U.S. on the basis of his well-founded fear of persecution in his home country. The client’s application for asylum was granted in March.
Working with Immigration Equality, Hughes Hubbard took the case of the 26-year-old man in July 2012. The client came to the United States in December 2011 to escape ongoing extortion, torture and false arrest by the police and armed groups in the Dominican Republic, where social, employment, and medical discrimination against gays and HIV-positive individuals is pervasive.
The evidence supporting the client’s application showed that from an early age he was harassed and ostracized by his teachers and peers based on his perceived homosexuality, despite his attempts to keep his sexuality discreet. He was frequently abducted by police and criminals alike, who targeted gays near nightspots and in Internet communities and forced them to pay to maintain their secrets. These abductions were often accompanied by beatings or acts of sexual aggression, often at gunpoint, and, in one instance, under gunfire.
After the client’s HIV diagnosis, the harassment he faced intensified. The Dominican Republic has long been accused of diverting international funds intended for prevention and treatment of the virus, and the client experienced firsthand doctors’ refusal to treat related conditions. Gossip in the gay community – in which there is discrimination against HIV-positive individuals – increasingly centered on the client. These issues finally came to a head when one tormentor spotted him at a treatment center identified with HIV patients. Realizing his secrets were no longer safe, he fled the country. His U.S. visa application included extensive international and non-governmental reports of persecution of gay and HIV-positive individuals in the Dominican Republic.
The client was represented by Christopher Szabla, with supervision from John Wood. On hearing the news that his application had been granted, the client said that asylum had “saved his life.”
Hughes Hubbard Helps Package $500M Loan for Cellulose Producer
Hughes Hubbard represented four internationally recognized financial institutions in connection with a $500 million senior secured trade-related facility agreement for the Brazilian producer and Macao trading subsidiaries of Sateri International Group. The internationally syndicated transaction closed in February.
The four institutions – ABN Amro, Banco Itau BBA, Mizuho Bank and Banco Santander – acted as joint lead arrangers and bookrunners, leading a group of 17 banks. Mizuho also acted as administrative agent and Union Bank as collateral agent. The $500 million financing consists of a five-year term loan tranche of $440 million and a revolving credit facility of $60 million.
The borrower is SC International Macao Commercial Offshore Limited and the guarantor is Bahia Specialty Cellulose S.A. (“BSC”), both subsidiaries of Sateri. Sateri will use the proceeds for general working capital and to pay off a $470 million syndicated loan from 2010 that had a balance of approximately $340 million at the end of last year.
Sateri, based in Hong Kong and Shanghai, is one of the largest specialty cellulose producers in the world, supplying more than 10 percent of the world’s dissolving pulp. Sateri produces different grades of high-purity dissolving wood pulp and viscose staple fiber, which are natural raw materials and key ingredients to everyday items such as textiles and industrial products. These products have benefitted from China’s increasing urbanization and consumption as demand for consumer goods has increased.
Through BSC, its Brazilian subsidiary, Sateri owns and operates its own renewable eucalyptus plantations. Its dissolving wood pulp mill has a design production capacity of 485,000 tons per year.
Amy G. Dulin, Emilio Saiz, Alex Anderson and Nyana Miller worked on the transaction.
Hughes Hubbard Garners Huge Win for ThyssenKrupp
Hughes Hubbard sealed a huge win for German steelmaker ThyssenKrupp when the U.S. International Trade Commission effectively revoked an antidumping duty order on corrosion-resistant carbon steel flat products (“CORE”) from Germany, a product primarily used for auto manufacturing.
On Feb. 15, all six members of the USITC agreed with HHR that revocation of the order would not likely lead to a continuation or recurrence of material injury to domestic steel mills within a reasonably foreseeable time.
As a result of the negative determination in this third review, the antidumping order on CORE from Germany, which has been in existence for 20 years, will finally be extinguished. The USITC also revoked an existing order on imports of the product from Korea.
The action came under the five-year “sunset” review process required by the Uruguay Round Agreements Act. The USITC instituted the reviews concerning CORE from Germany and Korea in January 2012. Three months later, the USITC voted to conduct full reviews.
The case marks the end of a litigious era. In 1993, the U.S. steel industry brought a conglomeration of trade cases seeking antidumping and countervailing duty orders for cold-rolled, hot-rolled, cut-to-length plate and corrosion resistant steel against 16 different countries. The USITC’s no-injury vote for Germany and Korea last month ended the last remaining steel antidumping orders started in the 1993 investigations.
HHR brought the challenge to the order on CORE from Germany in the third sunset review at the USITC. HHR conducted the case, start to finish, including gathering from ThyssenKrupp all the questionnaire responses (massive amounts of data); filing pre-hearing and post-hearing briefs; presenting hearing testimony from several witnesses; and delivering final comments.
The HHR team included Ken Pierce, Bob LaFrankie, Alex Hess and Cynthia Liu.
Hughes Hubbard Participates in $39M Sale of Aarding to CECO
Hughes Hubbard advised the shareholders of Aarding Thermal Acoustics Beheer B.V. on the U.S. legal aspects of its $39 million sale to CECO Environmental Corp., a leader in clean-air solutions for industrial processes and applications. The deal was announced March 4.
Netherlands-based Aarding is one of the world leaders in natural gas turbine exhaust systems and silencing applications. Aarding’s senior executives will remain in their roles.
“Becoming part of CECO will enable Aarding to greatly enhance our already strong products and geographic reach,” said Aarding President Martin Pranger. “In particular, we look forward to providing our customers with a greater breadth of system offerings for their downstream natural gas requirements and continuing to grow our revenues and presence globally. This is truly a great fit all around.”
Under the terms of the deal, Cincinnati-based CECO paid approximately $24 million in cash and $7.8 million in CECO shares on closing with a $7.2 million earn-out paid over a five-year period.
Jan Joosten and Christine Lamsvelt represented Aarding.
Hughes Hubbard’s Bankruptcy Group Leads on Two of the Largest Settlements in History
March 1, 2013 — Hughes Hubbard & Reed’s bankruptcy group represented the Lehman Brothers Inc. (“LBI”) Trustee, James W. Giddens, chair of the Hughes Hubbard Corporate Reorganization Group, in negotiating and resolving disputes with Lehman Brothers Holdings Inc. (“LBHI”), and Lehman Brothers International (Europe) (“LBIE”). The two agreements are among the largest settlements in history, and, if approved by the U.S. Bankruptcy Court, together resolve more than $100 billion in claims.
The resolutions resulted from years of arduous negotiations and commencement of litigation involving unprecedented legal issues and factual complexity involving the intercompany relationships among Lehman’s three principal worldwide businesses. The relationship between LBI and LBIE is widely recognized as the most complicated aspect of the entire worldwide Lehman collapse and among the single most challenging insolvency issues ever faced in a bankruptcy.
The Hughes Hubbard team is led by partners James B. Kobak Jr. and Christopher Kiplok. Hughes Hubbard partners Jason Benton, Steven Luger and Michael Salzman, and former Hughes Hubbard partner Ken Lee of Levine Lee LLP, among others from the HHR corporate reorganization, litigation and corporate departments all played significant roles. Click here to view the SIPC
press release and here to view the Lehman
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No.1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Helps Emirates Airline Launch $750M Bond
Hughes Hubbard helped Dubai’s Emirates airline, the world’s largest airline by international traffic, raise $750 million from the sale of 12-year bonds in January.
Final pricing for the amortizing bond was 300 basis points, or 3 percentage points, above the U.S. dollar seven-year, mid-swap rate. The senior unsecured notes are set to mature in February 2025. Emirates’ obligations under the notes rank equally with all of its other senior unsecured obligations. Emirates will use the proceeds of the offering for general corporate purposes.
The offering represents the second recent transaction where Emirates has successfully tapped the U.S. capital markets. In July 2012, Hughes Hubbard represented Goldman Sachs in a $587.5 million deal that enabled Emirates to lease aircraft from Doric Nimrod Air Finance Alpha Limited. The latest offering is an important new source of funding for Emirates.
The HHR team acting for the initial purchasers included Steve Chung, Andrew Fowler, Brian Liu, Valerie Clark and Julie Hanus.
Hughes Hubbard Helps Loews Hotels Form JV and Obtain Loan
HHR represented Loews Hotels & Resorts in the formation of a joint venture between affiliates of Universal Parks & Resorts and Loews Hotels & Resorts and in the subsequent negotiation of a syndicated construction loan for the development of a new hotel.
The new hotel will be located on the Universal Orlando campus and will be called the “Cabana Bay Beach Resort.” It is anticipated to have 900 rooms and 900 suites and will be the fourth hotel on the campus, adjacent to the Universal Orlando theme parks.
The joint venture transaction closed in September of 2012; the initial loan closed in mid-December 2012; and the syndication closing took place the following week. The HHR team included William A. Weber, Gisela M. Munoz, Jose V. Bermudez and Nyana Miller, who were assisted by Alex Anderson and Ross Lipman.
Hughes Hubbard Strengthens Aviation Practice with Additions of Jeffrey Tenen and Israel Sanchez in Miami
Miami, February 4, 2013—Hughes Hubbard announced today that Jeffrey S. Tenen has joined its Aviation Practice as a partner and Israel I. Sanchez has joined the group as counsel in the firm’s Miami office. Both lawyers were previously shareholders at Greenberg Traurig, P.A. The addition of the aviation duo follows the expansion of the Litigation Department in Miami with partner Rafael Cruz-Alvarez, who joined the office in January.
Tenen and Sanchez focus their practices on aviation industry matters. Tenen represents domestic and foreign air carriers, leasing companies and lenders on such matters as aircraft acquisitions, sales, leasing and financings (including export credit, manufacturer supported financings, mortgage financings and cross-border financing transactions), spares and engine financings and leases, aircraft operating lease transactions, progress payment financings, international development bank facilities, receivables and aircraft securitizations, fuel and currency hedging, comprehensive code share and marketing alliances, cargo handling agreements, computer reservation systems and similar agreements, commodity and service procurement agreements, airline mergers and acquisitions, regulatory matters before the Federal Aviation Administration and related corporate and commercial matters affecting airlines and leasing companies.
Sanchez has extensive experience in structuring, drafting and negotiating financing and leasing transactions (including tax-based leveraged and cross border leasing, synthetic leases and operating leases), workouts, restructuring and bankruptcy matters on behalf of banks, financial institutions, lessors, lessees, owner trustees, guarantors, manufacturers and transactions for purchasers and sellers of equipment (including commercial, regional, corporate and cargo aircraft, aircraft engines, spare parts and trucks). He also has deep knowledge in all aspects of financing and leasing of business jet aircraft and fractional interest ownership programs.
“Jeff and Israel are talented aviation lawyers with experience and skills that will benefit our clients,” said Aviation Practice Group Chair John K. Hoyns.
“We’re delighted to welcome Jeff and Israel to the Miami office,” added Nick Swerdloff, Office Managing Partner of Hughes Hubbard’s Miami office. “Their work for aviation industry clients in Latin America complements the kinds of matters our Latin America practice lawyers have been managing from Hughes Hubbard’s Miami office.”
“Israel and I are excited to join Hughes Hubbard’s dynamic aviation industry team,” said Tenen. “The firm’s practice strengths in corporate finance and Latin America will be great assets to our clients.”
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No. 1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Elevates Three Attorneys to Partnership and Elects Two to Counsel
New York, January 30, 2013—Hughes Hubbard & Reed LLP announced today that Savvas A. Foukas, Eric S. Parnes and Michael D. Tiger have been promoted to partner, effective as of January 1, 2013. Separately, Kenneth M. Katz and Jessica S. Studness have been elected counsel of the firm. Foukas and Tiger are litigators in the firm’s New York office and Parnes is a litigator in the Washington, D.C. office. Katz and Studness are both members of the Litigation Department in the firm’s New York office.
“Savvas, Eric and Mike are extraordinary litigators with consummate analytical skills and an unyielding focus on delivering excellence in all they do on behalf of our clients,” said Candace K. Beinecke, Chair of Hughes Hubbard. “Each is also a leader in his own right at Hughes Hubbard and in the wider legal community. We are delighted to welcome them to the partnership.”
Foukas has served in leading roles in major business cases, including complex and high-profile securities litigation and regulatory matters. After serving as a summer associate in Hughes Hubbard’s New York office, Foukas joined the firm in 2001 after graduating from Columbia University Law School where he was a Harlan Fiske Stone Scholar. He graduated from George Washington University, cum laude.
Parnes is well-respected for his extensive experience and insights concerning healthcare and pharmaceutical industries-related issues in addition to his skills as an appellate advocate and in internal investigations and regulatory matters. Parnes was a summer associate in 2001 and has been with Hughes Hubbard’s Washington office since graduating from Georgetown University Law Center, cum laude, in 2002. In law school, Parnes was Articles Editor of the Georgetown Law Journal. He graduated from the University of Maryland College Park.
Tiger has deep experience litigating complex, multi-jurisdictional matters in courts around the country. He has developed a particular strength in cutting-edge product liability matters. He has represented clients in “bet the company” pharmaceutical, environmental and financial litigations. Tiger served as a summer associate in Hughes Hubbard’s New York office, and began his career at the firm in 2001 following his graduation from Columbia Law School in 2001, where he was a Harlan Fiske Stone Scholar and Managing Editor of the school’s Journal of Law and Social Problems. He graduated, with distinction, from Cornell University.
Katz is a member of the firm’s Litigation Department in its New York office. His principal focus is on securities, accountants’ liability, and financial services litigation. Katz started with Hughes Hubbard in 2001 as a summer associate. He rejoined the firm after graduation in 2002 from the University of Pennsylvania Law School, cum laude, where he was an associate editor of the University of Pennsylvania Law Review. Katz graduated from the University of Virginia, with distinction.
Studness is also a member of the firm’s Litigation Department in New York. She has widespread experience in product liability defense, with a particular emphasis on regulatory issues affecting pharmaceutical companies. Studness joined Hughes Hubbard in 2003. She graduated in 2001 from Vanderbilt University Law School, where she was Professional Authorities Editor for the Vanderbilt Journal of Transnational Law. Studness is a graduate of Cornell University.
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No. 1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Assists in 2012's Biggest Merger Between Eaton, Cooper
The firm handled the international trade aspects of Eaton Corp.’s $13 billion purchase of electrical equipment supplier Cooper Industries – the largest U.S. acquisition of 2012, according to The Street. Eaton employs more 100,000 people around the world and is a global leader in power management and electrical systems.
The acquisition, which was first announced in May and officially closed Nov. 30, transforms Cleveland-based Eaton and Houston-based Cooper into one of the world’s largest companies. “The $13 billion acquisition of Cooper, the largest in Eaton’s 101-year history, is a transformational milestone that expands our market segment reach, broadens our portfolio of products, services and solutions, and strengthens our global geographic footprint,” Alexander Cutler, chairman and chief executive of Eaton, said in a press release. Cutler added that he expects integration of the two companies to take between two and three years, depending on business conditions.
Founded in 1911 to build truck axles, Eaton manufactures items, including electrical components, hydraulic products and aerospace parts. Cooper, founded in 1833, manufactures electrical components. New Eaton will create a wide range of products, including lighting, power grids, and hydraulic and transmission systems for aerospace and defense companies.
According to Bloomberg, Eaton’s purchase is the largest in at least a decade in miscellaneous manufacturing. In addition to Bloomberg and The Street, the deal drew headlines in The New York Times, The Wall Street Journal and other outlets.
Amanda DeBusk, Melissa Duffy and Cynthia Liu represented Eaton. They made numerous voluminous filings before the State Department’s Directorate of Defense Trade Controls to:
• Obtain approval for the merger
• Obtain registration for a new company
• Begin the process of transferring agreements and licenses to the new license holder.
The process of transferring agreements and licenses is complex and ongoing. Hughes Hubbard will be supporting Eaton throughout this regulatory process.
Hughes Hubbard Grows International Trade Practice with Addition of Partner Matthew Nicely
Washington, January 23, 2013—Hughes Hubbard announced today that Matthew R. Nicely has joined its International Trade Department as a partner in the firm’s Washington, D.C. office. Nicely was most recently a partner and head of the International Trade & Customs practice group at Thompson Hine LLP.
Nicely has been practicing international trade law for more than 20 years and has been integrally involved in many of the high-profile trade cases of the past two decades. He advises clients on the risks and opportunities presented by U.S. trade regulations as well as various international trade agreements. He has represented multiple industries in trade remedy proceedings (antidumping and countervailing duties, global and China safeguards) before administrative agencies, in appeals to U.S. courts, and in WTO dispute settlement. Nicely also counsels clients on compliance with day-to-day regulation of goods, services, and cross-border investments, including customs, export controls, economic sanctions, anti-boycott, and anti-bribery laws.
“Matt is well-respected by the International Trade Bar. He has the broad international trade knowledge and deep experience with antidumping and countervailing duties cases that our clients will value,” said International Trade Department Chair F. Amanda DeBusk.
“Hughes Hubbard is a leader in the field of international trade,” said Nicely. “I look forward to working with my new colleagues and our clients around the world.”
Nicely is admitted to the Bar of the District Columbia and an adjunct professor at American University’s Washington College of Law.
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No. 1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Participates in Clothing Drive for Homeless
For the third consecutive year, Allison Carle coordinated the participation of the firm’s Washington office in collecting used clothing and raising money for Gifts for the Homeless Inc. (“GFTH”) a nonprofit organization created by law firms to provide clothing for the homeless during the holiday season.
GFTH is the only coordinated effort by D.C.’s legal community to help the area’s homeless. This year the firm donated about 10 bags of clothing and other items and raised more than $200 to purchase new clothing for those in need during the clothing drive last month. The city-wide effort delivered more than 4,000 bags of clothing to nearly 70 shelters and other homeless service organizations during the first weekend of December.
Hughes Hubbard Helps Congolese Human Rights Lawyer Obtain Asylum
Hughes Hubbard represented a human rights attorney from the Democratic Republic of Congo on a pro bono basis in her application for asylum in the U.S. After an extensive waiting period due to bureaucratic complications unrelated to her case, she was granted asylum on Nov. 6, 2012.
The client specialized in representing victims of sexual violence in the Congo, and her work often implicated government officials, members of the armed forces and rebel groups. As a result, she received numerous threats against her life and her family suffered the consequences when her would-be attackers could not find her.
Due to her work, members of the military killed her mother in April 2011 and her uncle in January 2012. With years of threats finally escalating to violence, the client was forced to flee for her life to the U.S. in June 2011, and her husband and four children had to go into hiding. A month later, Congolese soldiers attacked the client’s home in Kinshasa, where they wounded and raped her younger sister once they realized that the client no longer lived there.
In February, the client was referred to HHR by Human Rights First, a nonprofit organization based in New York and Washington, D.C. Alia Khan and Cynthia Liu met with the client numerous times to develop the facts, prepare her application and prepare her for an interview in the Arlington Asylum Office in Virginia.
In July, the asylum officer conducting the client’s interview was moved to tears by her application, and felt it was not necessary to have the client relive the majority of her tale. The client explained why she felt her life would be endangered if she returned to Congo, and that protecting victims of sexual violence is what she feels she was put on earth to do.
Now that asylum has been secured, the HHR team is working with the client to apply to have her husband and children join her in the U.S. Throughout the entire process, the client has steadfastly volunteered with various women’s organizations and taken English lessons. Her English has now improved so significantly since her referral to HHR that a French interpreter is no longer necessary. She is thrilled to finally have permission to obtain employment legally in the U.S. “Thank you for your graciousness and help,” she told HHR in an email.
Robert Shapiro supervised the HHR team that included Khan and Liu. Associate Kyden Creekpaum and paralegals Matthieu Rossignol and Paul Henson assisted from the Paris office, and were instrumental in translating emails and documents into French and English. Additionally, they contributed significantly to research that was invaluable to the final brief that accompanied the client’s application. D.C. paralegal Alexandra Britton also played an important role assisting with translation and research. Catherine Rizzoni and Alexander Bedrosyan assisted with translation, and Esteban Munera assisted with filing the brief and exhibits.
Hughes Hubbard Assists Pro Bono Client in Regaining Welfare Benefits
A pro bono client regained his public assistance benefits after the firm won a “fair hearing” against the New York City Department of Social Services on Nov. 14, 2012. Fair hearings allow welfare recipients whose government benefits have been terminated, reduced or denied to have their cases reviewed by an administrative law judge.
In 2011, Michael Paul received a small inheritance when his mother passed away. The Department’s Bureau of Fraud Investigation (“BFI”) learned about the inheritance earlier this year and advised HIV/AIDS Services Administration (“HASA”) – the agency that administers Paul’s benefits – to terminate Paul’s assistance, based on the allegation that he transferred the inheritance funds away in order to qualify for public assistance. Paul requested a fair hearing and the firm, which received the case through the Beth Israel intake program, represented him there.
At the Oct. 11 hearing, Daniel Doeschner demonstrated that Paul had legitimately spent the entire inheritance within nine months, and that Paul no longer had the resources to support himself. The New York State Office of Temporary and Disability Assistance found that, while the BFI produced some evidence for its claim, it failed to produce evidence demonstrating that Paul actually transferred his resources in order to qualify for public assistance. Consequently, Paul’s benefits were restored and he will receive approximately $6,000 in back benefits – divided among rent, cash assistance and food stamps – that he lost as a result of his suspended benefits.
Lisa Cahill supervised the matter, and Shana Oppenheim assisted Doeschner in the preparation of Paul’s case.
Hughes Hubbard Facilitates Fareportal's Move to New Digs
As reported in the New York Law Journal, the firm paved the way for Fareportal Inc., one of the largest online travel groups in the country, to move its New York City-based headquarters one mile uptown to the Sports Illustrated Building.
Fareportal relocated in December from 213 W. 35th St., where it had been a tenant since 2004, to 135 W. 50th St., where it leases space on the fifth floor from investment firm AllianceBernstein.
“The move to 135 W. 50th St. represents an important milestone in our company’s history,” said Sam Jain, CEO and founder of Fareportal.
Founded in 2002, Fareportal has more than 1,800 employees and seven offices in four countries. More than 300 employees are now housed at its space at 135 West 50th Street. In addition to its Web-based portals, Fareportal provides other services such as travel offices, call centers, mobile applications and online sites reaching more than 15 million travelers who perform more than 30 million searches monthly.
Sam Sultanik and Jenny Liang represented Fareportal, which became a firm client through Beatrice Hamza Bassey.
Hughes Hubbard Secures Adoption, Legal Status Eligibility for Salvadorian Youth
The firm secured adoption and legal status eligibility for a 10-year-old boy who fled El Salvador to escape gang violence and join his mother and stepfather in suburban Washington, D.C.
On March 2, Judge Cathy Serrette of Prince George’s County Circuit Court granted both the stepfather’s petition for adoption and the boy’s motion for factual findings of Special Immigrant Juvenile Status (“SIJS”) eligibility. SIJS is governed by a special provision under U.S. immigration law for youths who cannot be reunited with one or both parents because of abuse, abandonment or neglect. HHR will now seek permanent residency for the boy from U.S. Citizenship and Immigration Services.
According to Kids in Need of Defense (“KIND”), this is the first case in Prince George’s County to link an adoption to SIJS.
In El Salvador, the boy’s life was in turmoil. His biological father was a member of the notorious MS-13 gang who reacted violently when the boy’s mother tried to end their relationship; the father was later murdered. The mother left the boy in the care of relatives and fled to the United States out of fear of the father’s threats. The relatives were also targeted by MS-13, resulting in two of the boy’s aunts fleeing the country and one of the boy’s cousins being kidnapped.
The cousin escaped from her kidnappers, but the growing dangers compelled the family to send both to the United States in early 2010. U.S. authorities detained the two at the U.S.-Mexico border, holding the boy until his grandmother flew from Virginia to get him.
The boy’s mother married a permanent resident after arriving in the U.S. Her husband wanted to adopt the boy.
In December 2011, Hughes Hubbard petitioned the Prince George’s County Circuit Court to grant adoption to the stepfather and make the necessary factual findings to permit the boy’s application for SIJS. The case was heard in March and the firm succeeded on both fronts.
Dan Solomon, Adam Cearley and Derick Sohn worked on this matter under the supervision of John Wood.
Hughes Hubbard Wins Asylum for Victim of Ghanaian Terror
Hughes Hubbard, with assistance from Immigration Equality, secured asylum for a pro bono client who had been arrested and detained in New York after fleeing police brutality against gays in her native Ghana.
The client, 24, fled to the United States in November 2011, two months after she was arrested, starved, beaten and gang raped by the police, who left her for dead in a ditch. The police targeted her after she witnessed a mob attack on a lesbian classmate at her university and spoke to a journalist about the violence against gays in Ghana. The journalist reported to the police that she was a lesbian.
A few days after she was released from the hospital, the client found her girlfriend strangled to death in their bed. Afraid for her life, she purchased a forged U.S. visa and passport and flew to New York. She was arrested at JFK International Airport and taken to an immigration detention center in New Jersey.
HHR teamed up with Immigration Equality, a national organization fighting for equality under U.S. immigration law for gays, and secured her release on parole in January 2012. HHR then successfully represented her in Immigration Court, arguing that she deserved asylum because of past and probable future persecution based on her sexual orientation. On Feb. 22, the Immigration Court granted her refugee asylum. The client now lives in New Jersey and has begun technical school to become a physician assistant.
The client thanked Jaime Hernandez, who represented her, at Immigration Equality’s “Safe Haven Awards” ceremony on May 17. Hernandez worked on the case with supervision from George Tsougarakis.
“If it wasn’t for Immigration Equality and Hughes Hubbard, I would be dead now,” the client said.
Hughes Hubbard Helps Ex-Offender Regain Full Custody of Her Daughter
Hughes Hubbard helped a pro bono client participating in a re-entry program for ex-offenders regain full custody of her 11-year-old daughter after a seven-year separation.
With a prior conviction for marijuana possession, the client was imprisoned in 2003 for selling drugs. Custody of her daughter was first granted to her grandmother in Georgia, then to her mother in the Bronx. The firm began representing the client a month after she was released from prison in October 2011.
The client gained temporary custody of her daughter in December after HHR filed for transfer of the custody order from Georgia to New York. In January 2012, the firm persuaded a judge to modify the order, giving the client full custody of her daughter. Another judge affirmed the order at a hearing this May.
U.S. Judge Harold Baer Jr. helped start the SDNY re-entry program in 2010 to help ex-offenders get on their feet and avoid being arrested again. The voluntary, intensive supervision program includes biweekly meetings with Judge Baer, frequent meetings with assigned probation officers and participation in cognitive behavior therapy. Upon successful completion of the program, participants are given a year of reduced probation.
The client, who is still in the program, is now enjoying her relationship with her daughter and her mother, who initially opposed her taking custody.
Francine Kavanagh represented the client with supervision from Vilia Hayes.
Hughes Hubbard Honored at '40 at 50 Judicial Pro Bono Breakfast'
On March 29, Hughes Hubbard was among several law firms in Washington, D.C., honored at the ninth annual “40 at 50 Judicial Pro Bono Recognition Breakfast,” organized by the D.C. Circuit Judicial Conference Standing Committee on Pro Bono Legal Services. John Wood, who oversees the pro bono program in the D.C. office, and associates Alicia Winston and Ben Grillot represented the firm at the breakfast.
Hughes Hubbard and 28 other law firms were recognized for having at least 40 percent of their attorneys perform at least 50 hours of pro bono work, an honor the D.C. office has received four times in recent years. In addition, for the first time, Hughes Hubbard was among a select group of seven firms recognized for having at least 50 percent of their lawyers do at least 50 hours of pro bono work.
More than 100 firms were eligible for consideration this year. The criteria for firms included having a D.C. office and employing at least 25 attorneys.
Hughes Hubbard Wins Survivor Benefits for Posthumously Conceived Twins
Hughes Hubbard scored a major pro bono victory on April 23, 2012, when a Social Security Administrative Law Judge awarded survivors insurance benefits to twin sons conceived with the help of assisted reproductive technology after the death of their father at the age of 32 from brain cancer.
The decision is the latest victory in a series of cases in which Hughes Hubbard has obtained Social Security benefits for posthumously conceived children.
In 2004, the firm won a landmark case, Gillett-Netting v. Barnhart, before the Ninth Circuit Court of Appeals in which Hagit Elul argued as a fifth-year associate. The court held that children conceived after the death of their father using in vitro fertilization were entitled to survivor benefits. Gillett-Netting was the first federal appeal ever decided on that issue.
On May 21, 2012, the U.S. Supreme Court issued an opinion in Astrue v. Capato regarding the rights of posthumously conceived children under the Social Security Act. The Supreme Court’s review included a discussion of the Gillett-Netting case.
In addition to Elul, Rebecca Sosa and Miles Orton represented the pro bono client.
Hughes Hubbard Wins inMotion's 2012 'Commitment to Justice' Award
Hughes Hubbard received inMotion's "2012 Commitment to Justice" Award for "Outstanding Law Firm" on Feb. 9 at a reception at the Lincoln Center in New York City. The firm was honored for its 13-year partnership with inMotion in assisting low-income clients. In 2011 alone, 91 associates, partners and support staff volunteered on matters referred by inMotion. In 2012, the firm has taken on 14 uncontested divorce cases since winning the award.
At the Februrary reception, Sarah L. Cave, Jaime O. Hernandez and Christine M. Stecura earned inMotion’s Outstanding Legal Team Award for their representation of an abused Dominican woman facing imminent deportation.
Hughes Hubbard Expands Efforts With Nonprofit to Help Immigrant Children
When Alex Hess recently took on a case from Kids in Need of Defense (“KIND”), she expected to be thrown in at the deep end like she was by other nonprofits on her previous pro bono matters. But Hess was pleasantly surprised to find a KIND mentor locked in arms with her every step of the way. After Hess successfully resolved the case, it was featured in the June edition of the ABA Journal.
“Working with KIND is phenomenal. They truly are amazing,” she told News@Hughes. She explained that KIND is different because unlike other mentor attorneys with extensive caseloads of their own, KIND attorneys work almost exclusively as mentors. “KIND understands that you need quick answers. At the drop of a hat they will send legal summaries or model documents to help complete the mission. You’re never trying to do something blind. It’s an invaluable resource and I think they do a great job with their model.”
Now Hughes Hubbard is expanding its pro bono initiative with KIND, a national nonprofit that provides legal counsel to unaccompanied immigrant children in the U.S. Launched in 2008 by Microsoft Corp. and actress Angelina Jolie, the Washington, D.C.-based organization has served 3,500 children facing deportation. More than 125 law firms and corporate legal departments are providing KIND with pro bono assistance.
Vilia Hayes, co-chair of the firm’s Pro Bono Committee, conceived the plan to expand the partnership after receiving glowing reports from HHR attorneys like Hess. “I thought it was a wonderful opportunity to help these unaccompanied children in the U.S.” she said. “Our attorneys say the experience is very rewarding. It leverages pro bono hours with changing somebody’s life.”
Apart from the KIND cases on which Hughes Hubbard are already working, the firm will take on five to 10 additional matters, which will be supervised by a group of litigation partners, including Ted Mayer, Vilia Hayes, Bill Maguire, Bill Beausoleil, Jason Benton and Neil Oxford. The group meets periodically to share resources, experiences and advice on how to manage the cases.
Many of the children are eligible for Special Immigrant Juvenile Status (a pathway to legal permanent residency), which gives attorneys a chance to make a dramatic difference in their lives with a relatively limited time commitment. A 90-minute training program was held at the New York office on Sept. 21 that offered CLE credit. Attorneys learned the essentials of representing children before the immigration court and administrative agencies. Topics included asylum, special immigrant juvenile status, prosecutorial discretion, immigration court procedure and working with the child client.
In the KIND case that Hess worked on, under supervision by partner John Wood, Hughes Hubbard represented a minor from El Salvador who crossed the U.S.-Mexico border alone to escape parental neglect and abuse. The child was detained at the border and then brought to a facility in Virginia. A family friend from El Salvador flew from Virginia to pick him up.
In June 2011, Hughes Hubbard moved the Arlington County (Virginia) Juvenile and Domestic Relations Court to grant the family friend custody over the child and make the necessary factual findings to permit his application for SIJS. The court granted his application and Hughes Hubbard subsequently successfully moved the immigration judge to dismiss his removal proceedings and submitted the necessary paperwork to complete his journey toward legal permanent residency. The child obtained legal permanent residency in July 2012.
Hess said the expanded partnership is a “fabulous” idea. “KIND is undoubtedly a worthy cause,” she said. “KIND’s entire model is based on the fact that these kids are facing our justice system without any help at all. There’s no moral dilemma as to whether you’re on the right side. With these kids, just having someone stand next to them before a judge makes a huge difference in their lives.”
Hughes Hubbard Recognized at Gala for Domestic Violence Support Group
On Oct. 25, Hughes Hubbard was among the firms recognized for their pro bono work with the Nassau County Coalition Against Domestic Violence at the inaugural gala for the Safe Place, held at the Garden City Hotel in Garden City, New York.
The Safe Place is a facility in Bethpage, New York from which Nassau County Coalition Against Domestic Violence ("CADV") and the Coalition Against Child Abuse and Neglect ("CCAN") offer counseling services to victims of child abuse and domestic violence. The firm is representing CADV in connection with a potential merger with CCAN.
Ken Lefkowitz, Dan Litowitz, Arinze Ike and Julie Hanus worked on the related pro bono matters.
Hughes Hubbard Participates in 'Go Casual For Justice' Fundraiser
On Oct. 26, as part of the annual National Pro Bono Celebration Week, the firm’s Washington, D.C., office participated in Go Casual for Justice, a jeans-day fundraiser to benefit the D.C. Bar Foundation’s Poverty Lawyer Loan Repayment Assistance Program (“LRAP”).
LRAP helps poverty lawyers meet their educational debt payments while earning a public-interest salary. This allows them to continue serving the most vulnerable residents in the nation’s capital. Hughes Hubbard joined 105 other workplaces across the city in the fundraising effort. Nearly 50 D.C. attorneys and staff participated and raised funds for LRAP. Participating firms were recognized in a Legal Times ad. Allison Carle coordinated the fundraiser and the firm provided a pizza lunch to all participants.
Hughes Hubbard Praised By Legal Services of Greater Miami
In its fall newsletter, Legal Services of Greater Miami Inc. congratulated Hughes Hubbard’s Miami office for accepting the most pro bono referrals in the first six months of 2012.
Legal Services is one of the primary providers of free civil legal aid to the needy in South Florida. The nonprofit organization represents clients in a variety of matters and serves as a safety net, preventing many of its clients from becoming homeless or dependent on welfare.
Earlier in 2012, after a collaborative brainstorming session regarding what type of pro bono project to undertake, a team of attorneys in the Miami corporate department began taking referrals from Legal Services. The pro bono matters selected by the team involve the representation of clients with disabilities in completing their naturalization process. In addition, HHR represents Legal Services as a landlord in the leasing of office space in its building to other nonprofit organizations.
The Miami teams working on these pro bono matters include William A. Weber, Mark Denham, Freddie Goudie, Gisela M. Munoz, Jose V. Bermudez, Emilio Saiz, Dan Whyte, Carlos Vasconsellos and Nyana Miller. Munoz has served on the board of Legal Services for the past six years.
Hughes Hubbard Associate Participates in 'Green Card Stories' Event
On Oct. 10, Hughes Hubbard associate Alex Hess spoke at an event called “Green Card Stories: Contributions of Young Immigrants to the United States,” held at the Microsoft Innovation & Policy Center in Washington, D.C.
More than 60 people attended the event, co-sponsored by Kids in Need of Defense (“KIND”) and the editors of Green Card Stories, a coffee-table style book that depicts 50 recent immigrants with permanent residence or citizenship in artfully written essays and photos. Hughes Hubbard recently expanded its pro bono work with KIND, a national nonprofit that provides legal counsel to unaccompanied immigrant children in the U.S.
Other speakers included Wendy Young, president of KIND; Brad Smith, general counsel of Microsoft and co-chair of the KIND board; and immigration attorney Stephen Yale-Loehr, an adjunct professor at Cornell Law School and co-editor of Green Card Stories.
Hughes Hubbard Helps Pave Honduran's Path to Legal Residency
A Florida Juvenile Court judge declared a young Honduran immigrant named a dependent of the court after Hughes Hubbard argued that she would be at substantial risk of further abuse, abandonment and neglect if forced to return to her native country.
The July 30 court declaration paves the way for the client, who nearly died crossing the border, to pursue a path to legal permanent residency. Her asylum status was granted on Aug. 2.
It’s been a long and painful journey for the client, who was abandoned by her parents in Honduras at the age of 2. She lived with various caretakers who severely abused her physically and emotionally. At 13, her caretaker kicked her out of the house. While living on the streets, she was the victim of gang rape. Finally, in 2009, she headed to the United States to reunite with the only caretaker who had shown her any compassion.
For one month, the client and a young cousin walked hundreds of miles with little food or water through the desert. Traveling by bus and train, they were exposed to potential death by dehydration, cold weather, exhaustion and assaults by criminal groups. When U.S. Customs and Border Patrol apprehended her in Arizona, she was relieved that someone had found her. She was released to her former sought-after caretaker in Miami, but even that caretaker then refused to take responsibility for her, leaving her on her own without any support.
Hughes Hubbard worked with Catholic Charities after the client’s original pro bono counsel was unable to continue representing her. Hughes Hubbard had to work quickly to have the court hear the dependency petition before her 18th birthday on Aug. 3 when she would have lost her right to pursue these remedies.
Rebecca Sosa and Nyana Miller represented the client with supervision from Gisela Munoz and Stacey Koch Lieberman. They will continue to work with the client as she strives to obtain legal permanent residency and to resume her education.
Hughes Hubbard Celebrates Fifth Anniversary of Pro Bono Criminal Trial Program
Hughes Hubbard celebrated the fifth anniversary of its Pro Bono Criminal Trial Program (“CTP”) at a reception held at the firm’s New York office on July 13.
Over 75 guests were present to mark this milestone, including alumni of the program, summer associates, assistant district attorneys and in-house counsel with clients who support the CTP. Among the speakers were Bill Maguire; HHR alum Jason Masimore, an assistant U.S. attorney in the Southern District of New York; and Daryl Reed, assistant district attorney in the New York County District Attorney’s Office.
Since 2006, Hughes Hubbard has been one of only two New York firms to offer a pro bono criminal defense program. Under David G. Liston’s supervision, more than 80 attorneys, summer associates, paralegals and interns have represented over 35 indigent clients in nearly 40 cases.
Speaking to the assembled group, Liston said, “We are helping people who need our help. We help, with each case and each client, to bring the criminal justice system a little closer to the ideals to which it aspires. As much as our clients, and the criminal justice system, are getting from our efforts, we are getting back so much in return in terms of personal satisfaction and professional development.”
Hughes Hubbard Offers Helping Hand to Sandy Victims
Shakina, a young Brooklyn mother whose 3-year-old daughter was living with her aunt when superstorm Sandy struck, needed help replacing her daughter’s furniture and clothing when she visited a Brooklyn community center on Nov. 20. Hughes Hubbard attorneys and the New York Legal Assistance Group (“NYLAG”) were there offering disaster relief to storm victims. But Teresa Delany quickly realized Shakina faced an uphill battle getting assistance from the Federal Emergency Management Agency (“FEMA”), since a claim had already been filed for the aunt’s house.
Undeterred, Delany rolled up her sleeves and called FEMA. About an hour later, after Delany and the FEMA rep had made substantial progress, Delany’s cell coverage started to fade. Delany dashed out of the center as the FEMA rep repeatedly said “hello.” Finally, the FEMA operator hung up, forcing Delany to start over again with another rep. Forty-five minutes later, Delany completed the application, allowing Shakina to breathe easy knowing that FEMA assistance was on the way.“It’s a good result for a woman who otherwise would not have known how to proceed under unusual circumstances for the possessions that were lost,” Delany said.
Delany isn’t the only HHR attorney seeking good results for Sandy victims. After Sandy walloped the East Coast on Oct. 29, HHR attorneys have turned out in force to help victims rebuild their homes, their businesses and their lives.
In addition to NYLAG, HHR has teamed up with the Legal Aid Society, the City Bar Justice Center, Legal Services NYC, the City Bar Committee on Pro Bono and Legal Services and City Harvest to offer storm victims pro bono legal support in connection with FEMA claims relating to housing, personal property and lost wages, as well as assistance being offered through other government agencies. They have offered training sessions to attorneys and storm relief to residents in Brooklyn, the Rockaways, Staten Island and Long Island.
Sarah Cave and Vilia Hayes spearheaded an effort that started Nov. 19 to help Legal Aid staff a disaster relief hotline every Monday at its Harlem Community Law Office. Participating attorneys include: Alex Bogdan, Erin DeCecchis, Teresa Delaney, Laura Fibiger, Anson Frelinghuysen, Ariel Lichterman, David McCallen, Sam McCoubrey, Nanda Srikantaiah, Jamie Steinfink, Gary Simon and Lucas Watkins.
Lichterman said while some callers have expressed frustration with their circumstances, many have been “surprisingly positive” and “extremely grateful” for the services that HHR and others have provided. “A lot of people were affected by this storm,” he said. “Luckily I wasn’t. So I just wanted to do my part to help out.”
Among the other attorneys who have volunteered to help are: Richard Bosch, Yohance Bowden, Jim Delaney, Walter Egbert, Ben Galynker, Justin Greenbaum, Danny Grossman, Jillian Kane, Steve Luger, Seth Schulman-Marcus, Gloria Nusbacher, Kate O’Donnell, Konstantine Paschalidis, Chuck Samuelson, Michael Tiger and Ed Troya.
Hughes Hubbard Sets Stage for Brooklyn Museum Exhibition
Hughes Hubbard represented the Brooklyn Museum in connection with the launch of "Go," a groundbreaking community-curated open studio project and social networking initiative, designed to foster personal exchanges between Brooklyn-based artists, their communities and the Brooklyn Museum. Artists across Brooklyn register on the Go website, create an artist profile page and post their art submissions on their profile.
For one weekend in September, participating artists opened their studio doors to the public to allow registered voters to view their artwork in person and in the context of the artists’ work environments. Registered voters who visited the studios nominated their favorite artists for inclusion in a group exhibition at the Brooklyn Museum.
Museum curators selected five artists to be featured in the exhibition, which will run from Dec. 1, 2012 to Feb. 24, 2013. Hughes Hubbard attorneys Dan Weiner, Lindsay Orosz, Ali Peyser and Jenny Liang provided legal counsel in connection with the development of Go. http://www.brooklynmuseum.org/exhibitions/go/
Hughes Hubbard Honored at 2012 Pro Bono Publico Awards
Reuben Borman and Sarah Cave were honored on Nov. 19 at the Legal Aid Society’s 2012 Pro Bono Publico Awards for providing exceptional legal services to low-income New Yorkers.
Specifically, they were honored for their outstanding work as co-counsel with the Juvenile Rights Practice in Rivera v. Mattingly, a federal lawsuit challenging the unlawful removal of children from their kinship foster family and the excessive delay in returning them home.
In addition, Hughes Hubbard was recognized for staffing the Legal Aid Society’s Detention Defense Hotline for detained immigrants. Each week, associates and paralegals answer calls and conduct phone interviews, providing assistance to the Legal Aid Society’s Civil Practice Immigration Law Unit.
Hughes Hubbard Wins 2012 Cornerstone Award
Hughes Hubbard attorneys Jason Habinsky and Christine Fitzgerald were among eight attorneys honored by the Lawyers Alliance for New York at the 15th Cornerstone Awards, held Nov. 13 at Credit Suisse in New York City.
The pair, selected from more than 1,400 lawyers in Lawyer Alliance’s volunteer network, received the 2012 Cornerstone Award in recognition of their pro bono work on behalf of multiple organizations.
Habinsky and Fitzgerald were honored specifically for their employment advice and counsel to 18 nonprofits, including nine youth-serving organizations, on a wide range of legal issues, including time-sensitive consultations and complex worker classification matters. They set a record for the most pro bono clients represented by a Cornerstone Award winner. Among the 18 nonprofits they served were the Community HIV/AIDS Mobilization Project Inc., Girls Educational and Mentoring Services, Haitian Americans United for Progress, the Pajama Program, the Brooklyn Philharmonic Symphony Orchestra and VISIONS/Services for the Blind and Visually Impaired.
“This year’s honorees have delivered exemplary pro bono services, helping nonprofit organizations to provide vital programs and services during difficult financial times,” said John D. Lobrano, chair of the board of directors of Lawyers Alliance. The awards ceremony drew coverage in the New York Law Journal.
Hughes Hubbard’s Litigation Department Welcomes Rafael Cruz-Alvarez as a Partner in the Firm’s Miami Office
Miami, January 2, 2013—Hughes Hubbard announced today that Rafael Cruz-Alvarez has joined its Litigation Department as a partner in the firm’s Miami office. Cruz-Alvarez was most recently a partner at Shook, Hardy & Bacon LLP in its Miami office.
Cruz-Alvarez is an experienced product liability defense lawyer. He has defended cases involving a wide range of products involving pharmaceuticals, fungicides, and other products, including the Engle progeny smoking and health cases filed throughout the state of Florida. Cruz-Alvarez has served as lead counsel for Lorillard Tobacco Company and Philip Morris USA in scores of such smoking and health cases. Cruz-Alvarez has also served as counsel for numerous drug manufacturers in significant pharmaceutical liability claims. His representative cases in the pharmaceutical sector include Redux / Pondimin (Fen-Phen) diet drug claims and Accutane claims filed throughout the state of Florida, including those in the Accutane MDL in the U.S. District Court for the Middle District of Florida.
“Rafael is a versatile litigator who has handled hundreds of product liability cases for leading manufacturers, and will be of enormous value to our product liability and general litigation clients,” said William R. Maguire, Chair of Hughes Hubbard’s Litigation Department.
“We’re thrilled to welcome Rafael to Hughes Hubbard’s Miami office,” added Nicolas Swerdloff, Office Managing Partner of Hughes Hubbard’s Miami office. “Personally, I look forward to working with him closely on the Hughes Hubbard team serving Lorillard Tobacco Company as national coordinating counsel, including the thousands of cases here in Florida. He will also add additional depth to our already strong international litigation practice in Miami.”
“I am delighted to join one of the most respected litigation teams in the world,” Cruz-Alvarez said. “From sophisticated, high-stakes product liability litigations to leading-edge toxic tort matters, Hughes Hubbard is renowned for its prowess in court. I look forward to putting the firm’s resources to work for my clients.”
About Hughes Hubbard
Hughes Hubbard & Reed LLP is an international law firm ranked No. 1 for the second consecutive year in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
Hughes Hubbard Wins Preliminary Injunction in Software Copyright Case
In a case that reads like a high-tech thriller, Hughes Hubbard client Nectar Services Corp., an IP communications and management services provider, won an important opening victory against a group of departed employees and a former business partner with which the employees had aligned.
On Oct. 15, U.S. District Judge Paul A. Crotty granted Nectar a preliminary injunction against any further development or deployment of the departed group's competing software product, pending a full trial on the merits.
In recent years, Nectar had developed a leading software product for managing and monitoring a mixed network of data and VoIP telephony equipment in large enterprises. VoIP (“Voice over Internet Protocol”) allows users to operate a complete telephone system over – and integrated with – their data networks. Nectar provides the core software that enables network operations personnel and outside “managed services providers” to manage these complex networks.
In 2011, a group of Nectar’s key software development personnel quit to form their own startup, ostensibly to develop a product that would not directly compete with Nectar. Instead, they secretly obtained financing from one of Nectar's “channel partners” – a major managed services provider firm – with the goal of replicating and replacing Nectar's product, thereby replacing Nectar in that partner's managed services offerings, and providing a beachhead from which to attempt to displace Nectar in the greater market.
When details of the plan leaked out, Nectar suspected infringement of its product and filed suit in the Southern District seeking injunctive relief and damages. In early discovery, Nectar obtained a copy of defendants’ source code for the competing product, and Nectar’s experts compared that code to assess infringement.
Nectar's experts found evidence that the defendants copied Nectar’s product. HHR used this to press for explanations during the lead developer's deposition. Those explanations set up a trail that led to a laptop computer used by one of the developer's subordinates.
Examination of the subordinate's computer led to a big break in the case. The subordinate had worked remotely, and routinely used a Skype chat window to collaborate with the lead developer. He may not have realized that, by default, Skype permanently retains the entire chat history on the user computer.
The Skype log was over 700 pages and showed direct evidence, typed by the developers themselves, that the lead developer had transmitted numerous files from the Nectar code base to the subordinate. The two of them studied the Nectar code together for an extended period during development, and incorporated portions of it into their own product. After the revelations from the Skype log, the defendants quickly agreed to a broad preliminary injunction.
Ron Abramson and Alex Patchen represent Nectar in this case, which is currently pending and, unless fully settled in the interim, will likely go to trial early next year. Nectar will seek judgment making the injunction permanent, and an award of damages and attorneys’ fees.
Hughes Hubbard Protects Dewey Leaders in $71.5M Partner Contribution Plan
After Hughes Hubbard’s cross-examination and oral argument on a proposed Dewey & LeBoeuf partner contribution plan (“PCP”) before U.S. Bankruptcy Court Judge Martin Glenn on Sept. 20, former Dewey partners modified the proposed PCP to obviate concerns raised by limited objections that Hughes Hubbard filed on behalf of members of the firm’s former senior management.
Former chair Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders had objected to portions of the proposed PCP. Davis was excluded from participating and DiCarmine and Sanders were ineligible because they were employees rather than partners.
On Oct. 9, Judge Glenn approved the PCP in a 27-page decision, noting that the trio’s limited objections had been met. He also noted Dewey’s plans to pursue lawsuits against all three because of their alleged role in the firm’s demise, but found that “[t]he Court has no basis to conclude – and does not conclude – that there are any viable claims that can be pursued against Davis, DiCarmine and Sanders, or what defenses they may be able to assert.”
Ned Bassen cross-examined the debtor’s witnesses at the PCP hearing and Katie Coleman orally argued the limited objections of Davis, DiCarmine and Sanders. On Oct. 9, The Wall Street Journal quoted Bassen as saying the firm’s clients have done nothing wrong and that no proof of their responsibility for Dewey’s demise has yet been presented. The article also reported that Bassen said earlier that week that the firm’s clients were in favor of the settlement as long as it doesn’t result in their bearing disproportionate blame for the firm’s collapse in future lawsuits. “If it doesn’t trample on their rights, it’s a good step toward resolution and not spending a million years fighting about this,” he said.
Dewey filed for Chapter 11 bankruptcy in May, becoming the largest U.S. law firm to do so. The bankruptcy was the six-month culmination of an exodus of partners and concern about the firm’s financial condition.
In addition to Bassen and Coleman, Christine Fitzgerald, Chris Gartman, Sarah Wertheimer, Jacob Gartman and Michael Lignos worked on this matter.
Firm Wins Appeal Upholding Dismissal of Civil Rights Claims
Hughes Hubbard successfully defended the City of New York and an NYPD detective against an appeal by a woman seeking to overturn a jury verdict and summary judgment dismissing her civil rights claims of false arrest and malicious prosecution.
On Sept. 14, a three-judge panel of the Second Circuit Court of Appeals issued a unanimous decision affirming the jury verdict and a district court judgment in favor of the City and Det. Raymond Brockmann.
In 2006, Det. Brockmann arrested Alla Bernshtein for carrying a fake EMT badge into 26 Federal Plaza. After she was held in Central Booking for 38 hours, she sued Det. Brockmann and the City for false arrest and malicious prosecution under Section 1983, which allows plaintiffs to bring lawsuits for federal civil rights violations. Prior to the firm’s representation, Judge Alvin Hellerstein had dismissed both claims, but determined that the case should go to trial based on the allegation of excessive detention.
Hughes Hubbard undertook the case pro bono as part of a series of trials conducted for the City. In January 2011, following a three-day trial in district court, Hughes Hubbard secured dismissal of the claim against the City, and won a jury verdict clearing Det. Brockmann of any culpability for the detention of Bernshtein at Central Booking.
Hughes Hubbard continued its representation of the City and the detective after Bernshtein appealed all judgments. Neil Oxford handled the oral argument on May 21. Sarah Cave and Mei Li Zhen also represented the City and Det. Brockmann in the appeal. George Davidson provided invaluable assistance in preparation for oral argument.
Firm Wins Mesothelioma Jury Trial in Los Angeles
Hughes Hubbard successfully defended Lorillard Tobacco Company and Hollingsworth & Vose (“H&V”) against a lawsuit brought by a California man who claimed he contracted mesothelioma from exposure to asbestos in the filter of original Kent cigarettes.
On Oct. 4, following a 21-day trial, a state court jury in Los Angeles returned a unanimous defense verdict, rejecting Dimitris Couscouris’ claims and finding that he had failed to prove that he smoked original Kent cigarettes.
“This was a hard-fought case against an experienced and aggressive law firm in a difficult jurisdiction,” said John Reilly, associate general counsel, litigation, at Lorillard, referring to The Lanier Law Firm, which represented the Couscourises. “We are pleased that the jury correctly and fairly evaluated the evidence and sided with the defense.”
Couscouris was diagnosed with mesothelioma in early 2011. In December, he and his wife, Magdalena, sued nine defendants for damages in California state court, asserting claims of negligence, strict liability and loss of consortium. When trial began on Sept. 4, Lorillard and H&V were the only remaining defendants. Eight product liability claims against Lorillard and four against H&V went to the jury. The Couscourises requested nearly $800,000 in damages, plus unspecified non-economic damages and damages for loss of consortium. They also asked the jury to determine whether they were entitled to punitive damages against Lorillard.
For a brief period in the 1950s, Lorillard manufactured Kent cigarettes containing a highly efficient state-of-the-art filter with asbestos; H&V made the filter media. Mesothelioma was not definitively linked to asbestos until four years after Lorillard stopped using it as a component in its filters in 1956.
James Berger led the trial team that represented H&V, which included Liz Raines, Tara Lamer, Sally Merriam, Mike Mitchell, Kari Jones and Kathy Jeanetta.
Firm Aids PetroChoice in Acquisition of Suburban Oil
Hughes Hubbard provided strategic advice to PetroChoice, a leading provider of lubrication solutions, in its acquisition of Ohio-based Suburban Oil Company, a supplier of petroleum lubricants.
The acquisition, which closed in June, will allow PetroChoice to expand both its product and service offering to customers and its geographic footprint.
“Suburban is a great fit with PetroChoice and we are impressed by Suburban’s highly trained team,” said Shane O’Kelly, CEO of PetroChoice. “Like us, they pride themselves on delivering comprehensive lubrication solutions to their customers. This acquisition creates a significant opportunity for us to expand our distribution presence into Ohio, Indiana and Kentucky.”
The transaction was the latest one Hughes Hubbard has worked on this year involving Pennsylvania-based PetroChoice. In January, Hughes Hubbard advised Greenbriar Equity Group LLC in its purchase of PetroChoice from KRG Capital Partners. In April, HHR advised PetroChoice in its acquisition of Lorenz Lubricant Company Inc., a Minnesota-based company that bolstered PetroChoice’s presence in the agriculture, construction, industrial, manufacturing, railway and transportation industries in the Midwest.
Chuck Samuelson, Steve Greene, Sam Sultanik, Jim Delaney, Bruce Goldberger, Alex Anderson, Ross Lipman, Jason Habinsky, Erin DeCecchis, Kate O’Donnell, Sinead Carroll, Yusef Windham, Kyle Leingang and Jenny Liang worked on the deal.
Hughes Hubbard Assists TheStreet in $5.8M Purchase of The Deal
Hughes Hubbard advised digital media group TheStreet in its $5.8 million acquisition of The Deal LLC from investment firm Wasserstein & Co.
The move, announced Sept. 12, will enable TheStreet to expand its content and institutional subscribers by approximately 40,000 professionals, including senior-level bankers, law firm partners, private equity partners and hedge fund managers. Once the purchase is completed, The Deal’s flagship magazine will cease publication while more resources are shifted to its online product, The Deal Pipeline, an information subscription service and database.
Founded in 1999 as The Daily Deal print newspaper, the publication covers corporate transactions, including mergers and acquisitions. “This is a terrific combination that grows the most profitable portion of our business, subscription revenues,” said Elisabeth DeMarse, CEO of TheStreet. “The Deal is a prominent and well-respected brand that the market will intuitively associate with TheStreet, creating new revenue opportunities for both businesses at minimal incremental cost.”
Ken Lefkowitz, who led the HHR team representing TheStreet, told The American Lawyer that his relationship with the company dates back to its founding in 1996 by financial personality Jim Cramer and publisher Martin Peretz.
“They were one of my first clients when I became partner,” Lefkowitz said, adding that since then, Hughes Hubbard has handled a wide array of matters for the company from M&A and securities work to litigation and employment matters.
Lefkowitz also discussed his other media deals over the years, including Cablevision’s 2008 acquisition of Newsday; this year’s sale of The New Republic by a group of investors led by Peretz; and last year’s rebranding of Mark Cuban’s cable channel, HDNet. Lefkowitz told the magazine that he has learned to adapt his practice to accommodate the sweeping changes in the media industry wrought by the digital era. The article noted that Hughes Hubbard recruited Dan Schnapp from Reed Smith in 2007 to help on that front.
Among the other news outlets that covered the acquisition were The New York Times, The Wall Street Journal, Fox Business and Bloomberg.
In addition to Lefkowitz, other members of the HHR team included Francesca Lisk, Alex Anderson, Bruce Goldberger, Jim Delaney, Matt Syrkin, Sarah Wertheimer and Julie Hanus.
HHR Assists Music Ensemble With Dept. of Labor Inquiry
Hughes Hubbard obtained a favorable ruling for pro bono client Ensemble Signal when the New York State Department of Labor determined on Aug. 10 that the Ensemble Signal musicians are independent contractors rather than employees.
Ensemble Signal approached Hughes Hubbard in June after receiving a questionnaire from the Labor Department designed to help the agency determine whether workers are employees or independent contractors.
The firm prepared a response in which Ensemble Signal explained that its musicians are world-class freelance musicians who have control and discretion over their own individual performances. As a result, the Labor Department found that Ensemble Signal properly classified the musicians as independent contractors, thereby avoiding various tax-collecting and other administrative burdens.
Called by The New York Times “one of the most vital groups of its kind,” Ensemble Signal is a critically acclaimed nonprofit arts organization. It brings contemporary classical music to a broad audience through performance, educational outreach, recording and commissioning of new works. Both within and outside of New York, the group performs year-round at such diverse venues as Carnegie Hall, (le) Poisson Rouge, the Tanglewood Festival and the Guggenheim Museum, and features the work of a wide range of contemporary composers including Philip Glass, Morton Feldman, Hilda Paredes and Helmut Lachenmann.
Jesse James and Christine Fitzgerald represented Ensemble Signal with assistance from Michael Salzman.
Firm Wins Dismissal of $492M Lawsuit Against WestLB
Hughes Hubbard won a significant victory for WestLB when a New York state judge dismissed a lawsuit seeking $492 million in damages for alleged investment losses.
Four banks – Israel-based Bank Hapoalim BM, Bahrain-based Arab Banking Corp. BSC, Israel-based Mizrahi Tefahot Bank Ltd. and Ireland-based Anglo Irish Bank Corp. Ltd. – and Cayman Islands-based special-purpose corporation Justinian Capital SPC sued WestLB in 2009, alleging that they lost $492 million in two WestLB-controlled structured investment vehicles. They accused the German bank of mismanaging those vehicles and hiding information from them.
On Sept. 24, New York State Supreme Court Justice Shirley Werner Kornreich said in her dismissal ruling that the plaintiffs are “highly sophisticated business entities” that had access to information that they contend WestLB used to misrepresent the portfolio.
“The amended complaint fails to support any inference that plaintiffs were unaware of the same information or unable to apprise themselves of it,” she said in her ruling. “It establishes the opposite.” Justice Kornreich also noted that the alleged damages were “speculative.”
Justice Kornreich, citing numerous reasons, threw out the other claims in the case, including finding that the banks had improperly combined all the accusations against the various WestLB entities named as defendants.
“Our client’s very happy with the decision. They think that the decision is supported by the facts and the law,” Chris Paparella, the lead attorney on the case, told Law360. The victory came just one month after Hughes Hubbard secured a ruling for WestLB that pushed a $200 million-plus fraud suit brought by Justinian to the verge of dismissal.
In addition to Paparella, the HHR team included Marc Weinstein, Andrea Engels, Savvas Foukas and Seth Schulman-Marcus.
Townsend Appointed to London Court of International Arbitration
John Townsend has been appointed as a member of the Court of the London Court of International Arbitration (“LCIA”). The appointment is considered highly prestigious.
Townsend was appointed in September along with Royal Dutch Shell’s legal director Peter Rees QC. “It is great to have the addition of these two stars of arbitration to the already stellar line-up on the court,” LCIA’s director general, Adrian Winstanley, told Global Arbitration Review.
Approximately 40 members sit on the court. They are selected to provide and maintain a balance of leading practitioners in commercial arbitration, from the major trading areas of the world. The LCIA board appoints members of the court based on the recommendation of the court, which has a nominating committee to solicit members’ views. The court recommended Townsend for appointment at a meeting on Sept. 14, the effective start date of his five-year term.
Among the main duties of the LCIA Court, which was founded in1892, are appointing tribunals, deciding on challenges against arbitrators, controlling costs of arbitrations and ensuring the proper application of the LCIA rules.
GAR noted that Townsend has been at Hughes Hubbard since 1971, working in New York, Paris and his current office, Washington D.C. He was formerly chair of the board of directors of the American Arbitration Association from 2007 to 2010. He is also a U.S. appointee to the ICSID panel of arbitrators.
New York Law Journal Honors Sarah Cave for Pro Bono Work
In a Sept. 12 special edition
, the newspaper revealed that Cave was among 14 honorees chosen out of 70 nominees who have demonstrated a sustained commitment to improving the lives of financially struggling New Yorkers. Of the 14 honorees, Cave was one of eight private attorneys profiled; the others were public interest lawyers, a law firm, an in-house lawyer and a law school clinic.
According to the New York Law Journal, Cave stood out for her “modesty” about her contributions and a “fundamental belief” that she is doing what good lawyers do. “The difference between a positive result and negative result is often the presence of a lawyer,” Cave told the newspaper. “Making sure even those who can’t afford it get the best representation is essential to the system working properly.”
The profile noted that Cave has been involved with pro bono work since she was a first-year associate in 1998 and has averaged more than 260 pro bono hours annually since 2009, despite the demands of her securities and bankruptcy litigation practice.
“Every single thing we do [in pro bono] she has a hand in,” Candace Beinecke told the newspaper. She estimated that Cave, as co-chair of the firm’s pro bono committee, spends at least an additional 200 hours each year on administrative duties, developing and supervising the firm’s pro bono program. “She does about everything one can expect of someone in her position and three times more.”
Heidi Lee Henderson, senior director of legal services at inMotion, whose cases Cave has handled pro bono for the past six years, called Cave an “immigration guru.” “Sarah goes above and beyond what lawyers normally do on cases,” she said. “She’s been a real cheerleader and supporter of the work and mission and really cares about doing the right thing.”
The profile also highlighted Hughes Hubbard’s No. 2 ranking in The American Lawyer’s Pro Bono Survey in 2011 – a year in which 300 lawyers logged 47,000 pro bono hours, with more than 70 percent of the firm’s attorneys dedicating 20 hours or more.
Hughes Hubbard Secures Victory for WestLB AG In $492 Million Lawsuit
New York, September 25, 2012—Hughes Hubbard announced today that it obtained the dismissal of $492 million in claims against its client WestLB AG in a lawsuit brought by note holders in structured investment vehicles for which a WestLB subsidiary was the asset manager. The plaintiffs had accused WestLB of mismanaging those investment vehicles.
In her September 24, 2012 decision, New York State Supreme Court Justice Shirley Werner Kornreich said that the plaintiffs were sophisticated businesses and that if they choose to assert a fraud claim they were required to consider all available information. But she found that “[t]he amended complaint fails to support any inference that plaintiffs were unaware of the same information or unable to apprise themselves of it…. It establishes the opposite.”
“Our client is gratified by the decision,” said Chris Paparella, Hughes Hubbard litigation partner and the firm’s lead attorney on the case. “We believe that the decision is supported by the facts and the law.”
Hughes Hubbard litigation partner Marc A. Weinstein also represented WestLB in this case.
About Hughes HubbardHughes Hubbard & Reed LLP
is an international law firm ranked No. 1 for the second year in a row in 2012 on The American Lawyer’s A-List of what the magazine calls “the top firms among the nation’s legal elite”—the firm’s eighth year on the list. The firm was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes.
HHR Wins Chambers Latin America Award for Excellence in Corporate & Finance
Hughes Hubbard’s Miami office has won the “Chambers Latin America Award 2012” for Excellence in Corporate & Finance.
Hughes Hubbard received the award on Sept. 17 in front of more than 400 guests in Miami Beach, Florida. The firm was chosen among six nominees in the Corporate & Finance (Florida-Based) category. Other finalists included DLA Piper LLP (US), Hogan Lovells US LLP, Greenberg Traurig LLP and White & Case LLP.
The award recognizes the achievements of Hughes Hubbard’s Latin America practice over the past 12 months, including outstanding work, impressive strategic growth and excellence in client service. Hughes Hubbard has been shortlisted each year since the award’s debut in 2009.
In a brief acceptance speech in Portuguese and English, Senior Counsel Tim McCarthy, who started the Latin America practice in 1995, said: “We’ve been working very hard for many years to reach this point of earning this award.” Joining him on stage were partners Freddie Goudie, Amy G. Dulin, Mark Denham, Nick Swerdloff; associate Ana Spiguel; and visiting attorney Carlos Vasconsellos.
Chambers noted in a practice overview that Hughes Hubbard’s Latin America practice has more than 25 attorneys who work in tandem with the New York and Washington branches to service clients across the region. They focus on a broad range of corporate and finance matters, including syndicated and structured financings, contentious work, project finance, private equity and M&A. All of the group’s lawyers speak either Spanish or Portuguese, and many have lived or worked in Latin America. The firm’s client roster includes PwC, HBO Latin America, BNP Paribas, HSBC and Citibank. Chambers also highlighted the firm’s representation of a 20-bank syndicate in a $2.65 billion financing agreement for Brazilian conglomerate Votorantim Participacoes S.A.
Firm Wins Appeal Upholding Dismissal of Spain's $1B Oil Spill Suit
A federal appeals court on Aug. 29 upheld the dismissal of Spain’s $1 billion lawsuit against Hughes Hubbard client American Bureau of Shipping (“ABS”) over a 2002 oil spill off the coast of Spain.
A three-judge panel of the United States Court of Appeals for the Second Circuit unanimously affirmed a lower court ruling that ABS was entitled to summary judgment, holding that Spain did not meet its burden of establishing a genuine issue of material fact warranting a trial on the issue of alleged recklessness by ABS.
In its lawsuit, Spain claimed that Houston-based ABS, which certifies ships as meeting its standards for design, structure and condition, was negligent and reckless in certifying the single-hulled oil tanker M.T. Prestige as fit to carry fuel (although Spain conceded during oral argument before the district court that ABS could not be liable for negligence).
In November 2002, the Prestige discharged millions of gallons of oil into Spanish territorial waters after the ship broke in two and sank 140 miles off the country’s coast.
The appeals court did not address the issue addressed by the district court: whether a classification society can be held responsible to a third party like Spain for reckless certification-related conduct. Instead, consistent with the defense team's strategy on appeal, the court focused on the merits. The court held that Spain did not introduce sufficient evidence to show that ABS' conduct was reckless or that its conduct caused the sinking of the Prestige, affirming the district court’s decision on alternative grounds.
The ruling marks the latest victory Hughes Hubbard has achieved for ABS over nine years of litigation in what, at the time, had been reported as “the biggest lawsuit in maritime history.”
The current victory made headlines in Law360 and several prominent maritime publications, including Lloyds List, Tradewinds and Fairplay. Both Law360 and Tradewinds noted Jeff Coleman represented ABS. Both publications also quoted him as saying, "The decision reflects a sound application of the relevant law and we are delighted with the successful outcome."
In addition to Coleman, who argued the appeal, the HHR team representing ABS included Norman Kleinberg, Steven Hammond, Dan Weiner, Peter Sullivan, Jason Benton, Amera Chowhan, Josiah Trager and Jaime Winkelman. The Firm worked closely over the years with maritime counsel John Grimmer & Associates, including John Grimmer, Dan Paige, Brad Gandrup, and Robert Suarez. Former Hughes Hubbard partner Abraham Sofaer argued the case on behalf of Spain.
Firm Delivers Clean Sweep for Canada in Softwood Lumber Dispute
A tribunal of three distinguished international arbitrators delivered a unanimous award in favor of Canada in a sovereign-to-sovereign arbitration, commenced in January 2011 by the United States, in which Hughes Hubbard represented Canada.
The U.S. requested arbitration under the provisions of the Softwood Lumber Agreement of 2006 (“SLA”) – an agreement intended to end an extended trade war between the two countries over Canadian exports of softwood lumber. Under the terms of the SLA, the parties agreed to refer all disputes to arbitration under the rules of the London Court of International Arbitration – marking the first time two sovereigns had agreed to settle treaty-based disputes in this forum.
The latest arbitration, the fourth under the SLA, involved a claim by the U.S. that British Columbia was circumventing the SLA by misgrading timber to sell it at a cheaper price. The provincial government owns 90 percent of the forested land and sells to private companies under a complex system in which prices for timber are set by a combination of auction sales and grading of logs. The U.S. Department of Justice pointed to the sharp rise since 2007 in the percentage of the pine logs graded as Grade 4, the principal “lumber reject” grade, as proof that the British Columbia government was providing help to the local lumber industry as competitors in North America suffered from the drop in demand for lumber following the collapse of the U.S. housing market.
Canada, which is responsible for the actions of its provinces under the SLA, argued that the sharp rise was a result not of government action, but rather of over 50 percent of British Columbia’s pine forests being devastated by a mountain pine beetle infestation. Two to three years after beetle-infested trees die, they typically develop dramatic cracks that are the principal reason for downgrading a log to Grade 4.
A two-week hearing earlier this year followed four lengthy rounds of briefing, including written statements from six fact witnesses and nine experts, almost all of whom were cross examined at the hearing. Post-hearing briefs were submitted in May, and the arbitrators issued their Confidential Award on July 18. A public version redacting commercially sensitive information was issued on July 27.
The award is a total victory for Canada. The tribunal adopted Canada’s arguments with respect to every disputed point of law under the SLA, and either accepted the view of the facts urged by Canada or agreed with Canada that the U.S. had failed to show that the facts amounted to a breach of the SLA. "The arbitrators clearly understood the evidence well and had good reasons for dismissing the U.S.'s complaints in their entirety," John Townsend told Global Arbitration Review in a July 19 report.
The victory drew widespread media coverage in the U.S. and Canada in outlets such as The Wall Street Journal, Reuters, Law360, The Globe and Mail and The Vancouver Sun.
Hughes Hubbard represented Canada throughout the arbitration, along with a group of lawyers from the Government of Canada’s Trade Law Bureau, and in close cooperation with the law firms representing British Columbia and the British Columbia Lumber Trade Council. Canada’s team was led by Townsend and Joanne Osendarp, and included John Wood, John Ryan, Eric Parnes, Jim Boykin, Liz Solander, Mike Flynn-O’Brien, Ben Grillot and Alex Hess, as well as paralegals Anupama Chettri, Steve Halpin and Rob Hillenbrand.
HHR Works on 75M Euro Loan for Stage Entertainment
Hughes Hubbard represented Stage Entertainment B.V. in connection with the U.S. aspects of a 75 million euro term and revolving facilities agreement.
The Netherlands-based company’s four U.S. subsidiaries are guarantors under the facility. The lenders under the facility included ABN AMRO Bank and ING Bank.
Stage Entertainment provides a wide range of live entertainment to audiences across Europe and in New York by operating world-class venues, producing a range of leading international content, and creating and developing new musicals for shows. Notable productions include “The Lion King,” “Sister Act,” “Mama Mia,” “Beauty and the Beast,” “Cats,” “Hairspray,” “Saturday Night Fever” and “Rocky.”
The HHR team included Jan Joosten, Steven Greene, Arinze Ike and Christine Lamsvelt.
Firm Advises Goldman Sachs on Groundbreaking Aircraft Deal
Hughes Hubbard represented Goldman Sachs as sole structuring agent and sole bookrunner in a $587.5 million deal that will enable Dubai’s Emirates airline to lease aircraft from Doric Nimrod Air Finance Alpha Limited (“Doric”), a special-purpose Guernsey company.
Doric issued a $587.5 million capital markets offering of enhanced equipment trust certificates (“EETCs”) to finance the purchase of four Airbus A380-381 aircraft that will be leased to Dubai’s Emirates airline. The transaction closed July 11.
The proceeds will initially be held in escrow, with interest payments on the EETCs to be made by a depositary bank. Each class of EETCs also has the benefit of a liquidity facility. Natixis S.A., through its New York Branch, acted as depositary and liquidity provider on the transaction, which was rated by Moody’s Investors Service, Inc.
The transaction included several novel structuring elements, which will have a profound impact on future capital markets offerings secured by aircraft and related collateral, particularly in the EETC market.
Most notably, the aircraft will be registered in, and Emirates is domiciled in, the United Arab Emirates (“UAE”), a country that has adopted and implemented the Convention on International Interests in Mobile Equipment (“Cape Town Convention”) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment (“Protocol”). As such, the aircraft and related leases are expected to have the benefit of the Cape Town Convention and Protocol as adopted in the UAE, including Article XI, Alternative A of the Protocol, which is similar to Section 1110 of the U.S. Bankruptcy Code.
Steven I. Chung and John K. Hoyns worked on the transaction with Andrew Fowler, Brian Liu, Arinze Ike, Christopher Fickes, Jason Kaplan, Valerie Clark, Christine Lamsvelt and Julie Hanus. Andrew H. Braiterman, Spencer Harrison and Alexander F. Anderson advised on tax and ERISA issues.
HHR Secures Sanctions for Frivolous Challenge to Arbitration Award
Hughes Hubbard successfully defended Swedish telecom operator Tele2 Sverige AB (“Tele2”) against a motion to vacate an arbitration award brought in federal court by its opponent in the International Centre for Dispute Resolution (“ICDR”) arbitration. The award was issued last September by arbitrators Alexis Mourre, Mark Kantor and Thomas Shillinglaw.
The opponent, DigiTelCom, is a former co-shareholder in two Russian telecommunications companies that alleged that Tele2 had breached agreements relating to the expansion of wireless phone service in Russia. In December, DigiTelCom and its affiliates filed a motion in the Southern District of New York, asking the court to vacate the award on the basis that the arbitration panel had allegedly misinterpreted the contracts at issue in its 117-page award.
Tele2 opposed the motion and asked the court to confirm the award. Tele2 also moved for the court to impose sanctions on opposing counsel under section 1927 of Title 28 of the United States Code for bringing an improper and meritless challenge to what should have been the final resolution to the case. While parties to United States litigations typically each bear their own costs, Section 1927 provides an exception to this rule, allowing the prevailing party to seek attorneys’ fees when the opposing attorney “multiplies the proceedings in [a] case unreasonably and vexatiously....”
Following several rounds of written submissions and an oral argument in early June, in which John Fellas argued for Tele2, U.S. District Judge Richard J. Sullivan handed a victory to Tele2 on July 25, confirming the arbitration award and imposing sanctions on opposing counsel. In confirming the award, Judge Sullivan emphasized that it is not the job of district courts to second guess an arbitration panel’s contract interpretation as long as the panel had a “barely colorable justification” for the award. The judge agreed with Tele2 that the 117-page arbitration award, which was replete with citations to the record, was easily supported by colorable interpretations of the contracts at issue.
Noting that sanctions must not be imposed lightly, Judge Sullivan nevertheless also agreed with Tele2 that sanctions were appropriate in the case since the plaintiffs had cited virtually no relevant authority in their submissions and had merely attacked the tribunal’s findings and integrity “without providing any basis whatsoever” for their accusations. Finding that “[t]his kind of petition serves only to cause the parties to incur unnecessary expense and delay the implementation” of arbitration awards, Judge Sullivan granted Tele2’s motion for sanctions in the form of attorneys’ fees.
Where parties agree to arbitration “as an efficient and lower-cost alternative to litigation,” Judge Sullivan wrote in the decision, “both the parties and the system itself have a strong interest in the finality of those arbitration awards."
Fellas told Global Arbitration Review that while courts have rarely imposed sanctions under section 1927, they have been increasingly willing to do so in arbitration matters.
“In recent years, U.S. courts have been willing to impose sanctions in the form of an award of attorneys’ fees and costs on parties or their counsel making baseless challenges to arbitration awards,” he said.
The HHR team led by Fellas included Jennifer Alpern Hecht and Danny Grossman.
PetroChoice Acquires Lorenz Lubricant Company
Hughes Hubbard advised PetroChoice, a leading provider of lubrication solutions, in its acquisition of Lorenz Lubricant Company Inc., a top distributor of automatic lubrication systems and specialty lubricants for the commercial and industrial sectors in the Midwest. The deal was announced April 30.
PetroChoice said its acquisition of the Minnesota-based company fits its strategy of acquiring the top lubricant distributors to expand both its product and service offering to customers and its geographic footprint.
“Lorenz brings a group of very talented people with deep expertise to PetroChoice,” said Steve King, president of PetroChoice - Midwest Division. “We believe the partnership between PetroChoice and Lorenz, along with our recent acquisition of Rapids Hydraulics, will be very complementary given both companies’ focus on providing unmatched service and reliability and we are excited about the growth opportunities for the combined businesses.”
The acquisition will reinforce Pennsylvania-based PetroChoice’s presence in the agriculture, construction, industrial, manufacturing, railway and transportation industries in the Midwest. In January, HHR advised Greenbriar Equity Group LLC in its acquisition of PetroChoice from KRG Capital Partners.
Chuck Samuelson and Kate O’Donnell worked on the deal.
Firm Wins Bigger Award for Kansas Nuclear Utilities in Federal Circuit
Hughes Hubbard won an impressive victory on July 12, when the U.S. Court of Appeals for the Federal Circuit awarded $12.6 million in damages to the owners of the Wolf Creek nuclear plant in Kansas after the U.S. Energy Department failed to dispose of their spent nuclear fuel since 2006.
The award is $2.1 million higher than what the U.S. Court of Federal Claims had awarded Wolf Creek’s owners – Kansas Gas and Electric Company, Kansas City Power & Light Company, and Kansas Electric Power Cooperative Inc. The appeals court said the claims court shouldn’t have reduced the overhead portion of the utilities’ $10.6 million award from $3.4 million to $1.3 million because Wolf Creek’s overhead calculation was consistent with FERC mandates and generally accepted accounting principles.
The owners are among more than 60 nuclear utilities who have sued the federal government for damages due to its ongoing failure to start collecting spent fuel by 1998, as required by contract. The government’s plan to store spent nuclear fuel has been bogged down in political gridlock for decades. As of December, more than $2 billion in spent fuel settlements have been paid out of the taxpayer-funded federal Judgment Fund.
Robert Shapiro told Law360 that the ruling will help other utilities in similar breach of contract suits against the government.
“The precedent in this case will help utilities recover these overhead costs down the road,” he said.
The victory comes just three months after Hughes Hubbard secured a $12 million award for Dairyland Power Cooperative in the claims court in connection with its investment in a spent nuclear storage facility.
Shapiro represented the Kansas utilities with assistance from Daniel Lloyd.
HHR Settles Manhattan Condo Dispute for Waverly Properties
After three years of litigation, Hughes Hubbard successfully negotiated a settlement for Waverly Properties LLC in its breach of contract suit against the developer, general contractor, engineers and architect of three multimillion dollar Manhattan condominium units riddled with expensive and dangerous construction defects. Terms of the settlement, achieved in July, are confidential.
Waverly, seeking to recover more than $2 million in a down payment, plus damages, filed suit in 2009 after discovering a host of structural problems with three luxury apartments it had contracted to purchase in a 12-story condominium building in Manhattan’s upscale West Village neighborhood. Waverly had closed on two 6th floor units and was in the process of closing on the penthouse unit when Hughes Hubbard attorneys discovered the defects.
In the suit, filed in the Southern District of New York, Waverly said the defendants advertised the units as “high-quality” and claimed “attention to detail is paramount,” but failed to reveal problems with the heating; ventilation and air conditioning system; plumbing; staircases; roof terrace; and electricity, among other things.
“Unbeknownst to plaintiff, units were defectively designed, renovated and constructed and possess substantial structural, mechanical and design defects, a number of which involve life-safety issues,” conflicting with New York City’s building codes, the offering plan for the condominium, various manufacturers’ specifications and “good and workmanlike local standards,” the complaint read.
Peter Sullivan, Tom Furst, Shep DiCesare, Morgan Stecher and Ibert Schultz represented Waverly, with paralegal assistance from Michaela McDermott.
HHR Wins Legal Permanent Residence for Domestic Violence Survivor
After nearly two years, the firm obtained legal permanent residence under the Violence Against Women Act (“VAWA”) for a Guatemalan woman who survived domestic violence from her American husband. The firm received the case in May 2010 from inMotion, a non-profit organization offering free legal services to low-income women.
Although the client was eligible for permanent residence status based on her marriage to a U.S. citizen, her husband refused to help her complete the process. Instead, he used her undocumented status to keep her dependent on him for a home and a job at his bakery. Her husband’s abuse escalated from verbal threats and financial exploitation to physical violence. In September 2009, after deciding she and her son, Edwin, were no longer safe, the client left her husband and the job and sent Edwin to live with her parents in Guatemala. But she did not have authorization to work legally in this country.
In August 2010, Hughes Hubbard submitted a VAWA self-petitioner application, along with adjustment of status under VAWA and work authorization. Under VAWA and immigration law, the firm had to demonstrate that the client was entitled to proceed with her immigration application independently from her husband as an abused spouse of a U.S. citizen, and that she had entered into the marriage in good faith. Hughes Hubbard submitted two rounds of extensive affidavits from friends, family and medical professionals to substantiate her case.
While the VAWA application was under review, the United States Citizenship and Immigration Services (“USCIS”) granted the client’s request for work authorization in August 2010. This critical step allowed the client to work legally and build her financial independence.
In late September 2011, the firm won protection under VAWA to adjust the client’s status, which allowed her to obtain legal permanent residency on June 4, 2012.
After a nearly two-year journey, the client has started a new life. She has obtained pro bono assistance from another law firm to divorce her husband. She and her new partner recently had a baby boy named Josue. With her residency status resolved, the client visited Guatemala for the first time since she came to the U.S. and reunited with her son, Edwin, who is now 10. She is anxiously awaiting the end of the school year to bring him back to the U.S. to live with her and his little brother.
The client and Edwin recently called the firm from Guatemala. “Thank you for making it possible for me to finally be with my mother,” Edwin said.
Rebecca Sosa, Betsy Pierce, Francine Kavanagh, Christopher Wild, Caroline Parker-Beaudrias and Sara Echenique worked on the case. Sarah Cave and Neil Oxford served as supervising partners.
HHR Wins 588,000 Euro Judgment for BCBG Max Azria Group
On May 25, the President of the Commercial Court of Paris ordered Showroomprivé.com, the second largest online private sale store in France, to pay BCBG Max Azria Group (“BCBG”) 588,000 euros in accordance with a contract signed on March 29, 2012.
BCBG had agreed to sell its women’s clothing wholesale to Showroomprivé.com, which intended to retail that merchandise online. After two weeks of negotiation in which Showroomprivé.com viewed 88 product samples, both sides signed a contract for the sale of 61,492 products at a price of 1.1 million euros. Showroomprivé.com had agreed to pay 588,000 euros when the contract went into effect.
The day after the contract was signed, however, Showroomprivé argued that it had made a mistake on the substance of the products and that the contract was void. Showroomprivé.com refused to pay and tried to renegotiate the contract.
The President of the Commercial Court agreed with Hughes Hubbard's argument that the contract was clear and that Showroomprivé.com could not question it on the basis of 88 product samples.
The decision is noteworthy in that the President of the Commercial Court of Paris rarely orders a party to pay such a significant amount in interlocutory proceedings.
Marc Henry, Ludmilla Balandine and Mathilde Pardoux represented BCBG Max Azria Group in this case.
Hughes Hubbard Tops AmLaw's 'A-List' Once Again
Hughes Hubbard leads The American Lawyer’s “A-List” – a list of the nation’s most elite law firms – for the second year in a row. The magazine cited the firm’s “sustained excellence” behind the achievement in its July/August issue and stated the list aims “to identify firms that represent the all-around best.” Hughes Hubbard first made the A-list one year after the magazine started publishing it, in 2003, and has been consistently ranked since 2006 – rising to second place in 2009 and 2010 and to first place in 2011.
“We are thrilled with this,” HHR Chair Candace Beinecke told the firm after announcing the news on June 20. “Our two years as No. 1 on the A-List reflect critical aspects of our firm,” she said. “Above all, topping the A-List reflects our ability to continue to earn our clients’ trust to handle their most significant matters. Their needs are our needs, and our lawyers tend to be happiest when engaged on our clients’ most important and interesting work.”
The magazine calculates total scores for each A-List firm with a formula that assigns a number from one to 200 for RPL, pro bono, diversity and associate satisfaction, based on how the firm ranked in each category among The Am Law 200. “The A-List ranking measures our success as a firm in more than just dollars. So do we,” Beinecke told the magazine. “Every one of the A-List factors is a priority for us and has been long before it was measured,” Beinecke said.
Chambers USA Recognizes HHR Attorneys, Practice Groups
Chambers USA recognized 26 Hughes Hubbard attorneys, including two for the first time, and 10 practice groups in its 2012 Guide to America’s Leading Business Lawyers.
The following attorneys were ranked or named: Ned Bassen, Candace Beinecke, Andy Braiterman, Charles Cohen, Amanda DeBusk, Amy G. Dulin, John Fellas, James Fitzpatrick, Jim Giddens, Freddie Goudie, Steven Hammond, John Hoyns, Ken Lefkowitz, Ed Little, Bill Maguire, Ted Mayer, Jim Modlin, Joanne Osendarp, Chris Paparella, Ken Pierce, Chuck Samuelson, Dan Schnapp (for the first time), Nick Swerdloff, John Townsend, Bill Weber and Marc Weinstein (for the first time).
The firm’s practice areas ranked by state are: Latin America Investment (Florida and New York); Bankruptcy/Restructuring; Corporate M&A; Litigation: Securities; Media & Entertainment. Practice areas ranked nationally include International Arbitration; International Trade; Product Liability & Mass Torts; and Transportation: Aviation: Finance.
Chambers, regarded as one of the top ratings agencies in the nation, bases its rankings on the recommendations of clients and lawyers throughout the U.S. Attorneys are ranked on qualities such as technical ability, professional conduct, client service, commitment, diligence and commercial awareness.
Here’s what Chambers and sources say about the firm’s practice groups:
Latin American Investment: Florida
“Finance remains the focus of this firm’s Miami team, while its New York attorneys are especially prominent on M&A mandates. The group is proficient representing borrowers and lenders, and earns high praise from local counsel in Latin America.”
Sources say: “Responsive and pleasant to deal with.” “The firm is very proactive and business-oriented.”
Latin American Investment: New York
“This firm’s New York and Miami offices complement each other, with the former handling many of the top M&A matters. The growing team continues to raise its profile among its peers.”
Sources say: “It’s a proactive firm, business-oriented and flexible on fees.”
Bankruptcy/Restructuring: New York
“Despite the departures of Michael Luskin and Richard Stern in April 2012, Hughes Hubbard maintains a strong reputation for undertaking broker-dealer matters and for its roles as trustee – largely in part to the highly respected James Giddens – in some of the sector’s largest bankruptcies.”
Sources say: “Well thought-out approach to looking at any particular situation.” “Thorough and strategic; highly skilled problem solvers and excellent negotiators.”
“Covering a full range of corporate matters, Hughes Hubbard has had a strong year in terms of deals and clients. The enthusiastic team carries its M&A expertise into the pharmaceutical, media and financial services industries.”
Sources say: “High-caliber, collegial people.” “They work well for smaller, medium and big clients.”
Litigation: New York
“This team wins praise for its solid capabilities in both securities litigation and white-collar criminal defense work. The group also offers particular expertise in the products liability, class action and intellectual property areas, combined with solid trial experience.”
Sources say: “The firm demonstrated extremely thorough research, was well prepared, had good court presence and great support staff.”
Media & Entertainment: Corporate: New York
“This 20-strong team is a one-stop shop for a range of clients with media and entertainment corporate needs. It has a bicoastal reach and vast experience in the TV and film industry.”
“This highly commended practice group remains a recognized force in the market, with expertise spanning commercial and investment treaty arbitrations and strong capabilities whether advocating or sitting as arbitrators.”
“2011 was a year of significant growth for this practice, which gained three practitioners through lateral hires.”
Sources say: “I have been very impressed by the caliber of the practitioners.” “They really understand the complexities of export controls, and can answer very complicated technical questions.”
Product Liability & Mass Torts
“This group focuses primarily on pharmaceutical and tobacco litigation, but also offers a high level of expertise in toxic torts involving such issues as contamination and pollution. Its strength in case management and coordination allows it to handle large dockets with thousands of individual complaints.”
Client Service: “They are excellent in the subject matter, pragmatic, responsive, dedicated, flexible and collaborative.”
Transportation: Aviation: Finance
“This team of 20 attorneys covers the full range of aviation finance. Traditionally, it has worked for leading airlines, such as Continental Airlines and United Airlines, but it is increasingly active on high-end financial work for the likes of Citibank and Bank of America.”
Sources say: “They are active, knowledgeable and do a great job.”
HHR Advises Real Estate Firm in PPP With French Agency
Hughes Hubbard helped real estate management company Bati Lease (“Bati”) negotiate various contracts worth 12 million euros for the design, construction, financing and maintenance of two exhibition halls for Grand Poitiers metropolitan authority, a French government agency. The transaction closed on May 22.
Under a public-private partnership, Bati will supervise the construction of two new exhibition halls for Grand Poitiers and manage the property for 25 years. Grand Poitiers, which awarded the competitive contract to Bati, becomes the owner after 25 years or if the leasing agreement is terminated early.
BTP Banque loaned 10 million euros to Bati to finance the construction and maintenance projects. Bati entered into a property development contract worth 8.4 million euros with construction firm Etablissements Boutillet S.A.S., and a 3.5 million euro maintenance contract with GDF Suez Energie Services-Cofely.
Etablissements Boutillet is scheduled to start building the exhibition halls as soon as it has obtained administrative authorizations, expected no later than early 2013. The halls are scheduled to open in late 2013 or early 2014. They will be used for fairs, forums or events.
An affiliate of Crédit Coopératif, Bati is licensed to provide property leases and has considerable experience in property ownership, promotion and supervision of real estate projects. Located in eastern France, Grand Poitiers metropolitan authority coordinates the services and projects for 12 French towns with a total population of approximately 138,000. In addition to services such as urban transport and sanitation, the authority is in charge of setting up city development projects.
Sena Agbayissah led the HHR team, which included Aurélie Bossert, Agnès Braka-Calas and Laurence Aloup.
Hughes Hubbard Helps Rothschild and Rockefeller Join Forces
Hughes Hubbard helped unite two of the world's most famous business dynasties in a strategic partnership designed to give Europe's Rothschild investment trust a presence in the U.S. and to boost the Rockefeller group's wealth and asset management business.
RIT Capital Partners (“RIT”), a London-based investment firm chaired and part-owned by Lord Jacob Rothschild, agreed on May 30 to acquire from Société Générale SA a 37 percent stake in asset manager Rockefeller Financial Services (“RFS”), a client of HHR. The transaction is expected to close by the end of September.
RFS is the parent company of Rockefeller & Co., which dates back to 1882, when John D. Rockefeller created one of the world’s first family offices to manage his wealth. Today Rockefeller & Co. provides wealth and asset management services to other families, foundations and institutions, with $34 billion in assets under administration.
“This partnership is based on the unique strengths and attributes of our respective businesses, creating new opportunities for our clients, investors and other stakeholders,” said Reuben Jeffrey III, chief executive of Rockefeller & Co. “We look forward to working closely with RIT and Lord Rothschild as we continue to provide value added financial products and services to our diversified client base.”
Gary Simon and Marina Ufaeva represented Rockefeller Financial Services in the deal.
U.S. Court Awards Dairyland $12M in Spent Fuel Case
Hughes Hubbard secured a decisive victory for Dairyland Power Cooperative on April 27 when the U.S. Court of Federal Claims awarded the electric utility $12 million in connection with its investment in Private Fuel Storage ("PFS"), a spent nuclear fuel storage facility.
In the early 1980s, the government agreed to take possession of spent nuclear fuel produced during electricity generation. In the ensuing years, it became clear that the government would not be able to follow through, thus breaching the agreement and leaving the storage of the spent nuclear fuel up to the utilities themselves. As a result, Dairyland took steps to mitigate the government’s breach of contract, including joining an effort with several other utilities and the Skull Valley Band of Goshute Indians to create PFS on the Indian Tribe’s reservation in Skull Valley, Utah – away from the site of any nuclear reactor.
Dairyland sought to recover its investment in PFS at its initial trial against the government in 2008. In 2009, the Court of Federal Claims awarded Dairyland $37.6 million in damages incurred through 2006, which represented the entirety of its PFS investment along with substantial other damages.
In 2011, the Federal Circuit affirmed the bulk of Dairyland’s damage award, but it vacated the $12 million PFS portion. The Federal Circuit remanded Dairyland’s PFS claim back to the Court of Federal Claims for further investigation to determine whether Dairyland’s PFS investment was motivated by mitigation or speculation.
During oral argument on March 28, the government asserted that, in addition to determining whether to offset for speculation, the Court of Federal Claims was required to re-examine the reasons behind Dairyland’s investment in PFS and to perform an accounting of the residual value of the PFS stock. But HHR persuaded the court that all of Dairyland’s PFS damages were in mitigation and that the additional issues raised by the government should not be considered. The Court of Federal Claims reinstated the entirety of Dairyland’s PFS claim.
“The Court finds that Dairyland established its damages by a preponderance of the evidence and that the government’s arguments to the contrary are unpersuasive,” the court said in its opinion.
Robert Shapiro, with help from Daniel Lloyd, represented Dairyland Power Cooperative.
Laramie Wins Approval to Sponsor Delta Petroleum's Ch. 11 Plan
The firm won Bankruptcy Approval for HHR client and Chapter 11 debtor Delta Petroleum Corp. to join forces with Laramie ll LLC on a reorganization plan that will create a valuable new joint venture company and raise $75 million in new financing to repay creditors.
On May 8, U.S. Bankruptcy Judge Kevin J. Carey signed off on Delta’s selection of Laramie as a so-called “plan sponsor.” Under the deal, the two natural gas exploration and development companies will form a new company called Piceance Energy LLC. Laramie will own a two-thirds stake and Delta will hold the other third.
Piceance will receive a $400 million secured revolving credit facility from J.P. Morgan Securities LLC and Wells Fargo Bank N.A. Delta will use $75 million of the loan to repay its creditors; Laramie will use $25 million to repay its existing bank debt.
Katie Coleman told Judge Carey that in addition to its stake in the joint venture, the reorganized Delta will retain other assets, including certain tax attributes and oil and gas interests outside the Piceance Basin in Colorado.
“This is a time of historically low commodity prices for natural gas,” she said, according to Law360. The joint venture offers “the best chance for all stakeholders to avoid being cashed out at a low value, which is unfair because we think it is a matter of timing.”
In December, Denver-based Delta filed for Chapter 11 bankruptcy protection. In March, Delta scrapped its planned asset sale in favor of plan sponsorship after realizing that the asset sale would not capture certain tax attributes of substantial value. Laramie won the rights to sponsor Delta’s plan during a competitive auction on April 24-25. The reorganization plan is expected to take effect in the summer.
In addition to Coleman, Andy Braiterman, Ned Bassen, Pat Gartland, Alex Anderson, Chris Gartman, Peter Beardsley, Ashley Laurie and Andrew Midgett are representing Delta.
Hughes Hubbard Helps Benihana Go Private for $296M
Hughes Hubbard advised Japanese-themed restaurant chain Benihana Inc. in its agreement to be acquired by private equity firm Angelo Gordon & Co. for approximately $296 million in cash.
The deal, announced May 22, marks the culmination of a saga stretching back to July 2010, when Benihana first explored strategic alternatives, including a possible sale of the company. HHR was brought on board shortly thereafter as legal advisor through Benihana’s general counsel, Cristina Mendoza, who previously served as general counsel to HHR clients Florida International University, Visa Latin America, HBO Latin America Media Services and Knight-Ridder. The first strategic alternatives process was terminated in May 2011 upon the decision to reclassify Benihana's dual-class common stock structure into a single class.
Under the terms of the transaction, which is expected to close in the second half of 2012, Angelo Gordon will pay $16.30 in cash for each share of Benihana, a premium of approximately 41 percent over the stock’s trading levels before the announcement of the Company's new strategic alternatives process on March 13, 2012.
“After evaluating the company’s strategic alternatives, we are pleased to reach agreement with Angelo Gordon,” Benihana president, chairman and CEO Richard C. Stockinger said in a statement. “We feel that this transaction with Angelo Gordon recognizes the value of the Benihana brands and delivers a significant cash premium to the company’s shareholders.”
Benihana, the nation’s leading operator of Japanese theme and sushi restaurants, will be free to consider alternative proposals through July 1 under a “go shop” provision.
Ken Lefkowitz and Ellen Friedenberg led the HHR team with assistance from Chuck Samuelson, Steve Greene, Michael Traube, Kathleen O’Donnell, Erin DeCecchis, Jerry Harrison, Andy Braiterman, Gary Simon, Ethan Litwin, Wayne Josel, Alison Peyser, Arinze Ike, Alex Anderson, Chris Wild, Marina Ufaeva and Ross Lipman. Lefkowitz was quoted in The Deal and mentioned, along with the firm, in other news outlets widely reporting the transaction, including The Wall Street Journal, Reuters and Law360.
Firm's $3B Financing for Mining Giant Named 'Loan of the Year 2011'
A transaction involving Hughes Hubbard that secured a $3 billion credit line for Brazilian mining giant Vale from a consortium of 27 international banks with historic low fees and margins was named 'Loan of the Year 2011' by IFR magazine.
In a recent article headlined “Into the Premiere League,” International Financing Review, which covers capital markets, called the deal a “watershed that repriced the market in Latin America and set a precedent for its peers in the region to access European pricing.”
“For leading the way and positioning the borrower as a global player, Vale’s U.S. $3bn five-year revolver is IFR’s Latin America Loan of the Year,” the article reads.
Hughes Hubbard was the lead counsel for Vale, the world’s second largest mining company, in the April 2011 transaction. Vale added the revolving credit facility to an existing $1.6 billion revolving credit line due to mature in 2011 and 2012. The deal was structured to allow Vale’s subsidiaries to draw upon the fund during its five-year timeframe. The financing was designed as a “short term liquidity buffer” to enhance the company′s liquidity and allow more efficient cash management.
IFR noted that several other landmark transactions in 2011 copied the structure of this deal. “The wide syndication alone would be noteworthy, given that most deals in Latin America since 2008 were club syndications,” the article reads. “But the transaction was also savvy in terms of timing, since it took advantage of bottled up demand and launched before volatility hit in mid-2011.”
The consortium of banks was led by Crédit Agricole, Mizuho and Natixis. Other members included HSBC, Société Générale, Deutsche Bank, Citibank, Morgan Stanley, Credit Suisse and Goldman Sachs.
Amy G. Dulin, Mark Denham and Emilio Saiz worked on the transaction.
Greenbriar Acquires Top Lubricants Distributor
The firm helped Greenbriar Equity Group LLC acquire PetroChoice, a top distributor of petroleum lubricant solutions, from KRG Capital Partners in January.
Pennsylvania-based PetroChoice is the largest distributor of consumable commercial, industrial and passenger vehicle lubricants in the Mid-Atlantic and Upper Midwest. Its customers work across a range of industries, including original equipment manufacturing, off-highway construction, surface mining, energy, metal working, food processing and passenger automotive.
“PetroChoice has grown significantly under the leadership of KRG Capital Partners. We look forward to continuing this trajectory by now partnering with Greenbriar Equity Group,” Shane O’Kelly, chief executive officer of PetroChoice, said in a press release. “Greenbriar’s successful track record of building businesses, and its distribution and logistics expertise make it a terrific partner for PetroChoice going forward.”
Jill Raker, managing director of Greenbriar Equity Group, added: “We are very impressed with the leadership position PetroChoice has built in the lubricants supply chain. We look forward to supporting management’s efforts to grow the business both organically and through strategic acquisitions.”
Greenbriar, a private equity firm with $1.5 billion of committed capital, focuses exclusively on the global transportation industry and transportation-related manufacturing, including companies involved in freight and passenger transport, aerospace and defense, automotive, logistics and distribution and related sectors.
The HHR team that worked on the deal included Chuck Samuelson, Ken Lefkowitz, Alex Anderson, Andy Braiterman, Valerie Clark, Erin Dececchis, Tom Furst, Bruce Goldberger, Steve Greene, Wayne Josel, Kyle Leingang, Ross Lipman, Ethan Litwin, Travis Rundlet and Sam Sultanik.
HHR Settles Patent Licensing Feud Between Discovision and Fujifilm
Hughes Hubbard settled a four-year dispute regarding how much Fujifilm Corp. owed firm client Discovision Associates under the terms of a patent licensing contract for digital discs (CDs, DVDs, etc.) sold by Fujifilm.
Fujifilm agreed to pay Discovision an eight-figure settlement after the Commercial Division of the New York Supreme Court granted HHR partial summary judgment in January.
Discovision, an optical-technology licensing subsidiary of Pioneer Electronics, launched the suit in June 2007, based on a nonexclusive licensing agreement made in 1995 that gave Fujifilm access to Discovision’s patents in exchange for a royalty fee.
The contract permitted Fujifilm to license patents covering the manufacture and sale of digital discs, but the two sides disagreed on whether Discovision was entitled to royalties for licensed products regardless of whether they used the licensed patents. Discovision argued that the contract granted the “right to use,” which means royalties are due on the sale of each licensed product regardless of whether a licensed patent was used. Fujifilm contended that the contract required royalty payments only in the event of “actual use,” which means royalties are due only on sales of licensed products that use the licensed patents.
In 2009, the Commercial Division held that the language of the contract was “ambiguous” as to whether it was an actual use or right to use agreement — a ruling affirmed by the Appellate Division in 2010.
In the latest ruling, Justice Shirley Werner Kornreich of the Commercial Division granted summary judgment in favor of Discovision’s claims for royalty payments due on or after June 4, 2001.
Bill Bisset and Noah Graff led the HHR team in the matter.
HHR Settles Copyright Ownership Dispute for Golf Photographer
Hughes Hubbard successfully negotiated a settlement pro bono for famed golf photographer Jules Alexander with a California winery contesting his copyright ownership of iconic photos he took of golfing legend Ben Hogan at the 1959 U.S. Open.
The U.S. District Court for the Central District of California dismissed the copyright infringement and breach of contract case on March 5, after HHR orchestrated the settlement in late February.
In January 2009, Alexander granted a six-year limited license agreement to JanKris Vineyards for limited commercial use of six pictures on a Ben Hogan wine label. JanKris, however, exploited the six pictures in an unauthorized manner, including significantly altering the photos — replacing a cigarette in Hogan’s hand with a glass of wine — without permission, and using a seventh unlicensed photo belonging to Alexander.
When Alexander demanded that the infringing uses cease and desist, JanKris sued him in 2011, contesting copyright ownership and seeking more than $1 million in damages for alleged interference with its business. HHR brought counterclaims on behalf of Alexander.
The settlement HHR designed preserves Alexander’s intellectual property rights and secures appropriate compensation for the misuse of his photos. JanKris may use the unaltered photos of Hogan until the license agreement ends in January 2015.
Alexander was represented by Carla Kerr, Alex Spjute and Michael Bareket.
HHR Saves Statek's $85M Malpractice Claim Against Failed Law Firm
Hughes Hubbard succeeded in resuscitating Statek Corp.'s $85 million malpractice claim against defunct law firm Coudert Brothers LLP for representing two former Statek employees who defrauded the Swiss quartz manufacturer's parent company out of millions of dollars.
On Feb. 28, the Second Circuit reversed a lower court’s decision to dismiss Statek’s claim as time-barred under New York law since Statek originally filed suit in Connecticut.
“The Second Circuit made it clear that the only equitable result is to preserve the claim because it was filed on time in Connecticut,” Ed Little, who argued the appeal, told Law360, one of the media outlets covering the ruling.
For almost 12 years, Statek’s U.S. operations were run by Hans Frederick Johnston, who, along with his associate, Sandra Spillane, looted the company of millions using the services of Coudert, Statek’s corporate law firm. Lawyers in Coudert’s London office helped Johnston create secret shell corporations; move money and assets offshore; assist with West Indian real estate purchases; and remove a multimillion dollar art and stamp collection.
The lawyers allegedly did not knowingly assist in Johnston’s criminal activities, but negligently complied with his suspicious requests and, when he was forced out of the company in 1996, failed to provide Statek with timely information and documents relating to Coudert’s “services.”
In 1999, Johnston, then 72, was convicted in a British court of hiring hitmen to kill the Statek executives responsible for exposing his crimes. He was released after a short sentence and was able to move most of the stolen assets beyond Statek’s reach due to Coudert’s failure to make full and timely disclosure to Statek’s owner.
In 2005, Statek sued Coudert in Connecticut, where Johnston had operated. After Coudert filed for bankruptcy in New York, Statek’s suit was stayed, and the company was compelled to file its proof of claim. However, U.S. Bankruptcy Judge Robert Drain granted the trustee’s motion to disallow Statek’s claim as time-barred, applying New York law with its shorter statute of limitations. Hughes Hubbard was hired to handle the appeal.
The Second Circuit held that the law of the original forum ought to have followed the case, which was effectively “transferred” by being stayed and then pursued by proof of claim in bankruptcy court.
The bankruptcy court has been directed to apply Connecticut’s choice of law on remand, presumably resulting in the application of its statute of limitations. Hughes Hubbard will continue to represent Statek in the litigation. Coudert, while short of assets for distribution, has malpractice insurance that covers the bulk of the claim.
In addition to Little, Lisa Cahill, Jason Zakai and Dustin Smith handled the appeal with assistance from Katie Coleman and Andrew Midgett.
Firm Successfully Defends Delta Petroleum Against Creditors
Hughes Hubbard successfully defended Delta Petroleum Corporation (“Delta”), a Denver-based oil and natural-gas explorer and developer that filed for Chapter 11 bankruptcy protection in December, against creditors who were trying to assert spurious liens for nearly $400,000 already paid.
On March 9, addressing an issue apparently of first impression, the U.S. Bankruptcy Court for the District of Delaware voided liens filed by two creditors. The court ruled that the liens violated the “automatic stay,” which generally protects debtors and their property from creditor actions in bankruptcy proceedings.
The ruling came four days after Hughes Hubbard sought relief for Delta and two days after the firm won a temporary restraining order preventing the creditors from filing more liens.
The creditors contended their post-petition liens to secure payments — $240,000 to one creditor and nearly $140,000 to another — made by Delta within the 90-day period prior to bankruptcy did not violate the automatic stay because those liens would be valid if they had not been paid. The creditors claimed their “contingent preference liens” presented “no harm, no foul” to Delta since the liens were contingent on pre-petition payments being avoided as preferences.
But Hughes Hubbard argued that, certain exceptions notwithstanding, the automatic stay prohibits any post-petition filing of liens against a debtor. While one exception permits post-petition liens against a debtor if such liens would arise automatically by statute under applicable non-bankruptcy law, Colorado law requires that any lien secure an outstanding indebtedness. Therefore, the creditors had no right to file liens under Colorado law and, ultimately, the Bankruptcy Code, since the creditors had already been paid in full for the amounts they sought to secure.
The Bankruptcy Court held that the “contingent preference liens” violated the automatic stay and therefore constituted per se irreparable harm that required no further showing of harm to warrant relief. Thus, the Court declared the “contingent preference liens” void, prohibited the creditors from filing additional liens and ordered them to remove and terminate all existing “contingent preference liens.”
Katie Coleman is leading Hughes Hubbard’s representation of Delta. Chris Gartman argued the motion. George Tsougarakis, Alex Talesnick, Peter Beardsley and Ashley Laurie also assisted in securing the victory.
Firm Wins Landmark Case for French Savings Bank
Hughes Hubbard won a landmark decision for the Caisse d'Epargne ("CELDA"), a French savings bank belonging to the BPCE Group, which is one of the largest banks in France.
On April 19, the Financial Markets Authority (“AMF”), the French counterpart to the SEC, dismissed the claim brought in 2011 by the AMF prosecuting commission against CELDA and three other savings banks of the BPCE group over an investment fund called Doubl’ô. The AMF ruled the statute of limitations had expired. The decision allowed CELDA to avoid paying a fine of 1 million euros.
AMF’s decision rested on when the three-year statute of limitations had started ticking. The AMF’s disciplinary committee agreed with Hughes Hubbard that the clock started ticking after the bank commercialized Doubl’ô between June 2001 and April 2002. During that time, commercial leaflets claimed the product could “double your capital quietly” in six years. But the prosecuting commission said that the investors, who invested a total of 2 billion euros, only recovered their capital, minus the management costs, in that time period.
The prosecuting commission of the AMF argued the clock should have started to tick in 2008 when the investors realized that Doubl’ô would not meet their expectations, and that the principles applicable to the statute of limitation for financial criminal offenses should be transposed to the regulatory matter.
“This decision is a very interesting analysis of the starting point of the limitation period of three years,” Marc Henry told L’Agefi, a leading French finance newspaper. “It is quite clear that it lies at the time of the relevant facts.”
AMF’s decision garnered widespread news coverage. Henry was also interviewed by AFP; Les Echos, the leading French economic newspaper; and Le Parisien. Hughes Hubbard is mentioned in both Les Echos and L’Agefi.
In addition to Henry, Ludmilla Balandine and Mathilde Pardoux represented Caisse d’Epargne.
Click here to read the English translations of the Le Parisien and Les Echos articles.
Hughes Hubbard Recognized in Chambers Global 2012
Hughes Hubbard's practice areas and attorneys are recognized in Chambers Global's latest edition.
In the 2012 edition, the firm was ranked as a global leader in International Arbitration: Global-wide; International Arbitration: Latin America; Dispute Resolution: International Arbitration: France; Banking & Finance: Latin America; Corporate/M&A: Latin America; and International Trade: USA.
Chambers Global covers 180 countries and focuses on lawyers practicing internationally with particular attention to cross-border work. Below are excerpts of what clients told Chambers about the firm's practices.
"Hughes Hubbard is 'a very impressive firm with an outstanding practice' in international arbitration."
"The firm's banking & finance practice is "more than excellent: the lawyers are solution-driven and creative, and make me feel like their only client."
"The corporate/M&A team "is a model of proficiency, quality and commitment at all levels."
Lehman Team Prevails in UK Supreme Court Decision
Jim Giddens, the Trustee for Lehman Brothers Inc. (“LBI”), the U.S. broker-dealer of Lehman Brothers, scored a major victory when the British Supreme Court ruled that billions of dollars in customer accounts that weren’t properly separated belongs to LBI customers.
The Feb. 29 landmark decision caps a three-year battle for Giddens and affirms an appellate-court ruling that customers whose money LBIE, the Lehman Brothers European broker-dealer, failed to properly segregate could claim from a protected pool of some $2 billion in cash the European unit had set aside in segregated accounts.
Lord Justice John Dyson issued a 75-page ruling that stated “all client money is subject to a trust that arises upon receipt of the money.” While firms are legally required to separate customer money from their own, LBIE failed to do this “on a truly spectacular scale.”
Giddens said he was pleased with the ruling, which supports the “Trustee’s Securities Investor Protection Act mandate to protect customer property and make LBI’s customers and other creditors whole to the greatest extent.”
“Property that should have been segregated for U.S. customers of the failed broker-dealer belongs to those customers whether it was properly segregated or not,” he said in a statement. Giddens added that “substantial progress has been made toward marshaling billions of dollars in assets for the LBI estate,” and that he “continues to move toward formalizing the distribution process for assets under control of the estate.”
Giddens controls more than $23 billion in assets to repay LBI’s customers and creditors. His team has transferred over 110,000 customer accounts with a value of more than $92 million out of LBI since the broker-dealer collapsed in 2008.
The Trustee is represented by Jim Kobak, Chris Kiplok and a large team within the firm. In connection with U.K. matters, Bill Maguire, Michael Salzman, John Hoyns, Beatrice Hamza Bassey, Neil Oxford, Jason Benton and many others assisted the Trustee.
Hughes Hubbard Advises Delta Air Lines in $180M Refinery Acquistion
Hughes Hubbard advised Delta Air Lines, the world's second-largest carrier in the world, in its $180 million acquisition of the ConocoPhillips oil refinery in Trainer, Pa. The deal, announced April 30, marks the first ever purchase of an oil refinery by an airline and will allow Delta to tackle rising fuel costs.
Delta made the acquisition through its subsidiary, Monroe Energy, and will spend only $150 million after receiving $30 million from the state of Pennsylvania as part of a deal to support job creation. The acquisition includes pipelines and transportation assets that will provide access to the delivery network for jet fuel reaching Delta's operations throughout the Northeast. Production at the refinery, combined with multiyear agreements to exchange gasoline, diesel and other products from the refinery for jet fuel, will provide 80 percent of Delta's jet fuel needs in the United States.
"Acquiring the Trainer refinery is an innovative approach to managing our largest expense," said Richard Anderson, Delta's chief executive officer. "This modest investment, the equivalent of the list price of a new widebody aircraft, will allow Delta to reduce its fuel expense by $300 million annually and ensure jet fuel availability in the Northeast. This strategy is aligned with the moves we have made to build a stronger airline for our shareholders, employees and customers."
The firm's role advising Delta was highlighted in The Deal. Other publications reporting on the news include The New York Times, The Wall Street Journal, Bloomberg, Reuters, among others.
Ken Lefkowitz and Chuck Samuelson led the HHR team, which included Julie Hanus and Kyle Leingang.
HHR Wins Defense Verdict for Lorillard in Kentucky
Hughes Hubbard scored a sweeping victory in January for Lorillard Tobacco Company in a products liability case. A state court jury in Louisville, Kentucky found that Lorillard was not liable in a wrongful death suit filed by the widow of a former employee alleging he developed cancer from exposure to asbestos in the filter of original Kent cigarettes.
The trial victory is the first for Lorillard since Hughes Hubbard opened a Kansas City, Missouri office in the new year to focus on the company’s litigation needs.
“This verdict is a major victory for Lorillard against experienced and aggressive counsel in a plaintiff-friendly jurisdiction,” said James Berger, who led the Hughes Hubbard team in the case. “Despite the odds, our team rose to the occasion and convinced the jury that Lorillard acted responsibly in designing, testing and selling Kent with the asbestos-containing filter in the 1950s.”
On Jan. 26, after a 16-day trial, the jury returned a complete defense verdict for Lorillard and its component part supplier Hollingsworth & Vose (“H&V”), maker of the filter media used in the original Kent cigarettes. Twenty-eight other defendants settled or were dismissed before the trial began.
The jury found that neither the cigarette filter nor H&V’s bulk filter material was defectively designed; that neither Lorillard nor H&V had failed to warn McGuire of the risk of asbestos release in the filter; and that any fibers released when McGuire smoked the cigarettes did not contribute to his disease.
Wanda McGuire claimed that her late husband, William McGuire, developed mesothelioma from smoking original Kent cigarettes with an asbestos-containing filter in the early 1950s. She also alleged his cancer was a result of his exposure as a Lorillard factory worker from August 1953 to September 1954 to the bulk material supplied by H&V used to make the Kent filters. She sought compensatory damages of up to $15.3 million and punitive damages of up to $40 million.
Lorillard argued that the original Kent filter was a highly efficient, state-of-the-art filter. Testing of the filter in the 1950s demonstrated that it either released no asbestos fibers or only trace amounts that would be insufficient to cause disease. The disease at issue in the case, mesothelioma, was not definitively linked to asbestos until four years after Lorillard stopped using it as a component in its filters in 1956.
The HHR members on Berger’s team included Tara Lamer, Sally Merriam, Mike Mitchell and Kathy Jeanetta. Ricardo Cedillo of Davis, Cedillo & Mendoza in San Antonio and David Schaefer of Dinsmore & Shohl in Louisville were co-counsel for Lorillard.
Discussion on the Cloud with Mira Edelman
On January 20, Mira Edelman was interviewed by The Cowen Group after a roundtable breakfast that focused on Cloud computing and the impact it has on eDiscovery. The article entitled “Discussion on the Cloud with Mira Edelman” appeared on the January/February issue of The Cowen Group newsletter.
Merck Sells 50% Interest in Joint Venture With Johnson & Johnson
Hughes Hubbard recently helped Merck end its 22-year partnership with Johnson & Johnson (“J&J”) to develop, market and distribute certain over-the-counter products, such as Pepcid and Mylanta, in the U.S. and Canada.
Merck announced in September that it was selling half its stake in a pharmaceutical joint venture with J&J for a one-time payment of $175 million. The venture was acquired by J&J through its McNeil-PPC subsidiary and other affiliates. The entity has changed its name from The Johnson & Johnson Merck Consumer Pharmaceuticals Co. to McNeil Consumer Pharmaceuticals Co.
In a press release, Merck said it decided to sell its interest in the joint venture to focus fully on building the consumer products division obtained from the merger with Schering-Plough in 2009.
The sale gives the company “greater freedom to operate in the OTC consumer sector allowing Merck to fully exploit its pipeline of Rx-to-OTC switches as well as actively pursue OTC licensing activities in the U.S. and Canada,” Merck said. Merck still maintains the rights to the Pepcid brand outside the U.S. and Canada.
Dan Weiner, Jim Modlin, Dan Litowitz, Arinze Ike and Jaime Steinfink worked on the sale.
Cenveo Sells Document Business to Ennis
Hughes Hubbard represented Stamford, Conn.-based Cenveo, Inc. in the sale of its forms and business documents group to Ennis, Inc., a Texas-based maker of printed business products and apparel, which closed on Feb. 10, 2012.
Cenveo, a leading global provider of print and related resources, said the sale — including the $80 million Printegra and PrintXcel brands — is expected to better position the company for continued growth and success.
“Cenveo’s Documents Group has built its leading position and strong reputation on producing business forms and document products to meet a variety of business customer needs,” Chairman and CEO Robert G. Burton Sr. said in a press release. “This divestiture allows Cenveo to focus on our core operations including labels, specialty packaging, envelopes, print and content management.”
Ken Lefkowitz and Dan Litowitz led the HHR team, which included Andy Braiterman, Sam Sultanik, Alex Anderson, Wayne Josel, Bruce Goldberger, Tom Furst, Jenny Liang, Robyn Morris and Erin DeCecchis.
TransGaming Acquires Oberon Media's TV Game Division
Hughes Hubbard represented Oberon Media, a publisher of video games, in TransGaming Inc.’s acquisition of Oberon Media’s interactive TV game division last month, resulting in one of the largest Internet-connected TV distribution footprints in the world.
Toronto-based TransGaming paid approximately $7 million for substantially all of the assets of Oberon’s Interactive TV (iTV) & Connected TV division, which has distribution agreements with manufacturers of “smart“ TVs, televisions that are Internet-ready and gaming-capable. Oberon also has distribution agreements with a network of cable, satellite TV and interactive TV service providers, including Dish Network and DirecTV in North America and Reliance Digital TV and AirTel Digital TV in the Asian markets.
Together, the distribution agreements will give TransGaming a recurring multimillion-dollar annual revenue stream and access to more than 50 million households with connected TVs.
The $7 million price tag included $3 million in cash paid at closing on Jan. 6, 2012, up to $2 million in cash pursuant to earn-outs payable based on revenue targets in 2012 and 2013, and the issuance at closing of 4 million shares of TransGaming, which is listed on the TSX Venture exchange.
“Our team that has worked within the interactive TV business has developed an extremely strong presence in this market, and we’re delighted that they will be able to move to TransGaming and continue this success,” said Bob Hayes, president and COO of Oberon Media.
“Through this combination of assets, we are also confident that our customers will have a terrific interactive TV experience moving forward. This transaction marks an important step in our transformation of Oberon into a streamlined and highly focused company.”
Hayes said Oberon, founded in 2003, will now focus its efforts on building its recently launched Blaze e-commerce platform.
The HHR team that worked on this deal included Ken Lefkowitz, Jim Bluck, Dan Litowitz, Alison Peyser, Wayne Josel, Matt Syrkin, Alex Anderson and Bruce Goldberger.
4 Ways an eDiscovery Attorney Can Make Your Firm More Successful
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