Morrison & Foerster, White & Case: Business of Law
By Elizabeth Amon - Jun 21, 2013 7:43 AM ET
Hewlett-Packard Co. (HPQ) switched its lawyers in litigation brought by investors who are suing over the company’s $8.8 billion writedown stemming from its acquisition of Autonomy Corp.
Morgan Lewis & Bockius LLP lawyer Robert E. Gooding Jr. and his team have been replaced by Morrison & Foerster LLP’s Darryl P. Rains and Judson E. Lobdell, according to the filing yesterday in federal court in San Francisco.
Hewlett-Packard, the largest personal computer maker, faces shareholder lawsuits stemming from its Nov. 20 announcement that it was taking a multibillion-dollar writedown on the value of British software maker Autonomy, which it agreed to buy for $10.3 billion in 2011.
Rains represented Charles Schwab Corp. (SCHW) in shareholder lawsuits over losses in its YieldPlus Fund. San Francisco partner Lobdell represented Patricia Dunn, former chairwoman of Hewlett-Packard, in a criminal case that was dismissed in 2007 and in related civil litigation.
Morgan Lewis partner Leslie Caldwell said by phone she will continue to serve as Hewlett-Packard’s liaison to federal prosecutors investigating whether Autonomy employees lied about the company’s performance.
More than $5 billion of the writedown was the result of accounting practices at Autonomy, Hewlett-Packard said in November. About $200 million of Autonomy’s revenue had been recorded prematurely or improperly, the company’s general counsel said.
Michael Thacker, a spokesman for Palo Alto, California-based Hewlett-Packard, declined to comment on the replacement of the investor litigation lawyers on behalf of the company and its general counsel’s office.
Jennifer Costa, a spokeswoman for Morgan Lewis, declined to comment on the firm’s replacement.
Other Morgan Lewis lawyers replaced in the case include partners Marc J. Sonnenfeld and Joseph E. Floren; of counsel Karen A. Pieslak Pohlmann; and associates Kimberly Alexander Kane. Matthew S. Weiler and Jennifer R. Bagosy, according to the court filing.
Rains declined to comment. Lobdell is out of the country and couldn’t immediately be reached. Amy Merriweather, a spokeswoman for Morrison & Foerster, didn’t immediately respond to an e-mail seeking comment.
Morgan Lewis, along with Slaughter and May, advised Autonomy on the original acquisition by Hewlett-Packard. Hewlett-Packard’s legal advisers on the deal included DLA Piper LLP; Freshfields Bruckhaus Deringer LLP; Gibson, Dunn & Crutcher LLP and Skadden, Arps, Slate, Meagher & Flom LLP.
The securities class action case is In Re HP Securities Litigation, 12-cv-5980, and the derivative case is Riccardi v. Lynch, 12-cv-06003, U.S. District Court, Northern District of California (San Francisco).
Virginia Lawyer Gets 15 Years for Small Business Loan Fraud
A Virginia lawyer was sentenced to 15 years and eight months in prison for his role in a scheme that resulted in more than $100 million in losses on loans backed by the U.S. Small Business Administration.
Joon Park, 43, of Falls Church, was sentenced today in federal court in Baltimore. He admitted that from 2003 to October 2011, he and his co-conspirators submitted SBA loan applications with fraudulent documents including counterfeit cashier’s checks and falsified bank statements and tax returns, U.S. Attorney Rod Rosenstein of Maryland said in a statement.
The phony paperwork was used to persuade SBA officials to approve loans under a program that requires business owners to invest specified amounts of their own money. Taxpayers, through the SBA, guaranteed 75 percent to 90 percent of each loan, with lenders on the hook for the rest, according to Rosenstein.
“When borrowers and brokers submit false information and fraudulent documents, the underwriting process is defeated and the taxpayers bear the loss,” Rosenstein said.
Park was the leader of the conspiracy, along with his brother, according to the statement. The scheme operated through Park’s brokerage, Jade Capital & Investments LLC of Woodbridge, Virginia. His brother, Loren Park, is still at large and believed to be in South Korea, according to Marcia Murphy, a spokeswoman for Rosenstein.
Park arranged for 124 fraudulent loans with 17 commercial lenders ranging from $100,000 to $14.5 million, according to a superseding indictment returned March 7 by a federal grand jury.
Four other participants in the scheme have already been sentenced to prison and a fifth conspirator has pleaded guilty and is awaiting sentencing.
The case is U.S. v. Park, 11-cr-00600, U.S. District Court, District of Maryland (Baltimore).
U.S. Law Grads Finding More Jobs at Big Firms, Study Finds
More U.S. law school graduates are finding jobs at large firms even as legal hiring remains well below pre-recession highs, the National Association for Law Placement said in a report.
The number of jobs taken at firms with more than 500 lawyers rose 27 percent for the class of 2012 from the previous year, according to the study. The number of jobs, more than 3,600, is still less than the more than 5,000 jobs filled in 2009. Offers from the smallest firms, those with less than 10 lawyers, remained unchanged as percentage of total hiring, according to the study.
“The jobs picture is improving, if only slightly,” NALP Executive Director James Leipold said in a statement. “This class found more jobs — and more jobs in private practice — than the previous class, but because the national graduating class was so much bigger, the overall employment rate continued to fall.”
Employment for graduates fell to 84.7 percent from 85.6 the previous year, the fifth year in a row it has declined since 2008, according to the study. The employment rate is the lowest since 1994, NALP said. The employment rate has fallen more than seven percentage points since reaching a 24-year high of 91.9 percent in 2007, according to the report.
The national median salary for the new law firm hires rose to $90,000 from $85,000 the previous year. Salaries of about $160,000 accounted for 29 percent of law firm pay, according to the report.
White & Case Adds Julian Chung a Partner in Hong Kong
Julian Chung, formerly a partner at Ropes & Gray LLP, joins White & Case LLP in Hong Kong as a partner.
He has spent 26 years advising on public M&A and equity capital markets transactions, the firm said. He handles both state and privately owned companies in China and other parts of Asia, as well as the listings of international companies in Hong Kong. He has experience in the mining and commodities sectors.
Among Chung’s representations, he advised on Vale SA’s listing of its common shares and class A preferred shares in the form of depositary receipts on the Hong Kong Stock Exchange. He also advised on the reverse takeover of China Daye Non-Ferrous Metals Mining Ltd. through the injection of copper assets with a total value of about $900 million, the firm said.
White & Case has lawyers in 39 offices across 27 countries.
Apple Denies Fixing E-Book Prices in Antitrust Trial Closing
Apple Inc. (AAPL) got one last chance to defend itself from U.S. charges it led publishers in a scheme to fix the prices for electronic books, as a lawyer for the company told a judge that it did nothing wrong.
“Apple did not conspire with a single publisher to fix prices in the e-books industry,” Orin Snyder, Apple’s lawyer and a partner at Gibson Dunn & Crutcher LLP, told U.S. District Judge Denise Cote in his closing argument at the end of a civil antitrust trial in Manhattan. “Apple acted lawfully and did not violate the antitrust laws.”
The government claims Apple and five of the biggest book publishers conspired to move the e-books market to a model that raised prices and harmed consumers. The trial focused on December 2009 and January 2010, when Apple was racing to sign contracts with the publishers and build an iBookstore in time for the introduction of the iPad.
Snyder, in his 2 1/2-hour argument, told Cote that Apple’s entry into the e-books market, which had been dominated by Amazon.com Inc. (AMZN), lowered prices overall and helped consumers by bringing innovation and competition.
Cote, who will decide the case without a jury, interrupted Snyder repeatedly with questions. In a court conference before the trial, Cote told lawyers for both sides her “tentative view” was that the government has evidence that Apple “knowingly participated in and facilitated a conspiracy to raise prices of e-books.”
Mark Ryan, a lawyer for the Justice Department, followed Snyder yesterday, arguing that Apple headed up “an old-fashioned, straightforward price-fixing agreement.”
Ryan said Apple took advantage of the publishers’ dislike of Amazon’s practice of selling new e-books for $9.99, less than their cost, offering a scheme that would fix their “Amazon problem” by forcing the Seattle-based online retailer to switch to agency pricing.
Apple is the last defendant remaining in the case after the five publishers sued by the government avoided trial by settling.
The settling publishers are Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit, CBS Corp. (CBS)’s Simon & Schuster, Lagardere SCA (MMB)’s Hachette Book Group, Pearson Plc (PSON)’s Penguin unit and News Corp.’s HarperCollins. The No. 1 publisher, Random House Inc., isn’t involved in the U.S. suit.
The case is U.S. v. Apple Inc., 12-cv-02826, U.S. District Court, Southern District of New York (Manhattan).
Arbitration Backed as High Court Rules for American Express
The U.S. Supreme Court reinforced companies’ power to funnel legal disputes into arbitration, ruling in favor of American Express Co. (AXP) in an antitrust clash with retailers over the credit cards they must accept.
The 5-3 ruling is a victory for American Express in its bid to hold merchants to agreements they signed promising to pursue any disputes individually before an arbitrator. A federal appeals court had refused to enforce the arbitration accord, saying its bar on class actions would make it infeasible for the merchants to press their claims.
Michael Kellogg, a lawyer at Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC, representing American Express, delivered the oral argument in February. Paul Clement, a lawyer at Bancroft Pllc, delivered the oral argument for the retailers.
Writing for the majority, Justice Antonin Scalia said courts can’t invalidate a class-action waiver on the grounds that individual arbitration would be too expensive to pursue.
“Such a preliminary litigating hurdle would undoubtedly destroy the prospect of speedy resolution that arbitration in general and bilateral arbitration in particular was meant to secure,” Scalia wrote.
In dissent, Justice Elena Kagan said the ruling risked turning arbitration into “a mechanism easily made to block the vindication of meritorious federal claims and insulate wrongdoers from liability.”
Justices Ruth Bader Ginsburg and Stephen Breyer joined Kagan in dissent. Justice Sonia Sotomayor, who was involved with the case as an appellate judge, didn’t take part in the Supreme Court’s decision.
The case is American Express v. Italian Colors Restaurant, 12-133, U.S. Supreme Court (Washington).
Lanny Breuer Was ‘Disaster’ at Justice Department, Spitzer Says
Eliot Spitzer, New York’s former governor and attorney general, talks with Bloomberg Law’s Lee Pacchia about the so-called revolving door between the public and private spheres. While he doesn’t think the entire concept requires regulatory change, he says particular examples have shown an enormous problem of individuals improperly internalizing defenses of the private sector when they go to work for the government.
Spitzer says the question is more about a person’s capacity to change with their given roles.
“Can people separate, emotionally and intellectually, one job from the past job,” he says. “That’s a very hard thing to do.”
Bill on Bankruptcy: Lawyers Must Disclose Clients Pay
Lawyers may object to disclosing how much they actually collect per hour from non-bankrupt clients, as Bloomberg Law’s Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle explain on their video discussing new fee guidelines promulgated by the U.S. Trustee Program.
The Bankruptcy Judge of the Week is Kathy A. Surratt-States from St. Louis whose efforts at resuscitating Patriot Coal Corp. may be undone by the United Mine Workers union. Rochelle describes the new Chapter 11 filings for Exide Technologies, National Envelope, and Orchard Supply Hardware Stores Corp., commenting on which will survive and which might not.
The video ends with discussion of a case to be argued late this year in the U.S. Supreme Court and a decision from the Court of Appeals in Atlanta casting doubt on the ability of creditors to negotiate collectively with a troubled company in advance of bankruptcy.
This is a Bloomberg podcast. To download, watch or listen to this report, click here.
To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, firstname.lastname@example.org.
To contact the editor responsible for this story: Michael Hytha at email@example.com.