An Interdisciplinary Approach to Complex Transactions

We represented Power Financial Corporation’s subsidiary Great-West Lifeco Inc., a financial services holding company, in its $3.9 billion acquisition of Putnam Investments from Marsh & McLennan Cos. A team of lawyers from our corporate and securities, financial services, white collar and securities litigation, tax, employee benefits, and IP groups in our U.S and European offices worked with our client to structure this transaction. We utilized our knowledge of the varied financial services' products, the market, and related regulatory risks to analyze the value of this acquisition for our client while also advising the company on several significant outstanding legal issues. Our understanding of purchase price mechanisms, consent issues, indemnity, and other deal provisions specific to the industry helped our client obtain its desired result. As is often the case in investment management M&A deals, negotiations with management were also an important part of the process.

Sophisticated Approach to Non-Traditional Offerings

We represented Interactive Brokers Group, Inc., an automated global electronic market maker and broker, in its high profile and complex $1.2 billion initial public offering. Rather than opting for the more traditional firm commitment underwriting, the company conducted the IPO through a non-traditional "best efforts"/Dutch auction approach, making the offering the second largest Dutch auction IPO at the time of issuance. In addition to our IPO advice, we also provided sophisticated and creative tax and employee benefits advice so that the company could, post-IPO, replicate as closely as possible its historical limited liability structure. We also addressed significant broker-deal and securities law issues resulting from the fact that the company was a participating dealer in its own IPO. Lastly, we structured the deal under particularly intense time pressure because the offering more than doubled in size through two separate increases during the week prior to the IPO as a result of a confluence of factors, including a strong market, the increasing visibility of the options trading business, and the reputation and strong financial results of the company.

60 Days, 700 Properties

Dechert represented Arbor Realty Trust, a leading national REIT, and the Lightstone Group, LLC, one of the largest private real estate owners in the country, in their $8 billion acquisition of Extended Stay Hotels from the Blackstone Group. An interdisciplinary team of lawyers from the WCSL, C&S, FRE, Tax, and Environmental groups worked on this complex deal, which involved the negotiation and purchase of roughly 700 properties during a condensed time period of 60 days.

One Transaction; Six Continents; 30 Countries

When a strategic review prompted the majority shareholders in Travelex, the world’s largest non-bank foreign exchange specialist, to sell a majority stake in the £1 billion company, Dechert lawyers in London, continental Europe and the US were called in to advise on the transaction. We had previously represented the company in its £440 million acquisition of Thomas Cook International. In selling their stake via a leveraged buyout, Travelex and its partners relied on Dechert for all aspects of the deal, from the main transactional elements to regulatory, tax, employment, real estate, IT and financing issues relevant to their operations on six continents.

Representing Leading Investment Banks

We represented Lehman Brothers, Merrill Lynch, and Wachovia in one of the largest first-lien, second-lien “covenant light” notes transactions to date. Spanish Broadcasting System, Inc., the largest Hispanic-controlled radio broadcast company in the United States, received $450 million to repay outstanding credit facility indebtedness and redeem all of the company's existing $335 million principal amount of 9 5/8% senior subordinated notes.

Resolving Complex Shareholder Issues

When a series of complex shareholder issues threatened its future, Arrow International, Inc., a leading medical device manufacturer, turned to Dechert for advice on weighing its options. Initially, we advised Arrow and its Board of Directors in response to a shareholder proposal that would remove Arrow's founders from the board by setting member age limits. This measure was proposed by the Robert L. McNeil Trust, a major shareholder which later announced that it would launch a proxy contest for control of the company. An interdisciplinary team from Dechert's corporate and securities, litigation, employee benefits and executive compensation, intellectual property, antitrust, tax, environmental, and both employment groups worked cohesively with Arrow and its Board of Directors both to review the company's alternatives and craft the response to the Trust. Our work ultimately led to the $2 billion (all cash) sale of Arrow to Teleflex, Inc.

Working Across Borders and Practices

We represented Crown Holdings, Inc. in its $2.4 billion refinancing, which included novel collateral sharing and inter-company arrangements to accommodate the complex international nature of Crown's assets. The refinancing reduced interest expense, improved cash flow and liquidity and extended the maturity of Crown's debt. Equally important, it provided the company a stable capital structure with an appropriate amount of pre-payable debt. The transaction was handled by an international and interdisciplinary Dechert team from our Philadelphia, London, Paris, and Brussels offices.

Restoring Reputations

The U.S. government and private insurance companies are the ultimate payors for most pharmaceutical products. They charged a global pharmaceutical company with inflating the average wholesale prices (AWP) of its products. As National Coordinating Counsel for the client, we led negotiations that culminated in a significant civil settlement with the U.S. Department of Justice concerning Medicare and the Medicaid False Claims Act; settlements of consumer fraud class action claims; settlements with 41 state attorneys general, and recognition of the client by the court for its "leadership" in fashioning a fair and comprehensive settlement of the complex AWP litigation.

Antitrust Defense for Whole Foods Market

The Federal Trade Commission was trying to block the $565 million acquisition of Wild Oats Markets, Inc. by Whole Foods Market, Inc. Dechert was retained by Whole Foods Market more than a week after the FTC's complaint was filed challenging the transaction and only six weeks before the scheduled hearing date on the FTC's motion to enjoin the deal. The Dechert team devised a winning strategy and executed on that strategy throughout the expedited discovery process, which culminated in a two-day hearing before Judge Paul L. Friedman in the U.S. District Court for the District of Columbia. In that short period, there were four expert reports, five rebuttal expert reports, five expert witness depositions, 19 fact witness depositions, and 16 fact witness declarations. Judge Friedman issued a 93-page opinion denying the FTC’s motion for a preliminary injunction blocking the merger. The FTC sought an injunction pending appeal, first from the District Court and then the U.S. Court of Appeals for the District of Columbia Circuit, both of which were denied, allowing Whole Foods Market and Wild Oats to complete their merger.

Defending GlaxoSmithKline at the Intersection of IP and Antitrust

GlaxoSmithKline was under investigation by the Federal Trade Commission for allegedly using its patent portfolio relating to Paxil, an anti-depressant medication, to keep generics off the market. Dechert’s presentations to the FTC helped to convince the Commission to close its investigation without any government action against GSK. As is common in these cases, when news of the FTC investigation leaked to the press, a class of indirect purchasers filed an antitrust action. Additional class actions on behalf of direct purchasers followed, as did counterclaims in the patent infringement actions. We led the defense of GlaxoSmithKline in these matters. The contentious discovery and motion practice stretched over many years. As a result of a combination of factors, including our favorable resolution of the FTC investigation, our vigorous class certification defense, and the way in which we were able to use developments in the underlying patent cases to highlight the weaknesses in the plaintiffs’ antitrust cases, we engineered favorable settlements in the class actions. We continue to litigate counterclaims filed by alleged infringers and the City of New York, as well as opt-out antitrust claims.

Defending NYSE's CEO in Historic Merger Litigation

Despite the numerous strategic advantages of the proposed merger of the NYSE and Archipelago, a minority of seat-holders in the NYSE objected to the merger, claiming that its terms were unfair and that it was tainted by conflicts of interest. We defended the interests of the CEO of the NYSE and helped to broker a settlement that allowed the merger to go through. 

Defending Wyeth in Fen-Phen Diet Drug Trials

In 2005, Dechert obtained a significant defense jury verdict in Vega v. Wyeth, a consolidated trial of claims brought by four plaintiffs who alleged that fen-phen had caused them heart damage. Tried to a jury in the often pro-plaintiff jurisdiction of Philadelphia County, we secured a defense verdict against all four plaintiffs. 

This was a reverse-bifurcated trial in which Phase I focused on damages and Phase II focused on liability. In Phase I of the trial, we persuaded the jury that two of the plaintiffs had not suffered compensable injuries, but the same jury assessed damages of $5.5 million for the other two plaintiffs. Then, in an unprecedented Phase II win, the jury found unanimously in favor of Wyeth. The Phase II victory was significant because it was the first of its kind, and the legal press described it as “a huge victory for Wyeth.” 

Setting Precedent in Securities Litigation

Dechert successfully defended Bank of America and certain of its affiliates in a revenue-sharing case brought by four shareholders in its Columbia mutual funds. The complaint was filed in the United States District Court for the District of Massachusetts. Plaintiffs alleged generally that the defendants improperly engaged in revenue sharing, i.e., that the defendants caused mutual fund assets to be paid to brokerages in return for agreements by the brokerages to sell Columbia funds. The judge granted our motion to dismiss all eight counts of plaintiffs' complaint with prejudice. The decision is one of only a few cases to dismiss a complaint like this in its entirety, and it will serve as precedent in the many revenue-sharing cases that are pending around the country. 

Successful Defense of Merck in Vioxx Trials

Dechert has earned two major victories on behalf of Merck in the legal battle over Vioxx.  In 2005, we convinced a New Jersey jury to find that the pain reliever did not cause an Idaho man’s heart attack.  his marked the first defense verdict for Merck in the Vioxx litigation. It was featured as one of The National Law Journal's "Top Defense Wins of 2005,“ and was "a victory worth noting" according to InsideCounsel, which named it one of the "five verdicts of 2005 that are reshaping corporate defense strategies." Although the judge later ordered the case to be retried on the plaintiff's motion, it represented the first defense verdict for Merck in the Vioxx litigation.
 
Even more recently, in 2006, we persuaded another New Jersey jury to reject claims brought by a 68-year-old woman who suffered a heart attack after taking Vioxx for more than two years. Our trial team demonstrated that Merck did not violate New Jersey’s consumer fraud law and met the standards of honesty and good faith in its marketing of Vioxx. This compelling win for Merck was the first defense verdict in a long-term use case, and the first in which jurors had to decide whether Merck failed to warn a patient, as opposed to physicians, about the risks of its product. And in 2007, the Dechert trial team again convinced a jury to reject personal injury damages.
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White Collar Defense for Rite-Aid's Key Executive

We represented the former president and chief operating officer of Rite Aid in connection with government investigations and civil litigation stemming from a $1.6 billion restatement of earnings by Rite Aid. The government’s case against Rite Aid was one of the largest securities fraud prosecutions ever brought. We were able to negotiate an agreement with the government to recommend a sentence of probation. Our client was the only one of the seven Rite Aid defendants not sentenced to prison.
 

90 Trades in 40 Days

In one of the largest real estate financings ever, Dechert represented 70 mezzanine investors in the $39 billion acquisition of Equity Office Properties by Blackstone. This acquisition resulted in the largest mezzanine loan transaction ever brought to the capital markets, with more than $11 billion dollars of subordinate debt. In a novel approach dictated by the sheer size of the deal, the mezzanine investors—including real estate funds, investment banks, insurance companies, and foreign banks—were required to select a single law firm to act as their "designated counsel" for the entire transaction. Selected for that role because of our acknowledged expertise in the subordinate debt market, we crafted a thorough approach that allowed us to close the more than 90 individual trades involved in just 40 days.

Financing the Transformation of the Plaza Hotel

We represented a major real estate investment fund that was one of the lenders for the initial $913 million mortgage and mezzanine financing related to the 2004 purchase of the landmark Plaza Hotel in New York City by a consortium of foreign investors. The storied hotel is being converted into a multi-use property with residential, retail, and hotel units. Dechert continued as an advisor after the initial closing, working with our clients to obtain repo and warehouse financing and to purchase additional capital stock until our client was the single largest debt holder in the deal. We also represented the client in connection with the 2006 refinancing and upsizing of the loan to more than $1billion, and are advising on repo financing for the new investment.

Maximizing Returns on Structured Finance Transactions

Our client, Wachovia, sought to minimize the credit risk associated with a large number of structured commercial real estate loans and participations on its balance sheet. We assisted in the offering of debt and equity structured as commercial real estate collateralized debt obligations (CRE-CDO). We provided structuring and tax advice in the issuance of notes and preferred equity, performed extensive due diligence on the underlying assets, and drafted the operative transaction documents over the course of a nine-month deal cycle. The result was the largest balance sheet CRE-CDO ever issued into the market.

Structuring Funds on a Global Scale

A global financial services provider instructed us to create two complex European fund structures and then asked us to take on a wide-ranging advisory role on both sides of the Atlantic. Our brief: to ensure that the company's products work seamlessly between the two continents. We now advise this client in relation to onshore regulated work in the United States and Europe as well as offshore hedge and non-hedge products.

Advising the Investment World

Doubling the size of an investment management firm’s assets under management takes careful legal guidance. Our client Aberdeen Asset Management PLC acquired certain Deutsche Asset Management Group Limited fund management businesses and related assets, and that acquisition increased the amount of assets it had under management from £26.6b to £72.9b. We advised on the U.S. regulatory aspects of this acquisition, and coordinated the development of uniform global compliance standards for international and domestic U.S. registered advisers.

Asserting Gateway's Rights in High-Profile Patent Litigation

A patent infringement case Dechert resolved on behalf of computer-maker Gateway epitomizes the type of cases we take on—fast-paced, high-profile, multi-jurisdictional. We represented Gateway against Hewlett-Packard in several of the country’s hottest patent litigation venues: two federal “rocket dockets” and the U.S. International Trade Commission, an increasingly favored tribunal for the rapid resolution of certain patent disputes. We won a slew of motions in federal court and a complete judgment in one of two ITC cases and then secured a favorable settlement for our client. This and other ongoing patent cases we are handling for Gateway allow for the creation of cross-office teams where attorneys from coast to coast share resources and have the opportunity to work with one another.

Protecting the Patents of a Medical Technology Leader

Boston Scientific is one of the country’s most recognizable medical technology companies. When it needs assistance in protecting its patents, it calls on Dechert’s IP group. We have represented Boston Scientific in numerous patent infringement cases across the country involving life-saving medical devices such as stents, catheters, and embolic protection devices. We currently represent Boston Scientific against a rival company in a dispute involving new embolic protection devices that allow surgeons to perform minimally invasive stenting procedures in blood vessels. Our work on behalf of Boston Scientific allows our team to interact closely both with doctors who are using state-of-the-art medical devices to treat their patients and with the research and design teams at Boston Scientific who were responsible for developing the intellectual property that brought those devices to market.

Enforcing Patent Rights on Three Continents

A licensing-and-litigation matter on behalf of UK computer maker Elonex plc is an example of one of the aspects of our IP practice that sets us apart from others: a focus on large-scale, truly global patent enforcement campaigns. This case encompassed 29 separate actions in the U.S., as well as a case in the Federal Supreme Court of Germany, arbitrations in Chicago and New York City, enforcement proceedings in Taiwan, defense of a UK Patent High Court action, competition proceedings in Brussels against Microsoft, various opposition proceedings in the Japanese and European Patent Offices, and ending in a trial in Delaware resulting in a $9 million damage award, which was affirmed by the Federal Circuit. At the same time, we carried out licensing negotiations with over 30 computer and monitor companies. The end result—aside from a lot of frequent flier miles—was over $100 million in licensing fees and damages for our client and invaluable cross-border experience for our team.