Kaye Scholer Reflects on Memorable 2011
A time of challenges faced, opportunities seized, and optimism increasing
New York — US legal policies underwent several dramatic changes in 2011 and several key matters on which Kaye Scholer advised led the way in helping to set new precedent or prompt significant debate on everything from hormone therapy to whether sports equipment manufacturers can be held liable if professional athletes are injured during the normal course of athletic play.
“While Kaye Scholer continues to be engaged in some of the most important product liability, IP litigation, and life sciences matters, our transactional practices also saw an uptick in work after a few sluggish years,” said Kaye Scholer Managing Partner Mike Solow. “Our Private Equity group advised on approximately 25 transactions with a combined deal value in excess of $10 billion, while our Investment Funds practice was named #2 in the industry by Hedge Funds Review. And our real estate, finance and bankruptcy teams continued to advise on complex distressed assets and restructuring transactions. Despite a still uncertain global economy, we approach 2012 with great optimism and look forward to continuing to partner with our clients to help ensure they maintain their competitive edge.”
Below is a quick summary of some of the more compelling matters Kaye Scholer attorneys advised on in 2011:
Litigation and Dispute Resolution
- March: Obtained a complete victory for CLS Bank in a business method and system patent litigation. CLS Bank had been accused of infringing four U.S. patents based on its use of methods and systems that settle most of the world’s foreign exchange transactions, with an average daily value of about $4 trillion. The DC District Court ruled in CLS’s favor, finding that all of the asserted patent claims were invalid, including claims to computerized systems that implement the underlying business methods, and computer products employing software to carry out the methods. This case is significant because it addresses numerous questions left unresolved by the US Supreme Court’s decision in Bilski v. Kappos and subsequent Federal Circuit cases, including the patentability of abstract ideas involving business and financial concepts implemented on a computer. Lead partners: William Tanenbaum and Steven Glassman (Technology Litigation).
- June: Represented GSC Group in its heavily-litigated chapter 11 case in the Southern District of New York. GSC was an investment manager that managed a diverse portfolio of private equity, mezzanine loan, and distressed funds and CLO/CDOs in the US and Europe. GSC held a four-day auction to try to sell off nearly all of its $28 billion assets. The sale was strongly opposed by a group of dissenting lenders, but following the appointment of a trustee to confirm that the transaction was proposed in good faith, was approved under section 363 of the Bankruptcy Code. In the course of the engagement, Kaye Scholer was called on to develop a novel solicitation process to address investors’ consent rights under non-bankruptcy law. Lead partner: Mike Solow and Tyler Nurnberg (Bankruptcy & Restructuring Department).
- June: The firm worked closely with in-house counsel at AstraZeneca to develop and implement a successful national defense strategy pertaining to the antipsychotic drug, Seroquel, which was alleged to cause diabetes and related injuries. By mid 2011, nearly all of its remaining US product liability claims were resolved. Lead partner: Arthur Brown (Product Liability).
- July: Scored runs in defense of sports equipment manufacturer Rawlings in two lawsuits arising from professional baseball. One case, involving a professional player who suffered a head injury after being struck by a pitch, was resolved without any finding of liability. The other matter was brought by a spectator at a New York Mets game when he was hit by a broken bat that flew into the stands. That case was dismissed without prejudice. Lead partner: James Herschlein (Commercial Litigation).
- August: In Pfizer v. Teva Pharmaceuticals, Kaye Scholer successfully preserved Pfizer’s market exclusivity for its blockbuster drug Viagra® until 2019, defeating Teva’s attempt to bring a generic version of Viagra® to market in March 2012. Lead partners: Dan DiNapoli and Aaron Stiefel (Life Sciences).
- October: Secured a trial victory for client Pier 1 Imports, Inc. in a patent-infringement suit brought by Alexsam, Inc. concerning Pier 1's gift card system. The case was tried in the Eastern District of Texas, Marshall Division. The jury returned a verdict in favor of Pier 1, finding that it did not infringe Alexsam's patents and denying the plaintiff's request for $26 million in damages. This victory was partner Alan Fisch’s second jury trial win on behalf of a defendant in Marshall. Lead partner: Alan Fisch (IP Litigation).
- December: Served as National Counsel to client Knauf Plasterboard Tianjin(KPT) In re: Chinese-Manufactured Drywall Products Liability Litigation. We developed and negotiated a landmark global class action settlement involving thousands of homes that were installed with KPT drywall, requiring remediation of the affected properties. The innovative settlement benefited KPT by allowing it to repair the affected homes rather than having to pay monetary damages, assuring the most cost-effective solution. The settlement generated more than 500 media stories around the US. When officially approved by U.S. District Judge Eldon E. Fallon, the settlement will effectively end the ongoing litigation and class-action lawsuits. Lead partners: Steven Glickstein, Jay Mayesh (Product Liability) and Gregory Wallance (White-Collar Litigation & Investigations).
- February: Represented a foreign pension fund in connection with the acquisition of a $325 million preferred equity interest in the owners of Rockefeller Center. Lead partners: Stephen Gliatta and Louis Hait (Real Estate).
- May: Represented Emergency Medical Service Corporation and Onex Corp.in the $3.2 billion sale of EMSC to private equity firm, Clayton, Dubilier & Rice, LLC. EMSC, acquired by Onex Corp. and its affiliates in 2004, is a leading provider of emergency medical services in the US. This was just one of the matters on which the firm advised Canada’s Onex Corp. in 2011. Lead partner: Joel Greenberg (M&A).
- June: Represented UBS as a lender, and as agent for a lender syndicate, in a $775 million restructuring of a revolving commercial aircraft securitization facility for AerCap, a leading aircraft lessor. Kaye Scholer also represented the same party as a lender, and as agent for a lender syndicate, in the original 2006 $1 billion facility. Lead partners: Henry Morriello (Structured Finance) and Kurt Skonberg (Structured Finance).
- July: Advised Safran in its $1.09 billion acquisition of L-1 Identity Solutions, Inc. L-1 provides technology, products, systems and solutions, and services that protect and secure personal identities and assets. As a result of the transaction, Safran has become the world leader in biometric identity solutions. Lead Partners: Farhad Jalinous and Christopher Griner (CFIUS).
- November: Advised Caisse de dépôt et placement du Québec (CDPQ) in an agreement with ConocoPhillips to purchase its 16.55% interest in Colonial Pipeline Company and Colonial Ventures LLC for $850 million. Colonial Pipeline is the largest refined petroleum products pipeline in the United States, extending between the Gulf of Mexico and the Northeastern US and transporting 2.3 million barrels per day. CDPQ, one of Canada’s leading institutional fund managers, manages funds primarily for public and private pension and insurance plans. Lead Partners Jeff Scheine (Tax), Steven Canner (Corporate).
- December: In one of four 2011 transactions for American Securities, advised the client on its acquisition, in partnership with company management, of Global Tel*Link Corporation, which had been majority-owned by Veritas Capital. Lead partners: Mel Cherney (Private Equity) and Sheryl Gittlitz(Syndicated & Leveraged Finance).