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Private Equity
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October 26, 2012
PE Firms' $1.6B Argentina Bond Win Backed By 2nd Circ.
The Second Circuit on Friday ruled that Argentina must repay approximately $1.4 billion to private equity firms and other investors that opted out of restructuring deals on the country's debt following its 2001 default.
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October 24, 2012
Sun Capital Ditches Pension Fund's $4.5M Claims
A Massachusetts federal judge has ruled that private fund firm Sun Capital Partners was not obligated to pay roughly $4.5 million in withdrawal liability to a New England trucking industry pension fund group on behalf of a former portfolio company that went bankrupt.
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October 22, 2012
Solyndra Gets Green Light For Ch. 11 Plan Over US Objection
A Delaware bankruptcy judge on Monday gave her blessing to Solyndra LLC's reorganization plan, casting aside the U.S. government's protest that the plan's central goal was to secure valuable tax breaks for the defunct solar company's private equity investors.
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October 19, 2012
Funds' Early Bond Call-Up Didn't Break Antitrust Law: 11th Circ.
An evenly divided en banc Eleventh Circuit on Friday upheld a ruling that found 21 hedge funds didn't break antitrust laws by allegedly conspiring to force CompuCredit Holdings Corp. to redeem the credit provider's bonds ahead of schedule.
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October 17, 2012
Solyndra Battles IRS In Court Over Ch. 11 Plan
Defunct solar energy company Solyndra LLC squared off with the U.S. government Wednesday in Delaware bankruptcy court, arguing that its reorganization plan makes the best of a bad situation for its private equity creditors and is not, as the government claims, a ploy to secure valuable tax breaks.
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October 16, 2012
NY Appeals Court Tosses Vitro's Suit Against Creditors
A New York state appeals court on Tuesday affirmed the dismissal of Vitro SAB de CV's suit accusing Aurelius Capital Management LP and other bondholders, who hold $1.2 billion of Vitro's debt, of breach of contract by divulging confidential information on the eve of the bankrupt Mexican glassmaker's restructuring.
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October 16, 2012
Emails Aren’t Quite Smoking Gun In PE Buyout Antitrust Row
The lawsuit unsealed last week accusing KKR & Co. LP, The Blackstone Group LP and other private equity firms of conspiring to keep prices low on dozens of high-profile buyouts included chummy emails between executives, but attorneys say the case may still face an uphill battle as the firms can argue that any joint bidding didn't violate antitrust law.
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October 12, 2012
Mason Gets Go-Ahead To Hold Telus Investor Summit
A Canadian appeals court on Friday overturned a lower court's ruling that New York hedge fund Mason Capital Management LLC could not convene a meeting with Telus Corp. shareholders to mount opposition to the company's plan to wipe its dual-share structure.
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October 11, 2012
Carlyle Keeps $10M MBS Fund Fight With Kuwait Co. In Del.
A Delaware state judge on Thursday declined to vacate a default judgment against Kuwait-based conglomerate National Industries Group (Holdings) in a dispute over a failed $10-million Carlyle Investment Management LLC-related closed-end investment fund for mortgage-backed securities, holding the companies to the forum selection clause in their contract.
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October 11, 2012
KKR, Blackstone, Others Used Email In LBO Collusion: Suit
High-ranking executives at private equity firms including KKR & Co., Blackstone Group LP and the Carlyle Group LP colluded through email exchanges to avoid bid wars in more than a dozen billion-dollar leveraged buyouts, according to a federal complaint unsealed Wednesday.
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October 9, 2012
Mervyn's Creditors Land $166M Deal In PE Buyout Suit
Creditors of Mervyn’s LLC scored a $166 million settlement in litigation over a 2004 leveraged buyout where several private equity firms allegedly leeched valuable real estate assets out of the department store chain, according to documents filed Friday in Delaware bankruptcy court.
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October 4, 2012
Contec Gets Nod For Ch. 11 Plan That Cuts Debt By 85%
Contec Holdings Ltd., a broadband equipment repair company controlled by Bain Capital Partners LLC, received a Delaware bankruptcy judge’s blessing Thursday for a reorganization plan that will slash its $350 million of long-term debt by 85 percent.
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October 2, 2012
Playboy, Hefner To Spend $5.25M To Settle Investors' Suit
Playboy Enterprises Inc., founder Hugh Hefner and a private equity firm minted a $5.25 million class action settlement on Monday with minority shareholders who claimed they got the shaft when the pop culture icon took the company private in a $206 million buyout in 2011.
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September 21, 2012
Wind Turbine Co. May Dodge First Wind's $60M Attachment Bid
Private equity-owned Clipper Windpower LLC doesn't have to tie up $60 million over First Wind Energy LLC's concerns it will collapse before a contract arbitration wraps up — as long as the floundering turbine company hands over its financial statements, a New York state judge ruled Friday.
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September 19, 2012
WL Ross Gets OK To Buy Lehman's $110M Stake In Navigator
A New York bankruptcy judge on Wednesday approved the $110.2 million sale of Lehman Brothers Inc.'s stock in propane transporter Navigator Holdings Ltd. to investment tycoon Wilbur Ross Jr.'s WL Ross & Co. after no higher bids were submitted.
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September 18, 2012
Ex-Soros Trader Awarded $4.6M In Spinoff Fund Fight
A Delaware Chancery Court judge on Monday said a hedge fund that spun off from Soros Fund Management must give a former limited partner the $4.6 million from his capital account that it withheld following a contract dispute when he left the firm.
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September 18, 2012
SEC Fines Chicago Broker $1M For Misleading Energy Offerings
A Chicago broker-dealer will pay a $1 million fine and its founders will be penalized tens of thousands of dollars apiece to settle allegations that investors were misled during private equity offerings on behalf of a California alternative energy firm, the U.S. Securities and Exchange Commission said Tuesday.
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September 14, 2012
Bain, Others Must Show Harm To Shield Docs In Antitrust Case
A Massachusetts federal judge on Friday told Bain Capital Partners LLC, Goldman Sachs Group Inc. and other private equity firms they had to provide better reasons to keep confidential details in an antitrust suit over alleged price-fixing of leveraged buyouts from going public.
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September 14, 2012
2nd Circ. Revives $2M Delphi Bankruptcy Claim Suit
The Second Circuit on Friday reversed the dismissal of a hedge fund firm's lawsuit seeking payment of interest on a $2 million claim it had bought from a Delphi Automotive Systems Corp. creditor, saying an unresolved objection to the claim triggered a contractual repayment obligation.
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September 12, 2012
Mason Vows To Fight Ruling Barring Telus Shareholder Powwow
New York hedge fund Mason Capital Management LLC on Wednesday vowed to appeal a Canadian court's decision blocking it from holding a Telus Corp. shareholder meeting that would butt against the telecom company's plans for a meeting of its own.
Expert Analysis
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The JOBS Act: Important Questions For Private Funds
Private investment advisers that avail themselves of the opportunity to conduct radio or television interviews in connection with a general solicitation should be careful to ensure that such communications do not run afoul of existing advertising rules or the new standardized requirements under the JOBS Act. A number of unresolved questions remain surrounding 506(c) general solicitations by private funds, say attorneys with Skadden Arps Slate Meagher & Flom LLP.
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Political Intelligence: The Next Regulatory Frontier?
While much attention has been paid in recent cases to the interaction between private investment funds and third-party consultants provided through so-called "expert networks," the U.S. Securities and Exchange Commission and Congress appear poised to turn their attention to the activities of "political intelligence firms." Private investment funds, among others, would be well-served to understand the heightened regulatory environment, say Jeff Lehtman and Jason Abel of Allen & Overy LLP.
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How PE Firms Can Avoid Getting Blindsided By The FCPA
The U.S. Department of Justice and the U.S. Securities and Exchange Commission are now training their attention on how private equity firms exert oversight and control over their portfolios, with a particular emphasis on Foreign Corrupt Practices Act issues. PE firms should consider compliance strategies that reflect the specific anti-corruption risks of each part of the deal's life cycle, say attorneys with Pillsbury Winthrop Shaw Pittman LLP.
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6 Areas Often Underestimated In Law Firm Mergers
While mergers in other industries are driven by cost efficiencies or economies of scale, law firm mergers are typically focused on the potential to leverage clients and the overall quality of the attorney population, branding and market position. As a result, full disclosure of third-party vendor or support function operating costs can be a secondary concern until after the deal closes. Firms need to hit the ground running the moment the merger is inked, says Matthew Sunderman of HBR Consulting LLC.
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5 Shapers Of Private Equity In 2013
Although economic uncertainty, particularly the debt ceiling resolution in the U.S., may continue to negatively affect overall M&A activity, we view the outlook for private equity investing as more positive because of, among other things, continued confidence in credit availability and the reported trillion-dollar level of PE purchasing power worldwide, say attorneys with Skadden Arps Slate Meagher & Flom LLP.
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Ch. 15 — Still Coming Of Age
Contrary to the view that Chapter 15 can provide a method for a foreign entity to obtain a U.S. “rubber stamp” on foreign insolvency rulings, recent decisions from the Fifth Circuit, the U.S. Bankruptcy Court for the District of Delaware and the U.S. Bankruptcy Court for the Southern District of New York mark a stage in the development of Chapter 15 jurisprudence that is complex and nuanced, say attorneys with WilmerHale LLP.
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Dialysis Industry Continues To See Robust PE Activity
Of the largest dialysis companies in the U.S. at any given time, roughly half of such companies are private equity-backed. With the industry’s seemingly endless consolidation and resulting Federal Trade Commission-mandated divestiture cycle, new opportunities for private equity investors continue to arise, say Amber McGraw Walsh and Geoffrey Cockrell of McGuireWoods LLP.
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PE Fund Considerations In Light Of Del.’s LLC Debate
Partners of private equity funds and other investment partnerships should take notice of recent Delaware court decisions that have created some uncertainty over whether Delaware Limited Liability Company managers owe “default” fiduciary duties. This uncertainty highlights the often ignored need for private equity funds to specify the scope of fiduciary duties for holding companies of portfolio investments, say attorneys with Pepper Hamilton LLP.
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How Tweaking The UK Takeover Code Affects Private Equity
The U.K. Takeover Panel will likely implement changes to the City Code on Takeovers and Mergers in early 2013, resulting in a number of notable impacts — particularly for private equity deals, say Guy Lewin-Smith and Katherine Elizabeth Murray of Debevoise & Plimpton LLP.
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The Rationale Behind Del.'s 'Pink Slime' Ruling
Not an uncommon scenario in a bankruptcy court: an employer, owned by a private equity firm, terminates a large number of employees during an overall reduction in operations. The Delaware Bankruptcy Court decision in Sanchez v. AFA Foods — aka, the "pink slime" case — makes clear that plaintiffs must allege real and substantial facts to maintain a claim upon which relief can be based for a violation of the WARN Act, says Morgan Seward of Young Conaway Stargatt & Taylor LLP.