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Private Equity
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May 13, 2013
Sun Capital Escapes WARN Act Claims In Bankruptcy Court
A Delaware federal bankruptcy court on Friday cleared Sun Capital Partners Inc. of class claims that the private equity firm was liable for portfolio company Jevic Transportation Inc.'s alleged failure to properly notify workers of a layoff around the time of Jevic's bankruptcy.
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May 10, 2013
KKR Can't Dodge Investor Suit Over $525M Primedia Sale
Private equity firm KKR & Co. LP must face a class action alleging its $525 million sale of Primedia Inc. in 2011 was unfair to the publisher’s minority investors because it shielded KKR from a potentially valuable insider trading claim, a Delaware judge ruled on Friday.
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May 10, 2013
Ex-CEO's Suit Against North Pole, Warburg Sent To Arbitration
A federal judge in Missouri on Friday stayed a suit facing North Pole Ltd. and its parent company Warburg Pincus LLC and compelled them into arbitration with a former North Pole CEO who accused the companies of letting him take the fall for their debts, leaving him trapped in China.
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May 10, 2013
German Banker Drops Appeal Of Formula 1 Bribery Sentence
A German banker sentenced to eight-and-a-half years in prison for accepting a $44 million bribe in connection with private equity firm CVC Capital Partners Ltd.’s acquisition of a controlling interest in Formula One racing reportedly dropped his appeal of his sentence on Friday.
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May 3, 2013
Ex-Cowboys Player's PE Partner Gets 10 Years For $40M Fraud
A Texas federal judge on Friday sentenced the former owner of private equity firm Gemstar Capital Group Inc. to 10 years in jail and nearly $17 million in restitution for securities fraud stemming from an alleged $40 million Ponzi scheme he operated with a former Dallas Cowboys player.
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May 2, 2013
Maxim Didn't Botch Promissory Note Deal, 2nd Circ. Says
The Second Circuit on Thursday upheld a ruling that tossed a misrepresentation suit against investment bank Maxim Group LLC and private equity firm Aramid Entertainment Fund Ltd. over a botched deal for a promissory note, finding there was no binding agreement in place.
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May 1, 2013
Ex-CEO, Investment Firm Escape A&P Shareholder Suit
A New Jersey federal judge on Tuesday trimmed claims against a CEO and a private equity firm from a shareholders securities class action alleging top executives of bankrupt grocery store chain The Great Atlantic & Pacific Tea Co. Inc. failed to disclose A&P's financial woes.
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April 30, 2013
Bergstein Beats Aramid's $190M Suit In NY Appeals Court
Media-financing firm Aramid Entertainment Fund Ltd. failed Tuesday to persuade a New York state appeals court to reverse a lower court’s decision tossing its $190 million suit claiming Hollywood financier David Bergstein and others lied about Aramid to disrupt its planned $130 million asset sale to a private equity firm.
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April 29, 2013
Heinz Beats Investor Actions, Clears Path For Buyout Vote
A Pennsylvania judge on Monday dismissed seven putative class actions alleging H.J. Heinz Co.'s board failed to solicit other offers before accepting a $28 billion buyout from 3G Capital Partners Ltd. and Berkshire Hathaway Inc., clearing the way for a Tuesday vote to finalize the deal.
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April 26, 2013
PE Investor Must Arbitrate Poaching Claim Against Partner
A San Francisco private equity investor was ordered Friday to arbitrate claims accusing his partner at Blackford Capital Associates LLC of poaching the firms’ clients for his own similarly named side business.
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April 25, 2013
Willkie Farr Skirts Suit Over $100M Extended Stay Penalty
Willkie Farr & Gallagher LLP on Thursday won its bid to toss a malpractice suit claiming that it exposed the former private equity owner of Extended Stay Inc. to a $100 million liability stemming from the hotel chain's bankruptcy.
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April 25, 2013
Claims Against Wilson Sonsini Fail To Salvage Dot Com Suit
A federal judge in Washington state again tossed years-old claims Wednesday that Credit Suisse Securities (USA) LLC was part of a scheme to jack up stock prices during the dot com era, despite the complaint being amended to include law firm Wilson Sonsini Goodrich & Rosati as an alleged collaborator.
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April 25, 2013
Moelis To Pay $5M To End Claims Over Rural/Metro Buyout
Moelis & Co. LLC has agreed to pay $5 million to former Rural/Metro Corp. shareholders to settle class claims that the financial adviser helped push through a lowball private equity bid for the medical transport company in 2011, according to a letter filed Thursday in Delaware Chancery Court.
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April 17, 2013
KKR Founder, Art Collector Resolve Jasper Johns Spat
Private equity firm Kohlberg Kravis Roberts & Co. co-founder Henry Kravis and art collector Donald Bryant Jr. agreed in New York Supreme Court on Tuesday to resolve Kravis' claims that Bryant reneged on a contract to share three Jasper Johns paintings before donating them to New York's Museum of Modern Art.
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April 16, 2013
Oppenheimer To Retain Valuation Firm In PE Fund Fraud Deal
A private equity fund managed by Oppenheimer & Co. has agreed to retain a third-party valuation consultation to review its investments as part of an agreement in Massachusetts federal court to settle class action claims of performance fraud by a local pension fund, according to documents filed Friday.
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April 10, 2013
Lyondell Judge Axes Highland Contract Suit Against UBS
A New York bankruptcy judge on Wednesday threw out a hedge fund's suit claiming UBS Securities LLC, Lyondell Chemical Co.'s agent for exit financing deals, interfered with a contract related to a $1 billion restructuring loan.
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April 9, 2013
Blackstone Ducks Questions From Frank McCourt's Ex
A New York state judge on Tuesday reduced the number of questions a Blackstone Group LP affiliate's executive must answer about what he told former Los Angeles Dodgers owner Frank McCourt regarding the formerly bankrupt team's value, which McCourt's ex-wife says was lowballed in the couple's divorce.
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April 8, 2013
Reliance Skirts Bid To Block $1.2B Metals USA Deal
A Florida federal judge on Monday refused to issue an injunction in a suit brought by Metals USA Holdings Corp. minority shareholder Savior Associates against Reliance Steel & Aluminum Co. and a private equity firm seeking to bar Reliance Steel from merging with Metals USA in a $1.2 billion acquisition.
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April 4, 2013
Heinz's $28B Buyout Withstands 2 Investor Challenges
Two shareholders who challenged H.J. Heinz Co. over an allegedly self-dealing $28 billion buyout proposal by a private equity firm agreed to dismiss their class actions Thursday, saying they had determined Heinz and its suitors hadn't violated securities laws or their fiduciary duties to investors.
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April 3, 2013
Shareholders Settle Suit Over $656M Clear Channel Loan
Clear Channel Outdoor Holdings Inc.'s board announced Wednesday it had reached a settlement with minority shareholders over a derivative suit alleging the private equity owners of parent Clear Channel Communications Inc. forced the subsidiary to provide the media giant with a sweetheart $656 million loan.
Expert Analysis
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Rise Of The Machines — Predictive Coding Goes Mainstream
The pros of using predictive coding far outweigh the cons. Given the heavy pressure on law firms and in-house counsel to reduce discovery costs, as well as the Justice Department's recent stance on the subject, it appears predictive coding will continue to emerge from the obscure world of legal technology to the mainstream of legal practice, say Michael Moscato and Myles Bartley of Curtis Mallet-Prevost Colt & Mosle LLP.
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PE Investors Should Consider Behavioral Health
As demand for behavioral health services increases, and those individuals with need have insurance that will pay for it, the growth potential for behavioral health services is significant. Private equity investors are well-poised for jumping into this market to bring new business models and innovation to the industry, say attorneys with McGuireWoods LLP.
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Tracking Emerging Growth Cos. Under The JOBS Act
Title I of the JOBS Act significantly reformed the IPO process for emerging growth companies. Although it remains to be seen how and when the U.S. Securities and Exchange Commission will implement other provisions of the JOBS Act, we believe that the IPO on-ramp reforms will continue to take on greater importance as they enter their second year, say attorneys with Latham & Watkins LLP.
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The Who, What And Why Of Public-Private Partnerships
Public-private partnerships have been used in a wide range of sectors to provide public services, from power plants and railroads to hospitals and sanitation plants. Yet there are a variety of potential contractual arrangements and the financing of a PPP can be complex, say Maryam Khosharay and Herbert Glaser of Haynes and Boone LLP.
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5 Reasons For Optimism In The Venture Capital Community
Not every company can be the next Facebook. But thankfully, for many startups, generating one billion users is not the end goal, nor should it be. Enter “narrowcasting” — one of a few reasons to be optimistic about venture capital, despite the first quarter of 2013 being the slowest for fundraising since 2002, says David Kaufman of Thompson Coburn LLP.
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Spotlight On Affiliated Lender Provisions And Debt Buybacks
Over the last few years, provisions in credit agreements permitting the borrower’s equity sponsor and other affiliates to purchase term loans made thereunder and allowing the borrower to “repurchase” such term loans on a non-pro rata basis have become common. But many of the provisions governing such purchases do not adequately protect the non-affiliated lenders’ interests in a bankruptcy of the borrower, say Robert Finley and Ram Burshtine of King & Spalding LLP.
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A Model For Facing Meritless Derivative Suits In Pa.
The decision by the Allegheny County Court of Common Pleas in In re H.J. Heinz Co. Derivative and Class Action Litigation represents a faithful application of the American Law Institute’s Principles of Corporate Governance, which were formally adopted by the Pennsylvania Supreme Court in the landmark decision Cuker v. Mikalauskas, say attorneys with Dechert LLP.
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How Crowdfunding Could Impact Film Financing
The “Veronica Mars” Kickstarter campaign has created a paradigm shift in film financing with successful crowdfunding. While crowdfunding is still a largely untouched topic by the courts, it needs to be red-flagged as an area that is ripe for litigation, says John Stephens of Sedgwick LLP.
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A Significant Impact On Private Investment Funds
U.S. Rep. Keith Ellison, D-Minn., recently reintroduced the Inclusive Prosperity Act of 2013, a financial transaction tax that, according to its supporters, would provide the federal government between $150 billion and $340 billion of revenue per year. The bill is, essentially, a sales tax on large Wall Street banks — however, its provisions seem to impact hedge funds and private equity funds, says David Sussman of Duane Morris LLP.
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SEC Tees Up Private Equity Enforcement Issues
Recent remarks by Bruce Karpati, chief of the Asset Management Unit of the U.S. Securities and Exchange Commission, as well as recent enforcement cases by the SEC, demonstrate an increased focus on the private equity sector — in particular, on aggressive fundraising disclosures, conflicts of interest and “zombie funds,” among other things, say Scott Naidech and Garrett Lynam of Chadbourne & Parke LLP.