Cindy J.K. Davis is an expert in cross-border sleep deprivation.

When the Paul, Hastings, Janofsky & Walker corporate partner closed a $500 million syndicated credit facility for client Rabobank Nederland earlier this month, it was truly a global, round-the-clock deal with a closing that kept lawyers working more than 30 straight hours.

Davis and her team of eight attorneys advised Rabobank as lead arranger and administrative agent in replacing a revolving credit facility for Coral Gables, Fla.-Fresh Del Monte Produce Inc. and some 35 of its subsidiaries around the world, 10 of which were borrowers and another 25 or so that served as guarantors. 

The transaction, according to Davis, involved 25 other banks and employed 20 law firms—including Fresh Del Monte’s in-house lawyers and outside counsel at Cleary Gottlieb Steen & Hamilton in New York.
It also tapped into the laws of 15 far-flung jurisdictions, including Panama, Gibraltar, Liberia, Hong Kong, Chile, Japan, Costa Rica, the United States and the United Kingdom.

To secure the deal, Davis said, her team took liens on personal property in five countries and pledges of stock in 15 others.

The biggest challenge of a deal of this type is just dealing with the complexity of the collateral package for the number of countries and companies involved,” Davis said. “You have to have an understanding of the different legal systems involved to … know can we even take a lien of this type.”

As an example, she said, suppose you take a pledge of stock from a Liberian company with a parent company based in Hong Kong that serves as the pledgor. “Which country’s law should govern, or will New York law work?” she said.

Answering that question involved tapping into the expertise of local counsel around the world, as well as lawyers in Paul, Hastings’ Hong Kong, Japan and United Kingdom offices.

“There’s a lot of complexities involved in just the basic legal framework,” she said. “And then you have to make sure you satisfy all the documentation requirements in each jurisdiction, not just what the document provides on its face, but what other ancillary documents are required. Something as simple as how a document should be executed or signed may be different than in the United States.”

Rabobank, assisted by the Paul Hastings team, put together a syndicate of about 25 other lenders, each of which loaned a percentage of the overall amount to Fresh Del Monte. Once Rabobank and Fresh Del Monte had worked out the terms of the credit facility, the lawyers distributed the documents to the different lenders, gave them an opportunity to comment, coordinated collateral around the world and fielded comments and questions from all the different lenders.

Davis said a major factor in inking a deal of this size in this economy is that Fresh Del Monte had a long-term relationship with Rabobank, which specializes in lending to the food and agricultural industry. But, she noted, Fresh Del Monte did not have as much negotiating power in the credit agreement as it might have had in a more robust economy.

“Lenders in syndicated deals these days are looking for tighter restrictions on companies because of today’s credit standards as this relates to events of default and other covenants in the loan documents,” she said.

Despite the transaction’s level of complexity—the closing checklist alone ran to more than 40 pages—Davis said the deal moved fast.

The lawyers started negotiating the term sheet three months before closing, she said, and the bank met with all the lenders about four weeks prior to closing, which is when most of the international work was done.

“We wound up closing the transaction on a Thursday morning in our office here at 9 a.m., and we worked continuously until Friday at about 2:30 p.m. … All night long, no sleep,” she said. “That’s not unexpected with a deal this size, with all the different time zones involved. It was kind of a rolling call of lawyers all night long in order of time zones.”

And that, she said, is after staying up until 3 a.m. for a week previously, working on various aspects of the deal.

Despite the global nature of the deal, Davis didn’t get to travel to the tropical locales where many of the lenders and Fresh Del Monte subsidiaries are located. “I did it all from the U.S.,” she said. “I would love to have gone … to Costa Rica to eat the pineapple right in the field … [but] with e-mail these days, there’s really no need to travel.”

Lawyers and paraprofessionals at Jones Day racked up an impressive $4.9 million in billings on the Chrysler Chapter 11 reorganization just in the month of June, though the firm is writing off part of that amount.

That’s according to the firm’s most recent monthly statement of services rendered and expenses incurred filed before U.S. Bankruptcy Judge Arthur J. Gonzalez in the Southern District of New York.

According to the filing, attorney fees came in at nearly $4.4 million, for about 8,880 billable hours. Paraprofessionals worked 897 hours, billed at a total of $206,728. Disbursements totaled $379,402.

But, in a related filing, Jones Day noted that the firm had written off a total of $355,656 in fees and expenses during the month of June, or 7.1 percent of the total amount sought.

One of the lead attorneys on the case, Atlanta partner Jeffrey B. Ellman, billed 294.2 hours at $725 per hour.

Among the other law firms filing statements of services and expenses for the month of June were: Schulte Roth & Zabel, special counsel for debtors, at $1.27 million in fees; Kramer Levin Naftalis & Frankel, counsel to the official committee of unsecured creditors, at $1.13 million in fees; and Freshfields Bruckhaus Deringer, special counsel for debtors, at $410,510. 

When Atlanta Fight Clubs LLC entered round two of its Chapter 11 reorganization earlier this month, it acquired a new contender: its former lawyers at Jones & Walden.

The company’s most recent petition lists a $60,000 unpaid tab to Jones & Walden; name partner Leon S. Jones, along with his firm, is listed as an interested party.

The firm was counsel of record for Atlanta Fight Clubs when it first filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Georgia in December 2008. That case terminated on July 22, the same date that the clubs, doing business as KnuckleUp Fitness, refiled their Chapter 11 petition with Craig J. Ehrlich of Ehrlich Law Group as counsel of record. Ehrlich also was counsel of record in the company’s earlier bankruptcy petition.

According to the filing, Atlanta Fight Clubs, which offer boxing, wrestling and other combat sports at locations around Atlanta, has both assets and liabilities of between $1 million and $10 million.

Lawyers from Greenberg Traurig’s Atlanta office have kept busy on the deals front this summer.

Earlier this month, partners David I. Schulman and Stephanie D. Ratcliffe, along with David J. Gellen from the firm’s Palm Beach County, Fla., office represented Servigistics when it was acquired by Marlin Equity Partners. Los Angeles-based Marlin immediately merged its new acquisition with the service networks solution division of another recent purchase, Click Commerce, to form a single company.

That company, now operating under the Servigistics name, is based in Atlanta and focuses on software that helps companies manage and monitor their post-sale service business processes, including service parts, field technician scheduling, routing and pricing management, as well as management of returns, repairs and warranty decisions.

Financial terms of the deal were not disclosed.

In a separate deal, Greenberg Traurig partners Daniel B. Brown and Gerald L. “Jerry” Baxter represented Carmel, Ind.-based Dormir LLC, a company whose subsidiaries offer patient care to those suffering from sleep disorders, in its successful bid to raise $8 million in growth capital from investors CHL Medical Partners and Noro-Moseley Partners.

CHL, based in Stamford, Conn., and Noro-Moseley, based in Atlanta, were represented by attorneys from Morrison & Foerster’s Palo Alto, Calif., office.

You know how you like to gather a group of buddies in front of the flat-screen TV with some good beer and a plate of nachos to watch the game?

Well, the team of attorneys who helped structure the deal to bring four new minority investors into Arthur Blank’s Atlanta Falcons franchise was kind of like that—minus the TV, beer and nachos and plus a whole lot of paper and phone calls.

That’s because many of the lawyers on the deal used to practice together at King & Spalding. Michael J. Egan III, who represented Blank, still works there. Lead counsel for the four investors, Tyler B. Dempsey, spent nine years at K&S before joining Troutman Sanders in 2008. William B. Shearer III, the general counsel of United Distributors, a company headed by one of the new minority investors, was at King & Spalding until about a year ago.

As Egan put it, when he was with opposing counsel on this deal, “You’d often find yourself sitting around talking about things you’d be discussing if you were watching the game with a friend.”

Dempsey said that these negotiations, like most, had moments of conflict. But, he added, “Probably because a lot of the reason these [minority investors] are doing it is for fun, it wasn’t as heated as some of these are.”

In general, Egan said, negotiations involved discussions of when minority investors may or must liquidate their interests; what participation rights and perks minority investors receive; some tax issues related to investing in a limited liability corporation, which is the Falcons’ business structure; and the National Football League’s investor approval process.

“The NFL is very, very strict about who they will have as an owner, even a small owner of one of their teams,” Egan said. “There’s a detailed questionnaire that has to be filled out and submitted to the league, to the financial committee [on which Blank serves]. … They approve not just the people, but they review all the documents and they have to be satisfied with the structure of the deal.”

Egan said that Blank, a co-founder of Home Depot, retains “better than 90 percent control” of the Falcons. The team already had two minority owners—John P. Imlay Jr. and John A. Williams—prior to this transaction. The new minority owners are all local business leaders.

They are: Ronald E. Canakaris, chairman and chief investment officer of Montag & Caldwell, an investment management services company based here; Douglas J. Hertz, president and CEO of United Distributors, a beverage distributor based in Smyrna; Ed Mendel, co-founder of investment-related firms Ned Davis Research Group and Davis, Mendel & Regenstein Inc.; and Derek V. Smith, the former chairman and CEO of ChoicePoint Inc.

Neither Egan nor Dempsey would reveal the value of the transaction. Forbes valued the Falcons franchise at $872 million in September 2008; Blank paid $545 million for the Falcons in 2002.

Forbes, Egan said, has valued NFL teams for years. “If you go back 15 years … the average NFL team has appreciated almost 14 percent per year, and that’s a pretty good investment for something where you get to have a lot of fun, too. All four of these [minority investors] are pretty savvy businessmen. They wouldn’t invest just for fun.”

Dempsey pointed out that a large proportion of sports revenue is derived from media sales. In this era of TiVo, an NFL game is one of the few things people watch live, which makes it a very attractive advertising vehicle. “So there are all these business reasons it is a solid investment,” Dempsey said of why the minority investors were interested in the deal. “And it’s fun—they’re all Falcons supporters and fans.”

Egan said that Blank wanted to bring in more minority investors because he was “looking for some liquidity to fund his foundation further during his lifetime. So that’s really the primary motivation behind this.”

The Arthur M. Blank Family Foundation is a charitable group focused on helping Georgia families and enhancing community life.

In addition to Egan, King & Spalding associate Chirag P. Shah also worked the deal on behalf of Blank, as did tax lawyers Peter J. Genz and Svetoslav S. Minkov.

Dempsey’s team at Troutman included tax partner Robert A. Friedman in the firm’s New York office and associate Brian A. Teras on corporate matters.

“It was interesting,” said Dempsey. “At the end of the day, the documents looked pretty much the same [as for any other deal], but for some reason it’s a lot more fun when the Falcons are involved.”

When Atlanta-based Red Clay Capital Holdings bought motorcoach tourism company Gray Line of Nashville, two groups of local lawyers were involved.

DLA Piper partner Joseph B. Alexander Jr. led the team for Red Clay Capital Holdings, a private investment firm focused on the long-term development of growth-stage companies. Atlanta corporate associate Anthony M. Webb and Baltimore tax partner Jordan I. Bailowitz also worked on the deal.

Terms of the deal, which was brokered by Corporate Finance Associates, a California-based investment bank, were not disclosed. Hoover’s, the business reporting company, estimated that LCL Inc., which operates as Gray Line and offers charter, daily sightseeing and package tours, had 2008 sales of $18.8 million.

Buckhead-based Atlantic Capital Bank provided financing for the deal. The bank was represented by partner Harrison J. Roberts and associate C. Keith Taylor at Parker, Hudson, Rainer & Dobbs.
The representation of LCL Inc./Gray Line was handled by Jeffrey Mobley of Howard & Mobley in Nashville, Tenn.

Legal work related to the reorganization of Lehman Brothers Holdings Inc. has stuffed more than $108 million into law firms’ pockets.

That’s from a post by Zach Lowe on the Am Law Daily blog, a Daily Report affiliate. Lowe’s posting expanded on a Bloomberg News story about the fees paid to bankers, accountants and lawyers in the case—some $262.6 million for work done between Sept. 15, 2008, the date of Lehman’s bankruptcy filing, and June 30 of this year, according to U.S. Securities and Exchange Commission filings.

Eleven law firms—including one based in Atlanta (McKenna, Long & Aldridge); one with an Atlanta office (Jones Day) and another co-founded by a former Atlantan (McKee Nelson)—handled court-appointed work for Lehman or its creditors.

Here’s how the firms rank so far in total Lehman billings:

• Weil, Gotshal & Manges: $63,746,000

• Milbank, Tweed, Hadley & McCloy (lead counsel to creditors committee): $17,246,000

• Jenner & Block (court-appointed examiner): $6,703,000

• Curtis, Mallet-Prevost, Colt & Mosle (special counsel to Lehman on conflicts issues): $6,399,000

• McKee Nelson (special counsel to Lehman on tax issues): $3,993,000

• Jones Day (special counsel to Lehman on Asia-related issues): $2,919,000

• Quinn Emanuel Urquhart Oliver & Hedges (special counsel to Lehman on conflicts): $2,289,000

• McKenna Long & Aldridge (special counsel to Lehman on real estate): $1,473,000

• Bortstein Legal (special counsel on IT issues): $1,338,000

• Simpson, Thacher & Bartlett (special counsel on federal reporting and testimony): $1,248,000

• Reilly Pozner (special counsel on mortgage litigation and claims): $733,000

A peek at the interim compensation applications filed in the Lehman matter in U.S. Bankruptcy Court for the Southern District of New York shows 20 Atlanta lawyers billed hours on the case. All were from McKenna, with John G. Aldridge, senior counsel at the firm, posting the highest hourly rate at $625.

No Jones Day Atlanta lawyers are listed as billing on this matter; most were from the firm’s Hong Kong, Tokyo, Taipei or San Francisco offices.

The highest-billing lawyer with a local connection was William F. Nelson, a former King & Spalding-Atlanta tax partner who left the firm in 1999 to found Washington-based tax and finance boutique McKee Nelson. His hourly tab: $995.

Paul M. Rosenblatt, a Kilpatrick Stockton partner on the firm’s bankruptcy and financial restructuring team, has received the 2008 Transaction of the Year award from the Chicago/Midwest Chapter of the Turnaround Management Association.

Rosenblatt advised AT&T, a member of the creditors’ committee in the bankruptcy of telecommunications provider Trinsic Inc.

The Turnaround Management Association, a 9,000-member organization based in Chicago, recognized Rosenblatt for his work during the bankruptcy sale process, which yielded a 25 percent enhancement in the final sales price of the Tampa, Fla.-based company’s assets.

Rosenblatt described the process of boosting the sales prices as a “tug of war” between what management of the debtor wanted, what the creditors wanted, and what was best for each.

“The debtor selected a stalking horse party who was offering $20 million,” Rosenblatt recalled. “The bid of $20 million was not sufficient to cover the debts that had to be paid in the bankruptcy estate. So we assisted in obtaining another party who was interested in bidding on the assets. There were several hurdles and roadblocks that we overcame to arrive at an auction process in which the parties bid against each other and the sale price ended up increasing by about 25 percent to $25.5 million … so all the debts that had to be paid could be paid.”

In a hearing at the conclusion of the sale, Southern District of Alabama Bankruptcy Court Judge Margaret Mahoney praised the legal team, including counsel for the creditors committee, for successfully handling a multitude of challenging issues.

With the help of a team of lawyers from DLA Piper, private equity firm Navigation Capital Partners has pledged to invest up to $15 million in interactive marketing agency Definition 6.

DLA partner Joseph B. Alexander Jr. (pictured below) and associate Daniel P. Rollman, as buyer’s counsel, advised Navigation in its decision to take a controlling ownership share of Atlanta-based Definition 6.

Definition 6 is the third portfolio company for this private equity firm, which has $375 million under commitment and is focused on investing in middle-market companies. Alexander said he also helped NCP acquire its other two portfolio companies: Dallas-based Exeter Finance Corp. and Atlanta-based James Brown Contracting.

The Definition 6 deal, said Alexander, is a small one for NCP. The company’s investment in Exeter, an auto finance company, for example, was $60 million, he added.

Alexander said his client was interested in Definition 6 because “they believe strongly that businesses are going to look to the Internet to advertise, that interactive media is the wave of the future in terms of advertising dollars.”

Greenberg Traurig shareholder Stacey O. Gallant led the representation of Definition 6, along with shareholders Gary E. Snyder, Ronald W. Eisenman and associate Guillermo N. Wasserman.

The companies now share some top talent. After inking the deal, NCP appointed Managing Partner Larry Mock, Operating Partner O.G. Greene and Vice President Zuri Briscoe to Definition 6’s board of directors.

Definition 6, said Gallant, was interested in the deal because “they wanted the capital so they could expand the products and services offered to their customers and also potentially expand geographically.”

Gallant and Alexander said the deal closed quickly, in part because Navigation financed the transaction itself. The legal work took less than 60 days, Alexander said.

“In this economic climate, that’s kind of astounding,” Gallant said. “And that it actually closed.”

“This is one of the few deals that we’ve gotten started and closed,” Alexander said, explaining that he’s working on a few other potential deals for Navigation. “Until they get closed, though, you just kind of sit and hope. That’s the way it is right now.”

This is not your father’s venture capital fund.

Thanks to an atypical legal structure, the GRA Venture Fund—which recently raised $18.75 million in its first round of fundraising—can operate with a lower cost structure, offer investors state tax credits and offer more hands-on management by board members.

The GRA Venture Fund is part of the Georgia Research Alliance and its program designed to let the state partner with private investors to provide early-stage financing to start-up companies that grow out of the research and inventions created by the state’s universities. Its focus is on technology projects, with a likely emphasis on vaccines, according to David S. Phillips [photo, below right], a partner at Jones Day who, along with colleagues Milford B. Hatcher Jr. and John E. Zamer, advised both GRA and the fund.

But while funds such as this are not unique—other states, including Florida, have them, too—from a legal standpoint, said Phillips, “It’s really a different sort of animal.”

Unlike a typical venture capital fund, according to Phillips, the GRA Venture Fund has no general partner and no carried interest. In a typical fund setup, the general partner manages the fund and raises money for it in exchange for a 20 percent cut of the profits, referred to as carried interest.

To avoid those costs, Phillips said his team structured the fund as a limited liability company, or LLC, rather than as the more typical limited partnership.

The fund doesn’t need a general partner, he said, because the GRA will provide needed administrative, accounting and back-office support at no cost. Also, because the GRA already has a program, called VentureLab, designed to commercialize university research and inventions, the new fund’s goal is to provide a financial bridge for new companies coming out of VentureLab before they’d be mature enough to attract traditional venture capital. The GRA Fund money means there’s no need to hire a general partner to go out and chase more funds, Phillips said.

Also, the LLC structure means that management decisions typically made by the general partner will instead be made by a board comprised primarily of representatives of the investors, he said. The LLC allows board members to actively manage the fund without jeopardizing their limited liability—something that would be at risk if they participated in active management under a limited partnership structure.

“The fund is also a little unique in that the state Legislature passed state income tax credits for investors investing in the fund,” Phillips said. He explains that the providers of the first $30 million to the fund will get a 25 percent, or $7.5 million, state tax credit. There’s also a smaller credit for those who invest in any of the portfolio companies created through VentureLab and the fund.

The tax credits presented yet another legal twist, Phillips said, because many of the fund’s investors—which include Georgia Tech, the Medical College of Georgia and Georgia State University—already are tax exempt.

To avoid using up the available $7.5 million in tax credits with funds from investors who can’t benefit from the credits, Phillips said his team created a parallel fund for tax-exempt investors, allowing only those who can use the exemption to invest in the main fund.

Some of those main fund investors, who also serve on the board or as trustees, include: David Ratcliffe, an attorney who is chairman and CEO of Southern Co.; F. Duane Ackerman, a former BellSouth Corp. chairman and CEO; and Frederick E. Cooper, a former Jones Day lawyer and executive at Flowers Industries who is a longtime leader in the business and Republican communities in Georgia.

Phillips said the fund’s legal structure also was crafted to meet the requirements of the state’s seed capital statute. So far, Phillips said, the state’s seed capital fund has invested $7.5 million, assisted by a team of Bryan Cave-Powell Goldstein lawyers led by Frank A. Crisafi and Riccarda N. Heising.

The goal, Phillips said, is to attract three times the state’s investment from the private sector. Coupled with the tax credits, the fund has the potential to provide more than $100 million in venture financing and to invest in a wide variety of technologies and inventions.

“This was not a plain vanilla deal,” Phillips said.