Operating out of what used to be an underwear factory in Rabun Gap, the state's first independent power-producing biomass plant officially opened on Earth Day, April 22, thanks to a 20-year, $225 million power purchase agreement put together by lawyers from Autry, Horton & Cole and McGuireWoods.

Green Power Electric Membership Corp., represented by Autry Horton lawyers Charles T. Autry and Roland F. Hall, signed on to buy electricity generated from forest waste such as wood chips, which will then be used by 38 electric cooperatives around the state. A 39th co-op has received board approval to join the group. Hall said he refers to the plant as the state's first "independent" facility of its kind because it is the only biomass plant in Georgia to produce power and sell it to a utility. Some other biomass plants exist in the state, but they do not sell power, instead producing it solely to support their owners' manufacturing processes.

The power producer, Multitrade Rabun Gap, a portfolio company of equity investor Leaf Clean Energy Co., which has offices in London and Washington, was represented by Mark J. La Fratta with McGuireWoods' Richmond, Va., office.

Michael Whiteside, the president of Green Power, said that Multitrade contacted his company about two years ago to gauge its interest in purchasing renewable power. After months of negotiations, the companies reached a deal and Multitrade obtained a $20.7 million loan guarantee through the U.S. Department of Agriculture's rural development program to construct the facility. The plant is located in a former Fruit of the Loom factory that closed in 2006, and Green Power has repurposed the facility, including a boiler that the underwear maker used to generate its own power, to process the biomass.

Autry and Hall said the operation is fascinating to watch. "Semitrailer trucks bring in loads of wood chips, and they … back the semi onto a platform and lock it down," said Autry. "The whole platform pivots on its base, [upending] the truck, and the woodchips fall out by gravity … onto a conveyor belt.

"It's unbelievably clean for something that's burning wood," he said. "You really don't get an odor or smoke or anything."

Autry said contracts to purchase renewable energy are different from contracts to purchase the output of a coal- or gas-fired plant. Coal or gas power is "dispatchable," he said, meaning that you only take the power when you need it. "In this project, you take the power as it is generated, so there are unique issues there," he said, adding that the contract also includes specifications about the type of fuel used, to ensure that it is always environmentally friendly. A biomass contract, he said, also focuses on fuel-price issues, and can include caps or indices to control fuel costs—something that is not an issue, for example, in a contract for the purchase of solar power.

Hall said that renewable fuel contracts also differ from a coal or gas deal because of tax issues. "The developer or the company producing the power typically receives tax credits that may make up a big part of the profit they can anticipate receiving from the project, and there are renewable energy credits, and you have to negotiate who gets those," he said.

In this deal, Multitrade gets the tax benefits—co-ops are not taxable and can't use them; the co-ops get the renewable energy credits, which Whiteside said are not worth much now but could be in the future if legislative changes result in a renewable portfolio standard or laws related to carbon offsets.

This is Green Power's fourth eco-friendly deal, according to Whiteside. He said Green Power also has power-purchase agreements with two landfill methane gas facilities, one in Fayetteville and the other in Taylor County, and a hydroelectric project near Athens at Tallassee Shoals, which is on the Middle Oconee River. Together, these produce about 7.5 megawatts of power.

The new Rabun Gap facility generates 17 megawatts of power, which Whiteside said represents a small portion of overall power use by the individual electric co-ops—about 2/10ths of 1 percent.

Still, it is a large generator of renewable power compared with other facilities in the state. According to Lynn Wallace, a spokeswoman for Georgia Power, her company's Green Energy program purchases 3.2 megawatts of power from a methane gas facility, DeKalb County Seminole Road Landfill, and has 1.5 megawatts of power under contract in a buy-back program from customers who generate their own solar energy.

The production of green power is increasing, however. Wallace said that Georgia Power will purchase an additional megawatt in the solar buy-back program starting June 1. Also around that date, pending approval from the state's Public Service Commission, Troutman Sanders lawyers Kevin C. Greene and Brandon F. Marzo, who also represented Georgia Power in the Seminole Landfill and solar buy-back deals, said that their client will launch a 10-year power-purchase agreement with Waste Management Superior Landfill in Savannah. Wallace said that plant will produce 6.4 megawatts of power.

Greene and Marzo said they're working with Georgia Power now to secure approval from the Georgia Environmental Protection Division to convert Plant Mitchell, near Albany, to a wood-fueled biomass facility that could produce about 100 megawatts of power. Greene said the plant is likely to go online in the next several years.

Whiteside, the Green Power president, said that next year his company plans to begin purchasing power from a biomass facility near Carnesville. The plant's power will come from one of the most renewable fuels of all: chicken poop.

In a single week, attorneys at Lawson & Moseley closed seven loans totaling about $18.7 million—all guaranteed through the U.S. Department of Agriculture Rural Development Program, which provides funding for improvements in rural areas.

William H. Lawson, the firm's managing partner, said the rush of closings was fueled in part by the federal stimulus package that, according to information on the USDA's Web site, poured additional money into the program and cut front-end loan costs such as guaranty fees.

The stimulus program, he said, helped revive a "virtually nonexistent" secondary market that had guttered during the financial crisis. In the secondary market, a brokerage firm will take the guaranteed portion of a loan and sell it at a premium to pension funds and institutional investors.

"The banks today are very concerned about cash and cash availability," he said, explaining that the revived secondary market has motivated banks to lend because the investors in effect reimburse the bank for the loan, giving it cash that it can use to make additional loans while getting a secure investment for themselves.

Lawson, along with attorneys Heather D. Hestley and Dallas R. Ivey, represented Illinois-based Ridgestone Bank to close five loans totaling about $14.4 million for five limited liability companies in an interrelated purchase and sale of nursing homes in rural southwestern Missouri. Lawson said attorney Sam E. Thomas represented the nursing homes. Thomas was out of town and could not be reached by press time.

The Lawson & Moseley lawyers also closed two other loans totaling $4.3 million, according to Hestley, for lenders Ridgestone Bank and Community Bank & Trust-West Georgia, to fund assisted living facilities in Georgia and Alabama. Lawson said Gregory P. Youra at Holt Ney Zatcoff & Wasserman represented the assisted living facilities. Youra could not be reached by press time.

King & Spalding lawyers represented an affiliate of client Roark Capital Group in its acquisition of Wingstop Restaurants Inc., a chain of chicken-wing eateries whose marketing materials say the company has sold more than 2 billion wings since its founding in 1994.

Roark, an Atlanta-based private equity firm that specializes in franchising, formed Wing Stop Holding Corp. to acquire the Richardson, Texas-based chain, which has 650 restaurants open or in development and posted more than $300 million in revenue in 2009. Terms of the deal were not disclosed.

A team of lawyers from several King & Spalding offices worked on the deal. The primary Atlanta partners were Raymond E. Baltz and William G. Roche on corporate matters, Les A. Oakes on environmental issues and Donald S. Kohla on tax matters.

Wingstop was represented by Countryman Law in Southborough, Mass. The acquirer's financial adviser was Cowen & Co.

Roark, which focuses on middle-market investments in companies that have revenues ranging from $20 million to $1 billion, also holds other restaurant brands in its portfolio, including Carvel, Cinnabon and Moe's Southwest Grill.

Earlier this year, King & Spalding represented Roark when it acquired a majority ownership interest in Marietta-based Peachtree Business Products.

No Atlanta outside counsel were in on the action when Mirant Corp. and RRI Energy decided to merge, according to an e-mail from Mirant’s general counsel, Julia Houston.

On Sunday, the companies announced their intent to unite in a $1.6 billion stock-swap, tax-free deal to create GenOn Energy.

Mirant, a Southern Co. spinoff which in the past has been represented for various reasons by lawyers from local firms including King & Spalding and Alston & Bird, chose Wachtell, Lipton, Rosen & Katz as its counsel. RRI, based in Houston, was represented by Skadden Arps Slate Meagher & Flom.

When IntercontinentalExchange landed $725 million in new senior unsecured revolving credit facilities from a syndicate of lenders, it tapped Locke Lord Bissell & Liddell partner Philip A. Cooper to lead the deal.

IntercontinentalExchange, known as ICE, operates regulated futures exchanges and over-the-counter markets for agricultural, credit, currency, emissions, energy and equity index contracts. The company, according to an 8-K filed with the Securities and Exchange Commission, is using the new funds to replace a $100 million facility it terminated and a $300 million senior unsecured revolving credit facility which was set to expire in early April.

Much of the funds are slated to provide liquidity for ICE’s clearing-house subsidiaries in England, Wales, Canada and the United States.

The lenders on the new facilities, which have a three-year term, are Wells Fargo and Bank of America. They were represented by attorneys from the Charlotte office of Robinson, Bradshaw & Hinson. Along with Cooper, Locke Lord associate Enan E. Stillman and ICE’s associate general counsel, Andrew J. Surdykowski and assistant general counsel, David C. Clifton, also worked on the deal.

In a market largely bereft of real estate deals, federal stimulus programs and funds are creating work for dirt lawyers—and tax and bond counsel, too.

Althea J.K. Broughton at Arnall Golden Gregory is one of those lawyers. Her team recently closed two multifamily affordable housing transactions, one in the City of Decatur, the other in Union City. Both deals involved a complex mix of funding sources and took more than a year to complete.

The $5.8 million Decatur project, called Allen Wilson Phase I, will be located in downtown Decatur at Robin Street, Electric Avenue and Commerce Drive. Broughton, along with Arnall lawyers Alison M. Drummond, James T. Rauschenberger and A. Rian Perry, represented the Decatur Housing Authority and two affiliates to negotiate financing for the city’s first mixed-finance transaction of this type. The housing authority’s general counsel, Alan E. Rauber of McCurdy & Candler, also was involved.

“I think this deal is somewhat unusual,” Broughton said. “Typically, first of all, there are not very many bond deals that are closing in this environment, so when I say unusual, I mean that. Also, this was not your typical bond deal with an issuer and an indenture and a trustee. This was a little bit different in that you had the housing authority issuing notes that were purchased by Fannie Mae as part of a tax-exempt execution.”

Broughton said she helped her client get various approvals from the Department of Housing and Urban Development, which requires them in mixed-finance transactions. She said the tax-exempt bonds required HUD approval because the Decatur Housing Authority was essentially borrowing against a future stream of funds from HUD, then using those rights as collateral on a tax-exempt loan from Fannie Mae. The lawyers also got HUD approval for the receipt of stimulus funds under the American Recovery and Reinvestment Act, or ARRA.

Caryl Greenberg Smith of Hunton & Williams, who served as bond counsel on both the Decatur and Union City deals, said that Fannie Mae is trying to promote affordable housing by purchasing notes directly rather than having the housing authority market the notes publicly. Such deals, she said, can offer a “huge, huge reduction in the interest rate compared to what you would have gotten in the market.”

The bond aspect of the Decatur deal also yielded 4 percent housing tax credits from the Georgia Department of Community Affairs, Broughton said, which were then sold to equity investor Peachtree Investment Solutions, LLC, represented by Aaron J. Kowan at Taylor English.

Kowan said his client invested about $2 million, but that the deal’s sophistication and complexity was on par with $30 million projects. “For the size of the deal, it was probably the most complicated deal I ever worked on. I wish I’d known that before I took the deal,” he said, and laughed. “I was working on a flat fee.”

Kowan, a tax lawyer who worked on the transaction with associate Brandon C. Hardy, said the deal was complex because it involved three to four levels of debt, each with unusual business and tax issues related to the public-private partnership, and unusual guaranty provisions related to HUD backing.

In the Union City deal, Broughton’s team represented Ambling Development Partners, which plans to build a 150-unit elderly housing complex known as Woodbridge at Parkway Village at the intersection of Southwood Road and Thompson Road.

Broughton said this deal, worth $16 million, included ARRA stimulus funds through HUD and bonds which were credit-enhanced by the Federal Housing Administration to make them more marketable. The bonds, which are tax-exempt and yield a 4 percent tax credit, were purchased by equity investor Community Affordable Housing Corporation, represented by Robert G. Coberly from Bryan Cave’s Washington office.

Broughton said stimulus funding was crucial to both deals, and is providing a boost to real estate work in general. “I really think the stimulus funds have actually helped save some deals or made some deals viable and have gotten them to closing,” she said. “Initially we all had to figure out how those funds would work, but I think they’ve promoted a lot of development activity.”

A new Thomson Reuters report which analyzes deal activity in the first quarter indicates that although the number and value of deals is rising, only a few Atlanta-connected firms are even claiming a spot on transactional league tables.

First, the (mostly) good news: The value of worldwide mergers and acquisitions activity between Jan. 1 and March 31 rose 21 percent over the same period in 2009, totaling $573.3 billion, according to the report. Deal value still declined about 5 percent, however, between the fourth quarter of 2009, which saw $602.5 billion in deals, and the first quarter of 2010.

The number of announced deals—more than 9,000—rose 4 percent compared with last year.

The busiest firms working on worldwide announced deals include No. 1-ranked Cleary Gottlieb Steen & Hamilton, with 26 deals valued at $114.8 billion. Jones Day is the only locally connected firm on the list, with 95 pending deals valued at $18.2 billion.

Cravath, Swaine & Moore ranked No. 1 on deals completed during the first quarter, handling 12 valued at $84.7 billion. Again, Jones Day was the only locally connected firm, coming in at No. 21 with 95 deals valued at $22.9 billion.

Atlanta-connected firms fared better on lists focusing on work done or pending in the Americas. Alston & Bird, DLA Piper, Jones Day, McKenna Long & Aldridge and Sidley Austin all made lists of firms involved in U.S. or Canadian deals, though none took a top spot in terms of deal value.

In the European rankings, Greenberg Traurig snagged the No. 2 spot among firms handling Spanish deals; DLA Piper, Hunton & Williams, Jones Day, McKenna and Sidley Austin also made the European rankings.

Jones Day made several lists of firms handling Asia-connected deals. The firm, along with DLA Piper and Sidley Austin, also landed on lists of firms handling deals in Japan, Australia and New Zealand.

You can view the full report at Thomson Reuters.

Kilpatrick Stockton’s Gregory K. Cinnamon represented AGL Resources in its decision to sell a telecommunications unit to Louisville, Colo.-based Zayo Group for $71.5 million.

The unit being sold, AGL Networks, is what’s known as a dark-fiber telecommunications business. That means that AGL has laid fiber optic cabling to connect office buildings and other users, but does not provide telecommunications services itself, instead leasing its 795 route miles and 182,000 fiber miles connecting customers in primarily in Atlanta, Phoenix and Charlotte to other providers. This is similar, Cinnamon said, to AGL’s business model in the deregulated gas industry, where the company provides the pipes that transmit gas, but other marketers supply the gas itself.

Cinnamon said that when AGL decided to divest itself of some non-core assets, its financial adviser, SunTrust Robinson Humphrey, ran an auction to sell AGL Networks, attracting several other national and regional companies to the bidding pool.

“It was good to get out and just see an active bidding process for the asset,” Cinnamon said. “There were several people who were interested, and it just goes to show that good assets will always find a home.”

Zayo, which provides telecommunications, Internet and bandwidth infrastructure services in 23 states, is paying cash for AGL Networks. The acquiring company was represented by attorneys from Holme Roberts & Owen in Denver.

Cinnamon said he worked with AGL’s in-house counsel, William A. Palmer III, as well as people on the company’s business side, to negotiate and document the agreement, and to separate AGL Networks from any entanglements with its parent company. The agreement was signed March 23 and is expected to close by the end of the second quarter, pending approval under the Hart Scott Rodino Act and from regulators and third parties.

When Centerline Capital Group, a New York-based commercial mortgage servicer, ran into financial trouble and launched a series of transactions to recapitalize its equity and restructure its debt, local lawyers from Kutak Rock and Paul Hastings Janofsky & Walker were in on the action.

Specifically, the lawyers worked on modifying Centerline’s obligations to Merrill Lynch Capital Services related to more than $400 million in credit default swaps associated with guaranteed low income housing tax credit funds.

Credit default swaps are essentially agreements that allow a lender or investor to transfer credit risk to another party, who guarantees a rate of return in exchange for a fee. In this instance, credit default swaps were used to encourage investors to pour equity into low income, multi-family housing developments so they could receive tax credits associated with those projects in return.

“Centerline was one of those entities that would go out and acquire interests and be entitled to get tax credits, then they’d syndicate those,” said Kutak partner David Nix, who, along with associate Andrew Egan, represented Merrill. “They’d put 15 properties together and sell them to other investors or provide credit to guarantee those tax credits, and investors would buy, essentially, a guaranteed return. “

Investors who buy these tax credits take a risk, Nix said, because a project may not be built correctly, or the developer may lose the credit because it fails to set aside enough units for low and moderate income people. Investors don’t want to have to monitor this process, so Merrill steps in to do so, guaranteeing investors’ rate of return in exchange for a fee.

What investors get, according to Michael Haun, an Atlanta Paul Hastings partner who worked on the deal for Centerline along with about a dozen attorneys from his firm’s New York office, is some fairly minimal cash distribution along with the more lucrative depreciation deductions and tax credits that they can monetize by claiming them on their own corporate tax returns.

The groundwork for this deal was laid in July, Nix said, when Centerline ran into financial trouble and needed to revamp its debt and equity structure to sell off some assets. Island Capital, a company owned by New York real estate investor Andrew Farkas—who made a fortune in the mid-1990s by purchasing troubled real-estate limited partnerships for his company, Insignia Financial Group—wanted to buy Centerline’s unit that specialized in restructuring ailing mortgages that had been packaged into bonds. But to get the $110 million deal done, Nix said, Farkas wanted Centerline to restructure its debt, and modifying its obligation to Merrill was part of that package.

Nix said he and Egan—along with Atlanta partners Cory B. Thompson and Calvin P. Jellema, who handled security and corporate due diligence matters, and lawyers in Kutak’s Omaha and Denver offices—helped the company revamp, in just eight days, an earlier agreement with Centerline that had taken years to build.

“We worked with Merrill probably about two years to structure this under the ISDA [International Swaps and Derivatives Association] documentation,” Nix said, explaining that much of that time was spent working to understand the market for these types of agreements. “They’re a version of a credit default swap. We called them Investor Floor Return Agreements, or IRFAs, because the investor is assured a minimum rate of return.”

Nix said it was possible to renovate the agreement quickly because documentation was based on ISDA terms that all the parties were familiar with. “You’re not negotiating a 200-page document, you’re negotiating an 8- to 10-page modification of the standard terms of ISDA,” he said.

Haun, of Paul Hastings, examined the tax aspects of the deal to make sure that the two swaps put in place wouldn’t cause adverse tax consequences, lowered yields or cancellation of indebtedness issues that would affect either Merrill or guarantor Natixis Financial Products Inc.

In the end, according to an 8-K filed with the Securities and Exchange Commission, Centerline altered its debt service coverage ratio by transferring its obligations to a subsidiary, relieving Centerline of a potential contingent liability in a notional amount of about $400 million.

“One of the risks to the purchaser of tax credits is if the project goes into default on other debt,” Nix said. “So Merrill agreed to release some collateral if they pay down debt on some projects that are overleveraged, once construction is completed.”

As part of this, according to the 8-K, Centerline assigned its rights to future fees or loan repayments and to the transfer of $67.2 million in cash collateral posted to secure its obligations to Merrill. Merrill, for its part, agreed to release up to $35 million of that collateral to help properties in which various tax credit funds hold interests if, Nix said, Centerline pays down debt on overleveraged projects.

Nix, whose practice focuses on derivatives and structured finance work, said the economy took less of a toll on his billables than it could have because Merrill, a significant client, used collateralized swaps.

“Swaps have obviously gotten a bad name—credit default swaps especially, but a swap is a financial transaction, and either you can get good collateral for your transaction or not. A lot of swaps are essentially done on the general credit of a party, and that’s basically an unsecured loan. An example of that is Enron,” he said. “The vast majority of what we’ve done in the Atlanta office with Merrill is collateralized … essentially secured. We’ve done pretty well because they underwrote them the correct way, which some people in the business did not.”

Card-and-party-supply store Swoozie's has been sold at auction for $2 million more than a stalking horse bidder had offered for the bankrupt company.

At an auction held in a conference room at the offices of Swoozie's counsel, Alston & Bird, Northbrook-Ill.-based Hilco Merchant Resources in-house counsel Joseph A. Malfitano tendered the winning bid of $7,425,000 to purchase Atlanta-based Swoozie's.

Hayden Kepner Jr. of Scroggins & Williamson represented the stalking horse, Newton, Mass.-based Hudson Capital Partners, which had posted a starting bid of $5,435,000. The inventory, according to court records, was valued at about $18.4 million.

A stalking horse bidder is one chosen by a bankrupt company from a pool of contenders that—in exchange for some downside protections if it doesn't tender the winning bid—launches bidding on the asset at an agreed-upon starting price, effectively protecting the seller from lowball offers. Attorneys involved in the deal said that stalking horse bidders get outbid roughly 30 to 50 percent of the time.

Kepner said Hudson Capital got a breakup fee of $75,000 since it did not end up buying Swoozie's. He said he was surprised that his client didn't win the day, but he knew competition would be stiff because there were several other bidders—Gordon Brothers Group/Gordon Brothers Retail Partners and Great American Group, in addition to Hilco—all of which are major liquidators.

"There's not a lot of liquidations going on in a lot of retail chains, so you had a lot of competition for this one" simply because liquidators were looking for something to do, he said. "The price was significantly higher than we thought it would go. It's good for the creditors, but it doesn't do the debtor much good."

The company's largest secured creditor, Wells Fargo, is owed more than $3 million, Kepner said.

The winning liquidator, Hilco, on Tuesday launched "Going out of business" sales at 43 Swoozie's stores around the country. Five of those stores are in the Atlanta area. Under the terms of the agreement, Hilco may supplement Swoozie's existing inventory, but 75 percent of the new items must come from Swoozie's usual vendors.

During the auction, Kepner said, the bidders established specific bidding procedures and a bidding order and agreed to make bids in $100,000 increments. After that orderly beginning, he said, an auction becomes "pretty free flowing," with bidders attempting to tailor contract terms to their liking. In this auction, for example, his client wanted to purchase Swoozie's intellectual property—including its name and customer lists—and its lease designation rights. Winning bidder Hilco did not purchase those assets, which the court record indicates will be sold separately.

Kepner said the sale was structured essentially as an agency agreement. Hilco, he said, did not actually buy the inventory because it couldn't do so legally.

"The landlord is going to have all sorts of prohibitions on somebody else coming in and selling things other than the tenant," he said. "So legally they enter into an agency agreement where the liquidator acts as an agent for the tenant to sell the stuff, and they guarantee a certain fee, which conceptually is the same as buying all the inventory at a certain price, but technically they're not taking ownership of it."

If sales get above a certain level, he said, some of the proceeds will be shared with the debtor.

The auction process itself was a calm one, Kepner and Malfitano said, with Swoozie's financial adviser, Clear Thinking Group, running the process.

"There's not somebody who's standing up there doing the patter," Malfitano said. He said the auction got started at about noon and ended around 6 p.m. on March 25. U.S. Bankruptcy Judge C. Ray Mullins approved the sale on Tuesday.

Swoozie's counsel at the auction, Wendy R. Reiss of Alston & Bird, did not return calls seeking comment. The official committee of unsecured creditors was represented by Darryl S. Laddin of Arnall Golden Gregory.

The auction took place only 23 days after Swoozie's filed for Chapter 11 reorganization on March 2. John W. Mills III of Barnes & Thornburg, who did not attend the auction but served as outside counsel to winning bidder Hilco, said people have been asking him why the sale moved so quickly.

"Easter is coming, Mother's Day, Father's Day, high school and college graduations, weddings," he said, noting big sales opportunities for Swoozie's products. "That's what drove the sale and why it was done on this timetable."