When Gentiva Health Services Inc. agreed to buy Odyssey Healthcare Inc. for more than $1 billion in one of the larger healthcare deals of the past decade, lawyers from Greenberg Traurig burned the midnight oil for a month to help make it happen.

Gentiva, represented by Gary Snyder, Stacey Gallant and Ron Eisenman, along with about 27 other lawyers in the firm’s Atlanta, Washington and Miami offices, will pay $27 per Odyssey common share in an all-cash transaction to acquire the Dallas-based company.  “Gentiva will be using financing of its existing debt and Odyssey’s existing debt, and the total financing package is approximately $1.1 billion,” Snyder said. “We’ll be handling the financing, too.”

For Atlanta-based Gentiva, the acquisition offers the chance to gain a big chunk of the hospice-care market, which is Odyssey’s focus. Gentiva also provides hospice care, but focuses more on home-health. The combined company is expected to have an average daily patient census of about 14,000 in 30 states.

Odyssey was represented by lawyers from K&L Gates.

Fidelity Southern Corp. is planning to launch a $57.5 million underwritten public offering of its common stock, according to a registration statement filed with the Securities and Exchange Commission on Monday.

James W. Stevens and Christina M. Gattuso of Kilpatrick Stockton represent the underwriters, for which Sandler O’Neill & Partners serves as sole book-running manager, and FIG Partners serves as co-manager.

Fidelity Southern, the holding company for Atlanta-based Fidelity Bank and LionMark Insurance Company, is represented by lawyers from Baker, Donelson, Bearman, Caldwell & Berkowitz’s Memphis office.

According to information from Fidelity, proceeds from the offering will be used to redeem some or all of the preferred shares and warrant held by the U.S. Treasury Department as part of a $48 million loan Fidelity received under the Troubled Asset Relief Program.

McKenna Long & Aldridge lawyers have spent the last few months working on a three-part, $304 million cross-border transaction between two energy marketing companies.

Earlier this month, McKenna partner Ann-Marie McGaughey, the lead lawyer on the deal, helped Toronto-based client Just Energy acquire New York-based Hudson Energy Services, a portfolio company of Chicago private equity firm Lake Capital.

McGaughey said Just Energy has a U.S. acquisition strategy. "We were engaged to help them, really, with their first significant acquisition," she said, adding that the company also is looking at other U.S. opportunities.

According to McKenna partner David K. Brown, who handled the securities aspects of the transaction, Just Energy paid for Hudson Energy by selling $330 million in convertible debentures in Canada to a syndicate of underwriters led by RBC Capital Markets, GMP Securities and CIBC World Markets Inc. Convertible debentures are promissory note-like debt security instruments which can be converted to equity in the issuer, which was Just Energy.

Though the firm also prepared for a private placement in the United States, McGaughey said that Just Energy's business structure—known as an income fund in Canada, not a corporation or an LLC—was so unfamiliar here that it drew no U.S. investors.

"It didn't matter, because they raised more than they needed to," she said. "With energy being such a big focus these days, they've got a pretty strong growth history."

Brown said the deal was complex from a securities standpoint because of the need to make sure it complied with both U.S. and Canadian rules and regulations.

McGaughey said that legal work on the deal began in December but was put on hold while both companies sought consent to move forward from a third party—BP.

"We needed the consent of BP, the oil company … because we both have energy provider agreements with BP, so it was a third-party consent and that caused a couple of months delay," she said.

"When BP came in line, they were a little distracted," she added, referring to the energy giant's oil well disaster in the Gulf of Mexico, which began last month. McGaughey acknowledged that none of the BP in-house lawyers on the deal mentioned the leak during the transaction.

Just Energy's Canadian counsel on the deal were from Burnet, Duckworth & Palmer in Calgary, Alberta. Hudson Energy was represented by Kirkland & Ellis in Chicago.

Ameris Bancorp has acquired its third failed bank from the Federal Deposit Insurance Co. in the last eight months.

Represented by Jody L. Spencer at Rogers & Hardin, Moultrie-based Ameris announced that a subsidiary has agreed to assume $134 million in deposits and acquire about $142.3 million in the assets of Satilla Community Bank, a single-office financial institution based in St. Marys, in South Georgia near Cumberland Island and the Florida state line.

Spencer said he is not yet sure exactly what Ameris is paying for the bank. "That is one of a couple of numbers I don't have yet," he said, adding that the numbers will appear in an 8-K Ameris is due to file with the Securities and Exchange Commission today.

The Georgia Department of Banking and Finance declared the Satilla bank closed on May 14, appointing the FDIC, which was represented in this transaction by its in-house counsel, as receiver. Ameris reopened the bank on Monday as one of its now-54 branches in Georgia, Florida, Alabama and South Carolina.

Ameris agreed to pay the FDIC a premium of 0.19 percent to assume all of Satilla Community Bank's deposits, and the two entities entered into a loss-share transaction on about 80 percent of the assets, as per FDIC policy, Spencer said.

Spencer also said that deals such as this ramp up several weeks prior to a bank's closure, when the FDIC contacts financial institutions it thinks might be a good fit as an acquirer. The FDIC, he said, invites banks to bid on the soon-to-be-closed bank, and other than the price for assets and liabilities to be acquired, there's not much to negotiate under the FDIC's structure.

"It's quite a streamlined process," he said.

FDIC lawyers do not comment on their transactions.

The deal was funded in part by an underwritten public offering of Ameris stock that grossed $90 million when it closed April 20. SEC documents dating to the offering's announcement, in March, said Ameris planned to use the net proceeds "for general corporate purposes, including to fund possible future acquisitions of other financial services businesses (which may include FDIC-assisted transactions)."

Ameris, a financial holding company and the parent company of Ameris Bank, has recent experience with FDIC-assisted transactions in Georgia. In October, it bought Lawrenceville-based American United Bank, which had $85.7 million in loans and $100.3 million in deposits. A month later, Ameris purchased United Security Bank, with branches in Woodstock and Sparta, which had $108.4 million in loans and $140 million in deposits.

While Ameris will pay the FDIC for the Satilla bank, in these prior two transactions, the FDIC paid Ameris a total of about $41.3 million.

Rogers & Hardin was involved in both deals.

According to information from the FDIC, 27 banks have closed in Georgia in the past 12 months, eight of them this year.

Two New York law firms are handling a Southern bank deal worth about $130.6 million.

Greenville, S.C.-based The South Financial Group, represented by Wachtell, Lipton, Rosen & Katz, has agreed to merge with a wholly-owned subsidiary of TD Bank Financial Group, based in Cherry Hill, N.J., and Portland, Maine. TD is represented by Simpson Thacher & Bartlett.

As part of the deal, TD will acquire all of The South Financial Group, including all deposits of Carolina First Bank, which also operates as Mercantile Bank in Florida.

Under the terms of the deal, which has been approved by the boards of both companies, The South Financial Group’s common shareholders will receive, at their election, 28 cents in cash or 0.004 shares of TD common stock for each of their shares of The South Financial Group for a total of about $61 million in cash or common stock. Also, just prior to the completion of the merger, the Department of the Treasury is slated to sell TD its $327 million in The South Financial Group’s preferred stock and an associated warrant acquired under the Treasury’s Capital Purchase Program, discharging accrued but unpaid dividends on that stock for total cash consideration of about $130.6 million.

In an energy industry deal worth $304.2 million, McKenna Long & Aldridge lawyers have helped Canadian company Just Energy Income Fund acquire a privately held marketer of natural gas and electricity.

Just Energy, based in Toronto, acquired all of the equity of Hudson Parent Holdings and Hudson Energy Corp. on May 7, funding its acquisition via an agreement to sell convertible debentures with an aggregate principal amount of $330 million to a syndicate of underwriters led by RBC Capital Markets, GMP Securities and CIBC World Markets Inc. as joint bookrunners.

Hudson operates in New York, New Jersey, Illinois and Texas and serves midsize commercial customers.

The McKenna lawyers who worked on the deal are partners Ann-Marie McGaughey and David Brown, and associate Kristen Beystehner. The Hudson companies were represented by lawyers from Kirkland & Ellis in Chicago; the underwriters' counsel was from Gibson Dunn & Crutcher in Silicon Valley.

United Community Bank has done something a lot of financial institutions might envy: It has sold $103 million of non-performing mortgages and bank-owned properties to an investor at book value and set itself up for a continuing cash infusion from stock sales in the bargain.

One of UCB’s lawyers, James W. Stevens at Kilpatrick Stockton, referred to the complex deal as a “new, new thing … it’s a new form of transaction.”

He said UCB, which is owned by Blairsville-based United Community Banks Inc., the third-largest bank holding company in Georgia, has been a client of the firm’s for more than 20 years. The bank and its lawyers put together a multipart deal, first agreeing to sell about 25 percent of its non-performing assets—primarily residential and commercial loans and other real estate owned properties—to New York-based Fletcher International Inc., represented in this deal by the New York and Palo Alto, Calif., offices of Skadden Arps Slate Meagher & Flom.

“They sold the assets at book value,” Stevens said. “You can move anything if you want to sell at a deep discount … so selling at book value was a big plus for them.”

Another part of the deal was a stock purchase agreement, which gave Fletcher the right to buy $65 million of the holding company’s preferred convertible stock at $1,000 per share, according to an 8-K filed with the Securities and Exchange Commission. Fletcher also gets a warrant in connection with the asset sale allowing it to buy common-stock-equivalent junior preferred stock exercisable up to $30 million. An additional $35 million will be granted if all the preferred stock is purchased.

If Fletcher doesn’t buy all the preferred stock, which is convertible to common stock, by May 2011, it must pay UCB 5 percent of the amount it did not purchase and an additional 5 percent of any amount not purchased by May 2012, according to one of UCB’s 8-K filings.

Another aspect of the deal, according to the SEC filings, was that UCB loaned about $82.4 million of the purchase price, and Fletcher paid $20.6 million in cash. Fletcher also deposited another $18 million with the bank to pre-fund an estimated three years’ of interest, principal amortization and other costs.

“This was something that came together through, honestly, just the persistence and creativity of the officers at United Community Banks,” Stevens said, speaking of CEO Jimmy Tallent, CFO Rex S. Schuette and Chief Risk Officer David Shearrow.

The deal came together quickly. Stevens said discussions began last year, but most of the work was done in a four-to-six-week period this spring thanks to what he jokingly called 12-hour “half-days” of work for the Kilpatrick team, which included Atlanta partners Hilary P. “Hil” Jordan and Richard R. Cheatham, and partner W. Randy Eaddy in Winston-Salem.

The deal needed to move quickly, Stevens said, because the stock aspect requires shareholder approval, and this meant relevant information had to appear in UCB’s April 15 proxy statement to prepare shareholders to vote on May 26.

“There’s a potential issuance of common stock as a result of this transaction in excess of 20 percent of the existing common stock,” he said. If the shareholders don’t approve that potential issuance, he said, “The deal will be capped at 19.99 percent.”

A spirited debate between Fannie Mae and the owner of a more than 1,000-unit DeKalb County apartment complex has ended in a more than $30 million foreclosure sale.

On May 4, the Park at Briarcliff, located near the Target on North Druid Hills Road, was sold on the courthouse steps to Fannie Mae, which held the note and security deed to the property and had, a dozen years ago, provided credit enhancement on a $44.2 million loan funded by a DeKalb County Housing Authority bond issuance.

The dispute leading up to the foreclosure began when the Park at Briarcliff Inc., which owns the apartment complex—but not, according to its attorney, John A. Moore at The Moore Law Group, the 80 acres of land underneath it, which is under long-term lease from the Tuggle family—didn’t meet its deadline to remarket the bonds.

When the debtor missed the deadline, Fannie Mae accelerated the loan payments.

On Feb. 2, “as Fannie Mae was awaiting receipt of a wire transfer from Debtor, promised by Debtor in consideration of Fannie Mae not exercising its right to conduct a non-judicial foreclosure sale which was scheduled that day, Debtor commenced [a] … bankruptcy case by filing a ‘skeletal’ (i.e., having filed none of the required documentation …) voluntary petition under Chapter 11,” Fannie Mae alleged in a motion in U.S. Bankruptcy Court for the Northern District of Georgia.

The motion, asking the court to lift an automatic stay and allow foreclosure proceedings, was filed by Elizabeth George of Aldridge Connors. George is out of the country and could not be reached for comment.

Fannie Mae alleged a host of problems with the loan and the property: The loan balance was $36.5 million, but an appraisal of the property gave it an “as is” value of $25.8 million; nearly a quarter of the units were vacant; 24 units had been damaged in a fire and the property’s condition was deteriorating because of “inadequate preventative maintenance.” Fannie Mae estimated that the complex needed more than $1.6 million in repairs.

In its response, the Park at Briarcliff shot back that “prior to the Note’s acceleration, the Debtor never missed a payment.”

The response also noted that the Housing Authority spent $400,000 trying to remarket the bonds at face value, but couldn’t because of the poor real estate market. In addition, the debtor also argued that it delayed maintenance because it was waiting on a redevelopment that never occurred.

“Over the years, the Property has been one of the few if not the only place for affordable rental housing in this immediate community!” the debtor alleged, also noting that “Fannie Mae and the Housing Authority have a common mission of creating and maintaining affordable housing.”

Judge James E. Massey issued a consent order permitting non-judicial foreclosure of the complex in April.

The case is In re: Park at Briarcliff Inc., No. 10-63241.

King & Spalding lawyers have helped an affiliate of client GE Energy Financial Services close on a $150 million investment in a liquefied natural gas regasification terminal under construction in Pascagoula, Miss.

GE Energy Financial Services paid cash for its stake in Gulf LNG Holdings Group, which it purchased from Houston-based Crest Financial Limited, according to King & Spalding transactional partner Michael J. Egan. Crest was represented by attorneys from Locke Lord Bissell & Liddell's Houston office.

Gulf LNG is building the $1.1 billion liquefied natural gas terminal adjacent to the Bayou Casotte Ship Channel in the Port of Pascagoula, on the Gulf Coast. The facility, which is slated for completion in late 2011, is designed to receive, store and regasify imported LNG. According to information from GE Energy Financial Services, the project has 20-year service agreements with major oil and gas companies to supply LNG, and will connect to four transmission pipelines.

Egan said that because his client was buying into an existing project, the deal's challenges centered on "a very complex set of agreements relating to the financing and the various investors" in the complex, which is financed by a syndicate of lenders led by RBS Greenwich Capital.

"We really had to drill down into those documents and make sure GE understood the terms," he said. "There was no opportunity to recast or renegotiate those agreements relating to the financing of the venture. There are also some very important agreements relating to when the terminal is operational and commitments relating to the natural gas supply."

King & Spalding tax partner James H. Lokey Jr. said his team also had to assess the partnership agreement itself—GE Energy Financial Services bought 30 percent of the facility; El Paso Group, which is managing construction and will operate the facility, owns 50 percent; and the state oil company of Angola, Sonangol USA, owns 20 percent—and the tax basis increases and their effects on the purchase price. 

Other King & Spalding attorneys on the deal included Houston partner Daniel R. Rogers and Atlanta associates Robert J. Leclerc and Svetoslav S. Minkov.

Mark I. Duedall compares distressed asset deals to "a warehouse full of bananas."

That's a reference to how quickly the value of a financially troubled company can spoil as key employees leave, business declines and suppliers demand cash as the company attempts to get its affairs together, regardless if it is in bankruptcy protection.

Duedall and two other lawyers at Hunton & Williams, Amy Alcoke Quackenboss and David M. Fass, have been dealing with a lot of banana-filled warehouses lately. They most recently represented CIT Group/Business Credit Inc., a secured lender, on the sale of two bankrupt companies completed under Section 363 of the U.S. Bankruptcy Code.

Operating under the warehouse-of-bananas philosophy, both deals closed quickly—within about three months of the companies' Chapter 11 filings.

According to the bankruptcy documents, when Springdale, Ark.-based National Home Centers, a supplier of construction materials, filed for Chapter 11 protection in U.S. Bankruptcy Court for the Western District of Arkansas in December, it owed about $4 million to CIT and about $11 million to another secured creditor. When Pelham, Ala.-based Moore-Handley Inc., a building and hardware materials distributor, filed in U.S. Bankruptcy Court for the Northern District of Alabama in July, it owed CIT about $17.5 million.

As Quackenboss put it, the lawyers' role when representing secured lenders in situations like this is to "hope and pray that we get our money out."

For the most part, they did. National Home Centers sold in April to a competitor, Raleigh, N.C.-based Stock Building Supply, for about $15 million. Duedall said that all secured lenders in this action were paid in full, with money left over for the unsecured creditors. Moore-Handley sold in October, also to a competitor, Knoxville, Tenn.-based House Hasson Hardware, for $14.5 million. In this sale, Duedall said, CIT got all of the proceeds less a small amount for employee severance payments and post-closing wind-down costs.

"Whenever you're in a distressed transaction, what every party needs to understand is the secured lender wants to understand the exit … and what is the credible path to get there," Duedall said.

If those questions aren't answered quickly, a secured creditor will move to get its collateral back—through, for example, a 363 sale, which is the sale of an asset in bankruptcy. "The goal is to keep the company alive long enough to maximize your value," said Quackenboss. "As a secured lender, you can't just use a Chapter 11 to sell your assets. There has to be some payment to the estate … to the unsecured creditors, the administrative creditors—the sale cannot just benefit the secured lender."

Lawyers for the secured lender, she said, have to get consensus with counsel for the unsecured creditors, the unsecured creditors' committee and the debtors.

In both the National Home Centers and Moore-Handley bankruptcies, Duedall said, his team realized that the best way to get buy-in from the unsecured creditors committees—largely made up of vendors to the building and hardware supply companies—was to work to keep the debtors up and running so they could continue to buy from these vendors, rather than pushing for liquidation.

In the National Home Centers case, Quackenboss said, the secured lender had to battle with unsecured lenders who thought the business was worth more than the $15 million that stalking horse bidder Stock Building Supply was offering. Then, a second bidder came on the scene and wanted to delay the auction process by six weeks to complete due diligence.

"We had to get with the creditors committee, we had to get with the debtor to form a consensus over what to do," Duedall said. Ultimately, the parties decided to move forward without the late-coming bidder because, he said, so much money was going out the door on professional fees and other expenses that waiting—even for a potentially higher bid—would have been too costly.

In Moore-Handley, Duedall said, a competitor at first wanted to buy the company for just $10.5 million. Another buyer, House Hasson, came to the table two weeks prior to the auction and offered to pay more. But, unlike the first buyer, Duedall said, House Hasson planned to lay off several hundred warehouse employees.

As counsel to the secured lender, he said, the Hunton lawyers told the late-coming bidder that its plan would pass severance costs on to the bankruptcy estate of several hundred thousand dollars—something that was unacceptable unless the sales price was higher. House Hasson eventually agreed that its bids would always be $600,000 to $700,000 higher than those of other bidders at every stage of the auction, Duedall said, and eventually House Hasson placed the winning bid—which was some $4 million higher than the original bidder's offer.

National Home Centers was represented by attorneys from Wright, Lindsey & Jennings in Little Rock, Ark. Its buyer, Stock Building Supply, was represented by Skadden, Arps, Slate, Meagher & Flom attorneys. Moore-Handley was represented by attorneys from Bradley Arant Boult Cummings in Birmingham, Ala.; its buyer, House Hasson, was represented by lawyers from Maynard Cooper & Gale in Birmingham.