A merger between two pharmaceutical companies may be just what the doctor ordered in this ailing economy.

W. Tinley Anderson III, a partner at Paul, Hastings, Janofsky & Walker, is advising Sciele Pharma Inc. in its pending $150 million acquisition of Victory Pharma Inc. He said the deal is expected to close in June, pending Hart-Scott-Rodino Antitrust Improvement Act approval by the Federal Trade Commission.

Sciele will pay cash at closing for Victory. Anderson said Sciele is financing the deal itself, out of funds from operations.

“The interesting thing is that it expands Sciele’s product portfolio to now include pain management as one of its therapeutic areas. It’s a fairly well-known product [Victory] provides called Naprelan,” Anderson said, explaining that Sciele’s focus up to now has been on prescription medications for cardiovascular disease, pediatrics and women’s health. “Sciele certainly has a substantial sales force, much more substantial than the existing sales force at Victory, so it has the distribution channel to maximize the product’s market potential.”

Sciele is an Atlanta-based company that was acquired in October by the publicly traded Shionogi & Co. Ltd., based in Osaka, Japan, in a $1.4 billion deal, Anderson said. Victory Pharma is a San Diego-based private company.

Anderson’s team at Paul Hastings also included associates Michael J. Greene and Clare Y. Arguedas. Sciele’s general counsel, Leslie B. Zacks, also worked on the deal.

Victory was represented by a team of lawyers from Pillsbury Winthrop Shaw Pittman, led by partner Christian A. Salaman.

The past month or so has been active for deals in the pharmaceutical industry. On May 21, Johnson & Johnson announced a definitive agreement to acquire Cougar Biotechnology for $1 billion. Last month Pfizer and GlaxoSmithKline announced an agreement to form a company specializing in the development and commercialization of HIV medicines.

“Pharmaceutical companies are feeling the pinch of this economy,” Anderson said, “But people still get sick. People still need medicines. So the pharmaceutical industry is probably one of the few industries that have weathered the recession OK. Their M&A activity stands out.”

A group of Atlanta attorneys from Paul, Hastings, Janofsky & Walker advised a struggling Florida bank on its acquisition by a private equity group after it was shut down by federal regulators.

In the deal, BankUnited Financial Corp. of Coral Gables, Fla., was acquired by a consortium of private equity funds, including WL Ross & Co., Carlyle Investment Management LLC, Blackstone Capital Partners and Centerbridge Capital Partners LP. Former North Fork Bancorp Chief Executive Officer John Kanas was also an investor and will become BankUnited’s new CEO.

The WL Ross/Kanas group beat out a competing offer by Goldman, Sachs & Co. and TD Bank, according to newsletter The Deal.

BankUnited had assets of $12.8 billion and deposits of $8.6 billion as of May 2. BankUnited’s failure will cost the FDIC about $4.9 billion.

The reorganized BankUnited will retain its status as the largest banking institution with a Florida headquarters, according to the Federal Deposit Insurance Corp. It operates 86 branches primarily in south Florida.

Paul Hastings partner Walter Jospin was lead adviser to BankUnited’s board of directors. The Paul Hastings group was also regulatory and bankruptcy counsel to BankUnited’s holding company. Paul Hastings banking partner John Douglas and corporate partner Erik Belenky in Atlanta, and bankruptcy partner Richard Chesley in Chicago worked with Jospin.

Skadden, Arps, Slate, Meagher & Flom partners David Ingles and William Rubenstein in New York and William Sweet in Washington advised Kanas and WL Ross, Carlyle, Blackstone and Centerbridge. Simpson Thacher & Bartlett also advised Blackstone, Carlyle and Centerbridge. Wachtell, Lipton, Rosen & Katz also advised WL Ross.

The BankUnited deal is the second acquisition of a bank by private equity investors this year. Banks have been failing in the U.S. at a rapid pace; BankUnited is the 34^th  bank insured by the FDIC to be closed this year.

A floundering mortgage company owes two law firms with Atlanta offices—Paul, Hastings, Janofsky & Walker and Littler Mendelson—nearly $2.3 million in legal fees. Other law firms around the country also are claiming the company owes them money.

The company, Accredited Home Lenders Holding Co., listed Paul Hastings as one of its 30 largest unsecured creditors in its bankruptcy filing in U.S. Bankruptcy Court for the District of Delaware. Court filings show Accredited owes Paul Hastings $1,932,371; its outstanding debt to Littler Mendelson is a more modest $362,726.

Spokespeople for Paul Hastings and Littler Mendelson both declined to comment on the case.

Accredited’s largest legal creditor is Kirkland & Ellis, to which it owes $1,959,843. Other law firms waiting for a payout are San Diego’s Luce Forward Hamilton & Scripps ($606,772) and the Alabama firm now called Bradley Arant Boult Cummings ($204,009).

In all, the company’s legal bills outstanding—at least to the firms which are on its list of largest unsecured claims—top $5 million, according to documents in its Chapter 11 reorganization filing.

Accredited, based in San Diego, was one of the largest mortgage originators in the country, with a focus on subprime loans. It was acquired in 2007 by private equity firm Lone Star Funds, and is now in the process of selling off its remaining assets. The company has listed debts in excess of $214 million just to its 30 largest unsecured creditors. Its bankruptcy petition lists total liabilities rising as high as $500 million, owed to some 10,000 creditors.

Attorneys from Hunton & Williams’ Dallas office are representing Accredited in its reorganization, along with Pachulski Stang Ziehl & Jones, a bankruptcy boutique with offices in California, New York and Delaware. 

It’s not a multibillion-dollar merger, but it’s a sign that perhaps the economy isn’t totally kaput.

The sign is that credit is being extended to borrowers. In this case, the credit is a $25 million loan from General Electric Co.’s GE Capital lending unit.

The healthcare financial services division of GE Capital extended the credit facility this month to Regency Healthcare Group, a hospice provider based in the Nashville suburb of Brentwood, Tenn. Regency is a portfolio company of Atlanta private equity firm EDG Partners LLC. GE Capital said Regency will use the credit facility to refinance existing debt and to grow the company. Regency operates 17 hospices in the southeastern U.S.

Kilpatrick Stockton partners Raj Natarajan, Naho Kobayashi and Art Gambill and associate Angela Ramson advised GE Capital. Paul, Hastings, Janofsky & Walker associates Shannon Baxter [photo, left] and Behrouz Kianian advised Regency and EDG Partners. No Paul Hastings partners were involved in the transaction, Baxter said.

A group from Paul, Hastings, Janofsky & Walker was legal counsel to homebuilder Ashton Woods USA LLC on restructuring its balance sheet.

Securities partner Elizabeth Noe, commercial lending partner Kevin Conboy and real estate finance partner Charlie Sharbaugh advised Ashton Woods on the complex series of transactions, according to the law firm. All three lawyers are based in Atlanta.

Ashton Woods obtained new capital, reduced its overall debt and improved its liquidity as a result of the plan, the company said in a regulatory filing. Under terms of the restructuring, “all prior defaults under [Ashton Woods’] senior credit facility and $125 million 9.5% Senior Subordinated Notes due 2015 were either waived or cured,” according to the filing.  The plan was designed to align [Ashton Woods’] capital structure with the current economic environment,” the company said.

Among the transactions that comprised the plan were a private exchange offer, a $20 million capital investment from Ashton Woods’ existing equity holder and the repayment of an existing bridge loan. Ashton Woods completed the restructuring on Monday.

Ashton Woods builds single-family homes, townhomes and condos in Atlanta, Dallas, Houston, Orlando, Phoenix, Denver and Tampa.

The Securities & Exchange Commission has dismissed its probe of alleged stock-options backdating violations at Atlanta’s TurboChef Technologies Inc.

The SEC sent a no-action letter on Nov. 6 to TurboChef’s outside counsel on the internal investigation, Paul, Hastings, Janofsky & Walker partner Walter Jospin.

“We do not intend to recommend any enforcement action by the Commission,” the SEC said in the letter.

The SEC began its investigation in March 2007, according to TurboChef’s 2007 annual report, saying it was looking into the company’s stock option grants dating back to Jan. 1997. In response to the SEC notice, TurboChef hired Paul Hastings as legal counsel, and Deloitte Financial Advisory Services as “forensic accounting experts,” to conduct its internal investigation, the annual report says. TurboChef’s audit committee hired Kramer Levin Naftalis & Frankel partner Thomas Molner as its legal counsel.

As a result of its internal investigation, TurboChef restated its financial results for 2004 and 2005, saying different measurement dates should have been used.

TurboChef in August announced that it would merge with Middleby Corp. in a $200 million deal. Paul Hastings also advised TurboChef on that assignment, with partner Rey Pascual taking the lead role. TurboChef makes high-speed ovens used at Subway and other restaurants.

Paul, Hastings, Janofsky & Walker partner Jesse Austin is representing a group of lenders—including UBS and General Electric Capital—on providing financing to a Texas-based trucking company that filed for bankruptcy this week.

Austin, a financial services and restructuring partner in Paul Hastings’ Atlanta office, specializes in debtor-in-possession lending, according to the law firm’s web site.

The trucking industry has been hit hard [see Deal Watch Blog story from Oct. 10] by a variety of factors, including a rise in fuel costs and declines in shipments by retailers and automakers. A number of trucking companies have filed for bankruptcy this year, including Jevic Holding Corp. and Jim Palmer Trucking.

GWLS Holdings Inc.’s Greatwide Logistics Services filed for Chapter 11 protection on Monday in U.S. Bankruptcy Court for the District of Delaware. Greatwide is financing its daily operations with debtor-in-possession lending of as much as $73.6 million from UBS, GE Capital and Abelco Finance LLC, according to a court filing. Paul Hastings is advising UBS, GE Capital and Abelco.

Greatwide, of Dallas, operates dozens of subsidiaries engaged in freight trucking, logistics and brokerage industries. The company’s customers include Wal-Mart, Ford Motor, General Motors and UPS, according to Greatwide’s web site.

As part of its Chapter 11 filing, Greatwide said that it has agreed to sell itself to two private equity firms, Centerbridge Capital Partners LP and D.E. Shaw & Co., according to a press release. Other companies will be allowed to make higher offers during the bankruptcy procedure, Greatwide said.

Among Greatwide’s largest creditors are Comdata Corp. of Birmingham, Ala., and Atlanta, owed an estimated $2.5 million in trade debt; Ryder Transportation Services of Atlanta, owed an estimated $200,000; and Great Dane Trailers of Atlanta, owed $52,000.

Willkie Farr & Gallagher and Young, Conaway, Stargatt & Taylor are bankruptcy co-counsel to Greatwide. Paul Hastings partner Leslie Plaskon in New York is working with Austin on advising the DIP lenders.

Now that an involuntary petition for Chapter 7 bankruptcy filed against AtheroGenics Inc. has been converted to Chapter 11 status, interested parties are lining up legal counsel.

King & Spalding partners James A. Pardo Jr. and Mark Maloney are representing AtheroGenics in the matter. Pardo filed the motion on Monday to convert the case to Chapter 11. King & Spalding associate Michelle Carter is also working on the case.

On Monday, Pardo submitted a request to the court that Paul, Hastings, Janofsky & Walker partners Walter Jospin in Atlanta and Richard Chesley in Chicago be approved as counsel to the independent members of Atherogenics’ board of directors.

Additionally, Greenberg Traurig partners John D. Elrod of Atlanta and John B. Hutton III of Miami are advising The Bank of New York Mellon, an interested party in the case.

Last month, a group of five hedge funds filed an involuntary petition against AtheroGenics. That filing came after the company had said it wouldn’t make a payment on some of its outstanding debt and after it had hired Morgan Stanley to explore strategic alternatives.

The group of hedge funds, which includes AQR Capital Management LLC of Greenwich, Conn., is taking legal advice from Powell Goldstein partner Penn Nicholson in Atlanta and from a group of Wilmer Cutler Pickering Hale and Dorr attorneys in New York. AtheroGenics’ general counsel is Joseph M. Gaynor Jr., a former Powell Goldstein associate.

As of Wednesday morning, U.S. Bankruptcy Court Judge James Massey had not yet approved the motions to hire King & Spalding and Paul Hastings.

AtheroGenics, of Alpharetta, develops pharmaceuticals used in the treatment of chronic inflammatory diseases, including diabetes and coronary heart disease. In regulatory filings, AtheroGenics has said that the company’s substantial debt burden has prevented it from developing its primary asset, AGI-1067, an inflammatory drug that has also been studied for the treatment of diabetes.

With the unprecedented upheaval in financial markets causing a near-lockdown in global credit markets, Deal Watch Blog called Chris Molen, a partner with Paul, Hastings, Janofsky & Walker in Atlanta, to discuss how the chaos on Wall Street is affecting corporate borrowers.

Molen advises clients on financing mergers and acquisitions, asset-based financing, cash flow lending, structured finance and restructuring senior debt financings. Molen’s clients have included Bank of America, Toronto-Dominion Bank, SunTrust Banks and Wells Fargo.

The conversation was edited for brevity and clarity.

Various news reports have said that the global credit markets have virtually locked down. Can you comment on what you’re seeing in the market—who can find financing and what lenders are providing credit right now?

The AAA investment-grade type companies can still find financing. I’m talking about long-term credit facilities of one year to five years, term loans of one year to seven years, your traditional corporate loans. Probably there are solid [privately held] companies with a long track record and who have a relationship with their lender; they may be able to find some financing.

What the big banks’ philosophy is right now is that the deal has got to be really solid from a credit perspective. A deal has also got to have the prospect for other fee opportunities—providing advice on future bond issues, or cash management, some other kind of fee income. A bank wants a customer whose credit is beyond reproach and for whom they might be able to pick up other fee-earning opportunities.

A couple of years ago, even five years ago, there was plenty of money chasing deals. Lenders—banks, hedge funds, others—were quite happy to simply make loans and not worry about other fee income. That’s not the case now.

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Coca-Cola Co.’s multibillion-dollar pact to acquire China Huiyuan Juice Group Ltd. may hold significance beyond its potential for expanding Coke’s reach in the world’s biggest nation.

It could also be the first-ever acquisition of a Chinese company by a foreign entity to be reviewed pursuant to China’s anti-monopoly law that went into effect in August 2008, according to Paul, Hastings, Janofsky & Walker corporate partner Maurice Hoo in Hong Kong.

The novelty of the deal notwithstanding, Hoo and Morris, Manning & Martin partner Tim Xia in Atlanta both said they expect Coca-Cola to receive approval for the deal from Chinese antitrust regulators.

Coca-Cola announced on Wednesday that it would pay $2.4 billion to buy the maker of Huiyuan brand juice. Two sources offered differing opinions on the extent to which the would expand Coca-Cola’s market share. Bloomberg News said, citing Euromonitor, said Coca-Cola’s share of the Chinese fruit and vegetable juice market from about 10 percent to about 20 percent. But Merrill Lynch research analyst Christine Lee said Coca-Cola’s share of the Chinese juice market would grow from 28 percent to 37 percent.

No matter the size of Coca-Cola’s market share, officials with the Ministry of Commerce of the People’s Republic of China want to level the playing field between Chinese and foreign companies in the M&A market, Hoo said.

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