cec6dad1d4a4463d8a5a99a22d941ea5 90 2009-11-20T15:04:00-06:00

Precision motion device and laser developer GSI Group Inc. has filed for Chapter 11 protection, saying it has finalized an agreement with a majority of its noteholders on a restructuring plan that will exchange much of its debt for equity in the reorganized company. GSI and subsidiaries GSI Group Corp. and MES International Inc. filed a Chapter 11 petition on Friday in the U.S. Bankruptcy Court for the District of Delaware, listing assets of $555 million and debt of $370 million. No other GSI subsidiaries were included in the filing. The company and more than 70 percent of its noteholders reached agreement in May to restructure its outstanding obligations, as well as certain subsidiaries' outstanding obligations, under 11 percent senior notes issued by GSI Group Corp., according to the petition. It is in the best interests of the company to file for Chapter 11 relief to consummate the reorganization, the petition said. Under the terms of the agreement, the company will exchange its $210 million principal amount of 11 percent senior notes for a new $95 million secured loan due August 2014, as well as common stock representing approximately 74.3 percent of the company’s post-consummation equity ownership, GSI said in a statement. Funds affiliated with Goldman Sachs Asset Management, Tennenbaum Capital Partners LLC and Highbridge Capital Management LLC are expected to own the majority of the equity in the reorganized company, GSI said. After the restructuring plan is consummated, the company’s interest cost will be significantly reduced, it said. The company said in its petition that it is proposing to execute and file a joint plan of reorganization and disclosure statement under which the company would issue $104.1 million in 12.25 percent senior secured notes, and issue warrants to purchase common shares of the company. In the statement, GSI said that as part of the restructuring plan, an affiliated creditor would receive about 7.1 percent of the company’s post-consummation outstanding shares and certain other consideration, and existing shareholders would receive 18.6 percent of the post-consummation outstanding shares and receive warrants to purchase some of the other outstanding shares. The company said its operating subsidiaries will continue to pay all vendors, suppliers, employees and other obligations in the ordinary course of business. “While GSI’s debt has to be restructured as a result of the protracted economic downturn, the company remains operationally strong with adequate cash on hand to meet its operational needs,” GSI CEO Sergio Edelstein said in a statement. “We are confident that going into this reorganization process with a pre-agreed upon plan with our noteholders and adequate liquidity will enable us to implement our restructuring in an efficient and timely manner,” he said. The debtors are represented by Saul Ewing LLP and by Brown Rudnick LLP. The case is In re: GSI Group Inc., case number 09-14110, in the U.S. Bankruptcy Court for the District of Delaware.

135419 0 0 2009/12/20 00:00 GSI Group Files For Ch. 11, Pre-Planned Reorganization Friday, Nov 20, 2009 2009/11/20 2009/11/20 100 2009/11/20 1

f21ad43386c149188b0b01fb080e59ec 101 2009-11-20T14:30:00-06:00

Retalix Ltd. has quickly snuffed a putative shareholder class action accusing the software company and its directors of agreeing to a lopsided $32.9 million share purchase agreement with a group of investors. The company, a leading provider of point of sale software for retailers, announced Thursday that the plaintiff agreed to dismiss the case that had tried to block the strategic financing transaction, which has now been consummated. The plaintiff asked Judge Richard A. Schell of the U.S. District court for the Eastern District of Texas to dismiss the class action complaint roughly a month after accusing Retalix of selling shareholders downriver when granting investors a stock purchase price well below market values. Rather than respond to the defendants' attempt earlier in November to dismiss the lawsuit for lack of jurisdiction, the plaintiff agreed to dismiss the case outright without prejudice as long as Retalix refrained from seeking costs or sanctions, according to the stipulation. Neither the plaintiff nor plaintiff’s counsel are receiving any consideration whatsoever in connection with the dismissal, the stipulation said. While Retalix has a U.S. subsidiary, the company argued that the suit could not survive dismissal because it strictly concerned parties and transactions based in Israel. The suit claimed that Retalix officers and directors breached their fiduciary duty and failed maximize shareholder value when agreeing to a $9.10 purchase price even though the stock has consistently traded above $12 per share. Notably, Oppenheimer & Co. Inc., the company’s own financial adviser on the deal, concluded that Retalix could get as much as $15 per share from investors seeking a 20 percent equity stake in the company, according to the complaint. “The proposed agreement is wrongful, unfair and harmful to the company’s public stockholders, and represents an effort by defendants to aggrandize their own financial position and interests at the expense of and to the detriment of class members,” the complaint said. The action also accused the company founders of self-dealing because they had arranged to sell their stock at $12 per share, a good 32 percent greater than the price tendered to shareholders. Attorneys for the plaintiff could not be reached for comment Friday. In October, Retalix shareholders overwhelmingly approved the financing transaction, which provides an aggregate $32.9 million for the company in exchange for 17.7 percent of the outstanding share capital and warrants for additional purchases. The so-called Alpha investor group also acquired stock from one of the company’s founders, upping their ownership to 20 percent of the outstanding shares. The plaintiff is represented by Hubbard & Biederman LLP. Retalix is represented by Katten Muchin Rosenman LLP and Kane Russell Coleman & Logan PC. The case is Tamar v Retalix Ltd. et al., case number 4:09-cv-00511, in the U.S. District Court for the Eastern District of Texas.

135379 0 0 2009/12/20 00:00 Retalix Downs Investor Suit, Closes $33M Equity Deal Friday, Nov 20, 2009 2009/11/20 2009/11/20 74 2009/11/20 1

2ecf65d7496a4764b9e71309ae7f5e30 101 2009-11-20T12:59:00-06:00

RealNetworks Inc. and MTV Networks have opened talks that could see the U.S. digital media company give up its majority stake in online music seller Rhapsody.com to the company best known as the first music video channel. According to an 8-K filing with the U.S. Securities and Exchange Commission on Thursday, Real, which has a 51 percent stake in Rhapsody, recently opened negotiations with MTV about reducing its stake in the joint venture. The negotiations could result in both MTV, a unit of multimedia giant Viacom Inc., and Real each holding 50 percent stakes in Rhapsody, or Real could hold “slightly less” than 50 percent of the venture as a result of the renegotiation of the joint venture, the filing said. The goal, Real said, is to provide more autonomy to the digital music service, once seen as a potential rival to Apple Inc.’s iTunes. “These negotiations are focused on a potential restructuring of RealNetworks' and MTVN's relative economic rights in the joint venture and on their relative abilities to exercise control over decision-making to enable Rhapsody to operate more independently of either party,” the 8-K filing said. Talks are in their preliminary stages, and Real said that it could not predict whether they would result in an agreement, or what effect such an agreement would have on the Seattle-based company’s bottom line. RealNetworks spokesman Ryan Luckin said that the company filed its Thursday 8-K in conjunction with a stock option tender offer to its employees. Luckin could not comment on whether the tender offer was in any way linked to the negotiations on the Rhapsody joint venture, and added that the talks were at a very early stage. MTV Networks could not be reached for comment. The law firms working on the deal, if any, were not available by the time of publication. The two companies launched Rhapsody in 2007 with the aim of taking on the iTunes behemoth. MTV pumped $230 million into Rhapsody in August 2007, merging its existing Urge music retail operation into Rhapsody to create a new company, Rhapsody America. The online music retailer was among the first to offer unlimited music downloads for flat monthly fees. Rhapsody also entered into deals with Verizon Wireless Inc. and other mobile phone, television and Internet companies to offer a wider range of services. According to reports, Rhapsody is currently in talks with Google on developing a new music search capability and has recently created applications for Apple’s hugely popular iPhone. But Rhapsody has failed to put much of a dent into iTunes, which still controls around 70 percent of the online music market. Rhapsody’s pricing structure has also come under legal assault. In late June, a group of music licensing companies, including licensing agent MCS Music America Inc., filed a complaint against RealNetworks, Yahoo Inc. and Microsoft Corp., alleging that the companies did not obtain song copyrights before allowing the music to be streamed to customers through Rhapsody, YahooMusic.com and Microsoft’s Zune.com. Through the services, the technology companies have allowed customers to listen to entire sound recordings on demand, as well as obtain access to unlimited numbers of songs through subscription plans, the complaint claims. The Rhapsody software has also been subject to a number of patent fights. --Additional reporting by Christie Smythe

135398 0 0 2009/12/20 00:00 MTV Eyes RealNetworks' Majority Stake In Rhapsody Friday, Nov 20, 2009 2009/11/20 2009/11/20 74 2009/11/20 1

e403a6bec64d4efb8b9700d0dcb695ff 64 2009-11-20T12:11:00-06:00

Frank T. Cannone is chairman of the corporate department at Gibbons PC and is a member of the firm's executive committee. His practice is focused on corporate law, securities law, mergers and acquisitions, and private equity. Cannone has extensive experience representing clients in connection with public and private capital raising, private equity investments, mergers and acquisitions (in the middle market), venture capital transactions, cross border transactions, private fund formation, and distressed situations and opportunities. Q: What attracted you to your practice area? A: The opportunity to become a trusted advisor to corporations and business owners, in order to be in the position to counsel them on their most critical business situations. The ability of a business to properly and effectively address the legal aspects of its operations and plans is fundamental to it achieving a successful result and, of course, to being competitive in its marketplace. I wanted to be the person who served that role. Q: What is the most challenging deal you've worked on, and why? A: Representing a state pension fund in creating, structuring and implementing a multibillion-dollar alternative investment program. This matter required expertise in securities law, corporate law, tax, ERISA, state regulations, sovereign immunity and indemnifications requirements, and freedom of information regulations, as well as a solid understanding of the private investment marketplace. The multidisciplinary aspects of that role and the opportunity to successfully lead such an unusual and high-profile assignment was a legal challenge and professional milestone. Most importantly, the responsibility to ensure proper and successful implantation of the state investment program for the benefit of hundreds of thousands of state employees was a professional privilege. Q: What are the most challenging legal problems currently facing clients in your practice area? A: The ability to properly operate businesses and implement their business strategies during a fiscal and economic crisis with a changing regulatory framework. This is an unprecedented and hostile environment for business leaders as they are forced to make business decisions while facing constant and drastic changes in the marketplace and relevant legislation. Q: Where do you see the next wave of activity in your practice area coming from? A: Advising companies faced with distressed financial situations, and helping them to restructure their existing relationships with lenders, vendors, landlords, employees and other contracting parties. Q: Outside your own firm, name one lawyer who's impressed you and tell us why. A: Henry Sacco, chief legal counsel of Brother International Corporation. Henry is an excellent, intelligent, hard-working and diligent lawyer. As head of the Brother legal department, he services the legal needs of a multibillion-dollar international organization with thousands of employees. As a result, he must be proficient in multiple disciplines, from litigation, corporate, finance, and tax, to employment and intellectual property matters — to name just a few. He is able to proficiently and quickly assess complex legal situations and render effective decisions based on the facts at hand at the time without the benefit of hindsight. Moreover, when addressing the most critical matters, he must also coordinate and interface with senior executives in Japan. It is a significant and demanding position that he is able to perform seamlessly. Q: What advice would you give to a young lawyer interested in getting into your practice area? A: Chase the work and not the money. Work as many hours as possible to become an expert in your area of the law. In your professionally free time, read technical journals and articles to further refine and expand your legal expertise. Become an expert.

122767 0 0 2009/10/16 00:00 Q&A With Gibbons' Frank Cannone Friday, Nov 20, 2009 2009/09/16 2009/09/16 74 2009/11/20 1

The next wave in corporate finance law will be advising companies faced with distressed financial situations, and helping them to restructure their existing relationships with lenders, vendors, landlords, employees and other contracting parties, says Frank T. Cannone, chair of the corporate department at Gibbons PC.

93c636e0d39e4474bfd0b7ae02b1d96b 50 90 2009-11-19T17:39:00-06:00

Semiconductor maker Semtech Corp. has agreed to buy rival Sierra Monolithics Inc. for $180 million in cash, in an effort to increase its exposure to the telecommunications and defense markets. The cash deal will see Semtech, publicly held since 1967, swallow up the more junior, quickly growing SMI, a company founded in 1986 that currently employs 110 workers, Semtech said in a statement Wednesday. Privately held SMI has grown revenue at a compound annual growth rate of over 40 percent over the past five years, Semtech said. SMI supplies most major telecommunications equipment manufacturers with chip sets, as well as the military, according to Semtech. Semtech expects SMI to generate $50 million in revenue for calendar year 2009, with margins approaching 60 percent, it said. Semtech intends to use SMI to broaden its exposure in those markets and add an additional revenue stream, it said. SMI's revenue will likely grow between 20 percent and 30 percent in fiscal year 2010, Semtech said. Under the terms of the agreement, Semtech will pay SMI stockholders $180 million in cash at the closing of the deal, which the company will get from its existing cash reserves. In addition, Semtech will also assume the existing unvested options of SMI's employees, which are valued at about $8 million. Semtech will also place $18 million in escrow for 12 months in order to cover any indemnifiable claims. The company expects to incur a one-time tax liability of $33 million in the third quarter of fiscal year 2010, it said. The acquisition will be accretive to its earnings per share — calculated using generally accepted accounting principles — within 12 months of close, Semtech said. The closing of the deal remains subject to closing conditions, including termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period. “We are extremely excited to have Sierra Monolithics become a part of Semtech,” Semtech CEO Mohan Maheswaran said. “Sierra Monolithics has the benefit of over 20 years of innovation, design and commercialization of high-performance analog [integrated circuits] and solutions and brings to Semtech a world-class engineering team.” “Together we are well positioned to capitalize on some of the fastest growing market segments in the communications and industrial segments,” Maheswaran said. “We are thrilled to be joining the Semtech team, an excellent fit both geographically and culturally,” said Charles Harper, SMI's chairman. “Our respective product portfolios and customer bases are extremely complementary, and Semtech’s scale and resources enable Sierra Monolithics to fully realize and expand the long-term value of our team and technology,” Harper said. Both based in California, the companies provide semiconductors and integrated circuit solutions for use in communications, computing, engineering and defense. Paul Hastings Janofsky & Walker LLP represents Semtech in the deal. Morrison & Foerster LLP represents SMI in the deal.

135297 0 0 2009/12/19 00:00 Semtech To Buy Sierra Monolithics For $180M In Cash Thursday, Nov 19, 2009 2009/11/19 2009/11/19 89 2009/11/19 1

Semiconductor maker Semtech Corp. has agreed to buy rival Sierra Monolithics Inc. for $180 million in cash, in an effort to increase its exposure to the telecommunications and defense markets.

2392d3e06a574669a3cf06367d892c2d 101 2009-11-19T17:31:00-06:00

Japanese chemical firm Mitsubishi Chemical Holdings Corp. has announced plans to acquire Mitsubishi Rayon Co. in a deal potentially valued as high as $2.4 billion, seeking to create a leading global chemical producer to take on growing competition. The companies announced the merger agreement on Thursday, stating that they planned to conduct the deal either through a tender offer or stock swap, depending on investor response. The goal of the deal is to make Mitsubishi Rayon a wholly owned subsidiary of Mitsubishi Chemical, the companies said. Mitsubishi Chemical Holdings said it plans to initiate the tender offer, at a price of 380 yen ($4.27) per share, starting at the beginning of February 2010. The companies plan to complete the tender offer by the end of March 2010. The transaction is subject to review by antitrust authorities in Japan and elsewhere. If they are unable to solicit enough shares, they will initiate a stock swap deal, the chemical firms said. At the tender offer price, the transaction would be valued at about $2.4 million, based on a reported 572,226,048 shares of Mitsubishi Rayon that would be subject to the transaction, the companies said. The combined companies would have revenues of about 3.25 trillion yen per year, or about $36.5 billion million dollars, establishing the company as one of the top 10 chemical producers in the world, the Wall Street Journal reported. Currently, Mitsubishi Chemical, a holding company, has three core business subsidiaries, including Mitsubishi Chemical Corp., Mitsubishi Plastics Inc. and Mitsubishi Tanabe Pharma Corp., the company said. The company carries out production in three main areas: performance products, health care and general chemicals.. Meanwhile, Mitsubishi Rayon, which is not currently affiliated with Mitsubishi Chemical, produces primarily acrylic fibers, carbon fiber and composite materials, acetate fibers and membranes, and other related products, the companies said. The merger comes at a time when chemical companies throughout the world are experiencing problems including declining damage and falling product prices, as well as volatile movements for crude oil and other chemical input materials. Mitsubishi Chemical said that Japanese companies, in particular, also face increasing competition from Chinese and Middle Eastern firms, which boast strong competitiveness in commodity chemicals markets. The recession has inflicted significant financial damage on a number of major chemical firms, some of which have been forced to file for bankruptcy protection within the past year. Such companies include Lyondell Chemical Co., Chemtura Corp. and Tronox Inc. Huntsman Corp., a stalking horse bidder, is in the midst of attempting to close on a proposed $415 million acquisition of bankrupt Tronox’s assets following a recent expiration of the U.S. antitrust waiting period on the deal — although some objecting parties have disputed the sale and contended that the bid is too low. Chemtura, meanwhile, is attempting to shed tens of millions of dollars of environmental liabilities as it seeks to restructure under Chapter 11 protection. The Lyondell bankruptcy has been rife with disputes, with the U.S. trustee and the official committee of unsecured creditors calling for an investigation into investor Leonard Blavatnik, who orchestrated a leveraged buyout of Lyondell which the creditors have said left the company financially crippled. --Additional reporting by Melissa Lipman, James Armstrong, Pete Brush, and Tina Peng

135294 0 0 2009/12/19 00:00 Japanese Chemical Firms Announce $2B Merger Thursday, Nov 19, 2009 2009/11/19 2009/11/19 73 2009/11/19 1

14b48db896cc470fb899343d4b770589 47 2009-11-19T17:13:00-06:00

Following reports of the U.S. Department of Justice's qualms over the proposed $2.5 billion merger of Ticketmaster Entertainment Inc. and Live Nation Inc., several industry and consumer groups on Thursday attacked the deal as a "disaster" for ticket buyers, warning that suggested remedies would do little to improve the situation. The groups — including the National Association of Ticket Brokers, the National Consumers League, the Consumer Federation of America, Consumer Action and Knowledge Ecology International — urged the agency to take advantage of its "unique opportunity to protect consumers" by blocking the merger. Pointing to congressional hearings over the merger and the "unprecedented" 50 members of Congress who have written to the Justice Department citing worries over the combination, the groups said "little dispute" exists that the merger "raises very profound competitive concerns." “Ticketmaster is well aware that their plans will give them unchecked power to take advantage of consumers who will have no other ticket options," the groups said in a statement. The industry and consumer representatives further warned against many of the proposed competition remedies that have circulated in print reports over the last month, noting that spinning off a "modest" chunk of the business would not do enough to protect ticket buyers. The groups also frowned on the possibility of Comcast Corp.'s Philadelphia-based arena management company buying some software and contracts as an alternative to blocking the merger outright, an option Bloomberg reported on Tuesday. NATB and the other groups argued that even "bringing more corporate interests to the table" wouldn't stop the combined company from maintaining "full control over tickets, venues, artists and prices." The deal would give Ticketmaster "unprecedented control" over the entirety of the live music industry, including artist management, concert promotion, concessions and ticket distribution, making "transparency and accountability impossible," the groups said. The merger also would stop new companies from entering the market to compete with the ticketing giant, according to the statement. "Ticketmaster may also propose to agree to some type of limits on their behavior post-merger, but for a firm that exploits consumers on a daily basis, those promises are simply not credible," the groups said. Though the agency and the companies remain in negotiations over the federal investigation, which dates back to mid-February, Justice Department officials have suggested that it might go to court to prevent the merger, the Wall Street Journal reported in mid-October, citing unnamed sources familiar with the probe. While the companies still could offer remedies to the Justice Department, legal experts suggested Nov. 13 that there may be little the pair could do to alleviate any concerns relating to the horizontal aspect of the merger. After a 10-year partnership, Ticketmaster stopped providing ticketing services to Live Nation, leading Live Nation to decide just two months before the merger announcement to begin selling its own tickets to events at its venues. Live Nation — the world's largest concert producer — sells more than 45 million tickets a year for more than 16,000 concerts, while Ticketmaster, which sold 141 million tickets in 2007, has largely dominated the primary ticket seller market since acquiring rival Ticketron in 1991.

135245 0 0 2009/12/19 00:00 Industry, Consumer Groups Decry Ticketmaster Deal Thursday, Nov 19, 2009 2009/11/19 2009/11/19 89 2009/11/19 1

5de2580732c14cc9b776f59f2528403e 101 2009-11-19T15:28:00-06:00

JPMorgan Chase & Co. has agreed to pay £1 billion ($1.7 billion) to buy Cazenove Group Ltd. out of its half-stake in the companies' joint venture investment banking operations in the United Kingdom, which would give the financial giant complete ownership of the nearly 200-year-old brokerage. The deal — a stock acquisition that values Cazenove's shares at £5.35 ($8.90) each — will make JPMorgan Cazenove a wholly owned part of the New York-based banking giant, the companies announced Thursday. The move to acquire the rest of the U.K. company marks the completion of the transaction the two investment banks began in early 2005, when they formed a joint venture between JPMorgan's British investment banking operations — valued at £300 million ($159 million) — and Cazenove. JPMorgan also paid £159 million ($265 million) in cash for its 50.01 percent stake in the joint venture. That agreement contained a call option allowing JPMorgan to buy out the rest of the investment bank, while Cazenove had a put option over the New York bank's share of the company. Neither could exercise its option before 2010. The joint venture's chairman David Mayhew called the combination "a great success” that "benefit[ed] our clients, our shareholders and our people." "The agreement we have reached is a natural extension of our relationship," Mayhew said. "It builds on what we have achieved in the past five years and provides a platform for the next stage of development." Under the latest agreement, the joint venture will continue to operate as JPMorgan Cazenove with an implied value of £2 billion ($3.33 billion). Ordinary Cazenove shareholders will receive £5.10 ($8.49) when the deal closes — which the companies expect to happen in early 2010 — plus a dividend of 25 pence (42 cents) in December. The companies said the deal would keep "continuity" in the roles of the joint venture's key employees, with the investment bank's top executives continuing their roles at the company. The joint venture's corporate finance arm has already been running "closely and successfully" with JPMorgan in the U.K., meaning little should change for the unit. The cash equities business will see more changes, as the Cazenove unit has remained separate from JPMorgan until now, according to the announcement. After the deal closes, JPMorgan plans to merge the Cazenove cash equities and research businesses with the bank's current operations in Europe, the Middle East and Asia under the joint venture's brand. JPMorgan Cazenove CEO Naguib Kheraj vowed that the business "will remain fundamentally unchanged" for the company's corporate clients, while the merger of the institutional equities units will let the company "improve and broaden [its] service to clients." The deal still requires approval from Cazenove's shareholders. Cazenove's directors, on the advice of Lazard & Co. Ltd., have unanimously urged shareholders to support the transaction. The law firms working on this deal, if any, could not be identified by the time of publication.

135133 0 0 2009/12/19 00:00 JPMorgan To Pay $1.7B For Cazenove Stake In UK Outfit Thursday, Nov 19, 2009 2009/11/19 2009/11/19 74 2009/11/19 1

f37cbaa50c0749cd8a915cd2e096975d 101 2009-11-19T15:15:00-06:00

The Blackstone Group's Pinnacle Foods Group LLC has reached a definitive agreement to purchase frozen food giant Birds Eye Foods Inc. for $1.3 billion. Pinnacle, the maker of Duncan Hines frosting and Mrs. Butterworth's syrup, announced the proposed deal on Thursday, marking the latest major purchase for Blackstone since the private equity firm reached a definitive agreement last month to buy Anheuser-Busch InBev's U.S. theme parks for up to $2.7 billion. The New Jersey-based Pinnacle said the deal, which halts Birds Eye's plans for a public stock offering, would be funded with a combination of new debt financing and new equity from New York-based Blackstone. Barclays Capital, Credit Suisse, BofA Merrill Lynch, HSBC and Macquarie Capital will provide the debt financing, through a mixture of senior secured credit and senior unsecured bonds, Pinnacle said. The transaction is expected to close by the first quarter of 2010, subject to regulatory approval. Pinnacle CEO Bob Gamgort said Rochester, N.Y.-based Birds Eye, which recorded $935 million in sales in the fiscal year ending June 27, would strengthen Pinnacle's financial position. “This compelling combination creates a leader in both the frozen and shelf stable business segments and enables us to better serve our consumers and customers,” Gamgort said. Birds Eye is owned by a holding company controlled by buyout firm Vestar Capital Partners, New York agricultural cooperative Pro-Fac Cooperate Inc. and Birds Eye management. The company will now withdraw its registration statement related to a proposed initial public offering, filed with the U.S. Securities and Exchange Commission on Oct. 8. Blackstone's senior managing director Prakash Melwani said the deal would create an “attractive, diversified food company with significant scale.” “We look forward to continuing our support of Pinnacle Foods as it grows organically and via acquisitions,” Melwani said. Blackstone reached an agreement to acquire Busch Entertainment Corp. from AB InBev in October. The beer giant said Blackstone would acquire the theme park operator for a closing cash payment of $2.3 billion and a right to participate in the return on its initial investment, capped at $400 million. Simpson Thacher & Bartlett LLP is advising Pinnacle Foods in the transaction. Kirkland & Ellis LLP is serving as counsel to Birds Eye Foods.

135132 0 0 2009/12/19 00:00 Blackstone's Pinnacle To Buy Birds Eye For $1.3B Thursday, Nov 19, 2009 2009/11/19 2009/11/19 50 2009/11/19 1

The Blackstone Group's Pinnacle Foods Group LLC has reached a definitive agreement to purchase frozen food giant Birds Eye Foods Inc. for $1.3 billion.

4b4ff24036f7413ea28ca6d955c4976b 34 2009-11-19T15:10:00-06:00

Bankrupt mall operator General Growth Properties Inc. has struck a deal to restructure $8.9 billion in mortgage loans on 70 properties that it hopes to remove from bankruptcy by the end of the year, while rival Simon Property Group Inc. is considering a bid for GGP's assets. Under the restructuring agreement, which must first be approved by the U.S. Bankruptcy Court for the Southern District of New York, the maturity dates of all the loans will be pushed back, GGP said Thursday. The average maturity date, weighted by the size of the loans, is now in 2016, according to the company. The restructured loans have an all-in-interest rate after amortization of fees of 5.54 percent, the company said. GGP said it plans to use the agreement as a starting point for negotiating a similar restructuring of its remaining $6 billion of secured mortgage debt. "We are extremely pleased to reach this consensual agreement with lenders representing more than half of the mortgage debt covered by the bankruptcy proceedings," said GGP president Thomas H. Nolan Jr. "We are working with the unsecured creditors committee, the equity committee and other constituents to resolve the restructuring of our corporate level debt and equity and believe that these agreements with our mortgage lenders represent an important step toward establishing a long-term capital structure for GGP." The restructuring of mortgage debt associated with some of the properties will also need the approval of certain Class B noteholders, according to GGP. GGP's bankruptcy may encounter a new twist in the form of a bid from Simon, the only mall operator in the country larger than GGP. The company has hired Lazard Ltd. and Wachtell Lipton Rosen & Katz to help it consider making a bid for GGP's assets, Simon spokesman Les Morris said Thursday. Morris declined to comment on the specifics of the possible bid. The Wall Street Journal reported Thursday that it could range from $25 billion to $30 billion, citing an anonymous source. GGP and about 160 of its more than 200 U.S. malls filed voluntary petitions for bankruptcy on April 16, listing $29.6 billion in assets and more than $27 billion in liabilities as of Dec. 31, 2008. Less than a week later, 28 more of the mall giant's properties and affiliated entities filed Chapter 11 petitions. GGP also owns several commercial office buildings and five large planned communities. The debtors are represented by Weil Gotshal & Manges LLP and Kirkland & Ellis LLP. The case is In re: General Growth Properties Inc. et al., case number 09-11977, in the U.S. District Court for the Southern District of New York.

135260 0 0 2009/12/19 00:00 GGP To Restructure $8.9B Debts; Rival Mulls Bid Thursday, Nov 19, 2009 2009/11/19 2009/11/19 100 2009/11/19 1

37a80b32936d4419b282ac6858e299af 50 80 2009-11-19T14:41:00-06:00

Two Israeli businessmen suing SanDisk Corp. in the wake of an acquisition gone sour have accused the flash memory manufacturer of erasing computer data that should have been “central evidence” in the case. Plaintiffs Dan Harkabi and Gidon Elazar filed a motion Wednesday in the U.S. District Court for the Southern District of New York to impose terminating sanctions on the company, arguing that SanDisk should be punished for spoliation that, if not willful, at least amounts to “gross negligence.” The two sued SanDisk in September 2008 after it failed to pay them a $4 million earn out they were allegedly owed in connection with SanDisk's acquisition of their company MDRM Inc. SanDisk paid $10 million for MDRM in 2004 to gain access to a pioneering digital rights management technology for flash drives, according to the plaintiffs, and Karkabi and Elazar joined SanDisk as employees as part of the acquisition. Beyond the cash up front, the deal included a $4 million earn out should SanDisk incorporate the technology or derivatives into later products, and sell at least 3.2 million units of those products, the plaintiffs contend. Later fired amid disagreements about the earn out, the two returned their company-issued laptop computers to SanDisk, including all files and other data that documented SanDisk's early agreement to pay, according to the plaintiffs. Despite a litigation hold, SanDisk computer technicians wiped the laptops and issued them to other employees, according to Wednesday's motion, and backups SanDisk said it made could not be found. E-mail production also came up short, the plaintiffs claim. Despite its 1 million-page document production that included thousands of e-mails from other SanDisk employees, the company failed to produce certain e-mails the plaintiffs had sent to each other and to themselves, the motion contends. Together, the data wipe and e-mail production shortfall amounts to an “egregious” failure, the plaintiffs argue. “SanDisk is a self-professed 'internationally recognized authority on nonvolatile memory technology,'” the motion said. “Yet, its own employees were unable to backup two laptop hard drives. SanDisk is in the business of making sure data storage is handled properly, and, as a result, its failure to do so in a lawsuit against it is made more egregious,” it said. The data on the hard disks and e-mails would point to SanDisk's early agreement to pay, the plaintiffs claim. SanDisk executives indicated early on they would pay, according to the plaintiffs. In a 2006 meeting attended by SanDisk's CEO and several vice presidents, the vice president of business development agreed to “get a check cut,” according to the motion. At that meeting, however, the plaintiffs also had an impromptu conversation with the CEO over unrelated problems with the product, according to the motion. The CEO later chewed out an engineering vice president over the problems, and two weeks later, the SanDisk deal began to unravel, the plaintiffs argue. The plaintiffs claim their technology ended up in SanDisk's Cruzer Freedom and U3 series of flash drives, which sold enough units to exceed the earn out threshold by at least five times. The plaintiffs have asked for summary judgment in their favor, or barring that, an adverse inference against SanDisk. A SanDisk attorney did not immediately respond to a request for comment. Stillman Friedman & Shechtman PC represents the plaintiffs. O'Melveny & Myers LLP represents SanDisk. The case is Harkabi et al. v. SanDisk Corp., case number 08-cv-08203, in the U.S. District Court for the Southern District of New York.

135155 0 0 2009/12/19 00:00 SanDisk Accused Of Spoliation In Earnout Suit Thursday, Nov 19, 2009 2009/11/19 2009/11/19 89 2009/11/19 1

59fe313da9614f7981c96589af236be7 101 2009-11-19T14:24:00-06:00

Willis Group Holdings Ltd. has struck a deal to shift a portion of its ownership stake in leading French insurance broker Gras Savoye & Cie to private equity firm Astorg Parters as part of a $700 million leveraged buyout transaction, giving Willis access to $160 million in cash and breathing room in its balance sheet. The companies on Wednesday announced the deal, in which Willis, Astorg and original family shareholders of Gras Savoye will each own stakes of roughly one-third in a new holding company set up to own the French brokerage firm. Management of the French broker will also have a small stake in the new company, the companies said. Willis CEO and chairman Joseph Plumeri said in a conference call with investors Wednesday that the transaction will save Willis from having to shell out as much as $348 million through 2011 under a previous agreement to buy out the stake held by the Gras Savoye family shareholders. If the put option agreement had not been canceled, the result would have been “difficult to swallow” for Willis, which is currently trying to restructure its balance sheet by bringing down its ratio of debt to earnings before interest, taxes, depreciation and amortization, a commonly used earnings metric, according to Plumeri. The additional cash provided for Willis from the transaction will allow the company to pay down debt in pursuit of its goal of lowering that ratio, he said. Willis will now have the option to buy 100 percent of the capital in the new holding company for Gras Savoye in 2015, according to the companies. Plumeri said he expected the transaction to close by the end of the year. Previously, Willis held 48.6 percent of the voting rights in the French brokerage, with the family shareholders owning 51.4 percent of the voting shares, the companies said. Astorg made for a natural equity partner in Gras Savoye because it is also based in France and is knowledgeable about the marketplace, Plumeri said. Going forward, Gras Savoye will continue to be a strong investment for Willis, he said, as it is the top insurance broker in France and has access to a number of markets in which Willis does not already do business. “Willis looks forward to building on the strong and valuable relationship we have established with Gras Savoye over the past 12 years, and we remain fully committed to our partnership,” Plumeri said in a statement. “This new arrangement enhances Willis’ financial flexibility, while at the same time, engaging an important new strategic partner in its Gras Savoye investment.” Christian Couturier, a partner in Astorg, said that the private equity firm was “delighted that the family shareholders and Willis have chosen to partner with Astorg for this new step in the development of Gras Savoye.” The leadership of the company and “the personal investment of a large number of Gras Savoye managers and employees, the support of Willis, as well as Astorg’s track record as a proactive shareholder in family companies, create the conditions for success in the next five years,” Couturier said. Willis is a leading global insurance broker, providing insurance, reinsurance, risk management, financial and human resources consulting, as well as actuarial services to corporations, public entities and other institutions, according to the company. In addition to being the largest insurance broker in France, Gras Savoye is the ninth-largest broker in the world, offering access to a variety of insurance products, including property, liability, builder’s risks, employee benefit and niche products, the company said. Willis and the family shareholders of Gras Savoye were represented by Mayer, Brown, Rowe & Maw LLP and Gide Loyrette Nouel. Astorg was represented by SJ Berwin LLP and Darrois Villey Maillot Brochier. Individual attorney names could not be identified in time for publication.

135137 0 0 2009/12/19 00:00 Willis Nets Needed Cash In $700M Gras Savoye LBO Thursday, Nov 19, 2009 2009/11/19 2009/11/19 65 2009/11/19 1

7b5e4a8ccdbd4d539906e7b818273446 90 2009-11-19T13:10:00-06:00

The European Union's antitrust watchdog has given its blessing to Avaya Inc.'s proposed $915 million purchase of bankrupt Nortel Networks Corp.'s enterprise solutions business, following in the footsteps of the Federal Trade Commission and the Canadian Competition Bureau. The European Commission said Thursday that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it. The agency acknowledged that Avaya and Nortel's enterprise solutions business are both active in PBXs, which are telephone exchange systems that connect the internal telephones of a private organization's network to the public switched telephone network. They are also both active in contact centers, which are centralized locations that receive and transmit large volumes of requests by telephone, e-mail, live chat or other forms of communication. But the EC said the markets for PBXs and contact centers were very dynamic and were moving to Internet protocol-based technologies. “Post-merger, the combined entity would continue to face a number of strong and effective competitors giving customers the choice from a range of alternative providers for PBXs and contact centers,” the EC said. Before the deal becomes final, Avaya still needs approval from a few other jurisdictions around the world. A review also is taking place under the Investment Canada Act, which provides for the review of investments in Canada by non-Canadians to ensure benefit to Canadians. “Avaya expects to close the transaction in December 2009,” the Basking Ridge, N.J.-based telecommunications company said. Eight days ago, Avaya announced that the FTC had granted it early termination of the antitrust waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The company also said it received a no-action letter from the Canadian Competition Bureau indicating that there were no grounds to challenge the transaction. The deal previously was approved by bankruptcy courts in both the United States and Canada. Avaya won its bid to acquire Nortel's enterprise solutions business this September in exchange for $900 million in cash and an additional $15 million for a staff retention program. For its part, Nortel — a Canadian company that manufactures equipment and systems in optical, wireless and voice technologies — has been shedding assets since it filed for Chapter 11 in January. Last month, for example, communications equipment supplier Ciena Corp. said it would pay $390 million in cash and about $131 million in stock to acquire Nortel's optical networking and carrier Ethernet assets. Prior to that, Nortel sold its business segment to Radware Ltd. for about $14 million, along with a breakup fee of $650,000 and as much as $400,000 in out-of-pocket fees and expenses. It also reached a $1.13 billion deal with Telefonaktiebolaget LM Ericsson for its wireless infrastructure business. The U.S. bankruptcy case is In re: Nortel Networks International Inc., case number 09-10138, in the U.S. Bankruptcy Court for the District of Delaware.

135162 0 0 2009/12/19 00:00 EU Signs Off On Avaya-Nortel Deal Thursday, Nov 19, 2009 2009/11/19 2009/11/19 50 2009/11/19 1

2d1b15c83cd94ad49ac027529f664f0c 101 2009-11-19T13:08:00-06:00

Conseco Inc. said on Thursday that it will offer up common stock worth roughly $230 million as the insurance company looks to pay down its debt in the wake of financial losses. Half the funds generated from the offering, which totals about 43.4 million shares based on Tuesday's stock price, will help pay down debt under Conseco's senior credit agreement, with the remainder going toward general corporate purposes, according to a prospectus filed with the U.S. Securities and Exchange Commission. Based in Carmel, Ind., Conseco had $1.27 billion in debt as of Sept. 30, the filing said. The insurer has undertaken efforts in recent weeks to refinance its existing debentures and pay down the senior credit agreement, which is responsible for more than $854 million of Conseco's outstanding debt, according to the prospectus. In a flurry of activity on Nov. 13, Conseco announced the close of a stock offer to a Portland, Ore.-based investment fund, issued a debenture offering worth more than $176 million and settled a tender offer for convertible debentures due in 2035, the company said. Investment firm Paulson & Co. Inc. agreed to buy up $77.9 million in Conseco stock in a deal that will turn over 16.4 million shares to several of its investment funds and accounts, with an option for Paulson to purchase up to 5 million additional shares as of June 2013, according to SEC filings. Together with shares Paulson purchased in the open market, the firm now owns 9.9 percent of the insurance company, the prospectus said. Conseco also completed a cash tender offer on Nov. 13 for $293 million in 3.5 percent convertible debentures due in 2035, according to the company. As of the deadline, $176.5 million of the principle had been tendered, Conseco said. On the same day, the insurer issued $176.5 million in 7 percent convertible senior debentures due in 2016 to Morgan Stanley & Co. Inc. to pay for the tender offer. Paulson bought up $120.5 million of the new debentures on Tuesday, while Morgan Stanley sold the remaining $56 million to other buyers, the prospectus said. Conseco used $36.8 million of the funds from the Paulson stock sale to pay down debt under the senior credit agreement, while $10.5 million went to cover expenses related to the tender offer, according to the company. Conseco said it also had acted on several reinsurance deals in a bid to improve “the capitalization of our life insurance subsidiaries and [serve] to offset the negative effects of the adverse economic and investment environment,” the prospectus said. A representative for the company declined to comment on the stock offering. Conseco, a holding company for a group of health, annuity and individual life insurers, focuses its business on the middle-income market, especially seniors, the company said. In the first three quarters of this year, Conseco said it brought in $3.3 billion in revenues and $67.5 million in net income. In the same period in 2008 the insurer announced $679 million in losses and revenues of $3.1 billion. Conseco had $3.3 billion in shareholders' equity and $30.3 billion in assets as of Sept. 30, the prospectus said. Simpson Thacher & Bartlett LLP is representing Conseco in the transaction. Individual attorneys working on the deal were not immediately available on Thursday.

135179 0 0 2009/12/19 00:00 Conseco To Offer $230M In Stock To Pay Down Debt Thursday, Nov 19, 2009 2009/11/19 2009/11/19 14 2009/11/19 1

Conseco Inc. said on Thursday that it will offer up common stock worth roughly $230 million as the insurance company looks to pay down its debt in the wake of financial losses.

0537d0e9e9f44cd488026f6fde3ec64b 101 2009-11-19T12:50:00-06:00

Manulife Financial Corp., Canada's largest life insurer, has announced plans to sell up to CA$2.5 billion ($2.37 billion) in common shares to finance future acquisitions and beef up its capital to “fortress” levels. The Toronto-based company said Wednesday the share offering — the second in a year — would inject the highest level of capital into the company since it went public. Manulife CEO Donald Guloien said the offering would securely position the insurer for the long term and would give the company “tremendous flexibility.” “We believe this transaction achieves the fortress level of capital necessary to buffer against more conservative economic scenarios and to position us to take advantage of highly attractive acquisition and growth opportunities,” Guloien said. “Our action today is consistent with Manulife's conservative approach to capital management,” he added. “Achieving these strong capital levels enables us to offer an even higher degree of security to present and future customers.” The purchase price of each share will be CA$19 ($17.80), and the offering — arranged by underwriters Scotia Capital Inc. and RBC Dominion Securities Inc. — is expected to close on or about Nov. 30, Manulife said. The estimated net proceeds from the offering will be approximately CA$2.4 billion ($2.25 billion) after underwriting fees and offering expenses, Manulife said, though the percentage of the offering proceeds to be invested directly in the company has not been determined. Following the offering, Manulife also plans to pay off approximately CA$1 billion ($940 million) in outstanding debt under its credit facility with Canadian chartered banks using other cash resources, the company said. In December 2008, the company sold CA$2.1 billion ($1.97 billion) in shares. The law firms working on the current deal, if any, could not be identified by the time of publication. The offering comes just two weeks after Manulife reported a net CA$172 million ($161 million) loss for the third quarter, the third loss in four quarters. In June, the company announced that the Ontario Securities Commission had slapped it with an enforcement notice related to its failure to disclose certain risks, according to an investor class action. That suit, filed in the U.S. District Court for the Southern District of New York on July 9, alleged Manulife neglected to hedge investments and disclose risks, spurring a precipitous drop in the value of its shares when the disclosure failures came to light. Named as individual defendants in the suit are former CEO Dominic D'Alessandro and former Chief Financial Officer Peter Rubenovitch. According to the complaint, the disclosure of the OSC enforcement notice sent the company's shares plummeting 12 percent on June 22. --Additional reporting by Erin Fuchs

135187 0 0 2009/12/19 00:00 Manulife Financial To Sell $2.37B In Stock Thursday, Nov 19, 2009 2009/11/19 2009/11/19 74 2009/11/19 1

8701500ed1ff440e80366b0cf946dad7 64 2009-11-19T11:46:00-06:00

Henry Hewitt is a partner at Stoel Rives LLP in the firm's Portland, Ore., office. He is the former chairman of the firm and leader of its business services group. Hewitt counsels public and private companies on general business matters, acquisitions, financings and corporate governance. During his career, he has been the principal adviser to the boards of several public and privately owned companies, including Tektronix, Fred Meyer, Electro Scientific Industries and PacifiCorp. Q: What attracted you to your practice area? A: I studied math and then economics in college and gravitated to business and tax courses in law school. I arrived at Stoel Rives (then Davies Biggs Strayer Stoel & Boley) intending to become a tax lawyer. As it turned out, others were doing most of the tax work and many of my early projects related to the application of federal and state securities laws to Oregon businesses. I became immersed in registration statements, periodic reports, proxy statements, private placements and everything related. Work on a merger proxy statement led to M&A transactions work. After a few years, I realized that I had become a corporate finance and M&A lawyer. Q: What is the most challenging deal you've worked on, and why? A: The acquisition of our client Fred Meyer Inc. in a leveraged buyout by KKR. Fred Meyer was a public company and the first consideration of the transaction by its board of directors was a hostile “bear hug” from KKR. At that time, the stock of Fred Meyer was trading at about $26 a share. The first two proposals ($35 and $45 a share) were rejected by the board as inadequate. Following the second rejection, two board members who were also two of the executors of the estate of the founder of the company (Fred G. Meyer) sued to force the board to accept the $45 offer. Every aspect of the transaction and the controversy became a big event in the press. After months of acrimony and negotiation, the Fred Meyer board agreed to a transaction at $55 a share. Getting to that agreement was complex, as was the deal that followed. In the transaction, Fred Meyer sold its real estate assets to a limited partnership and its operating assets to a corporation that then leased all of the real property from the partnership. The investors in each entity (in unequal percentages in the two entities) were KKR, MetLife, the State of Oregon Retirement Fund and Fred Meyer management. We represented Fred Meyer on all aspects of the acquisition, while one national law firm represented the buying entities with respect to the acquisition transaction and another national law firm represented the buying entities with respect to the investor and bank financings. Several other law firms were involved representing banks, investors and other involved parties. The S-4 and related proxy disclosures were complex. The closing(s) involved hundreds of documents, real estate and other filings in states and counties throughout the west, and financing closings in New York. The bumps and sidetracks along the way were many and too numerous to chronicle here. The successful outcome was widely celebrated. Q: What are the most challenging legal problems currently facing clients in your practice area? A: All of the legal and other problems that follow from the current condition of the world economy. Q: Where do you see the next wave of activity in your practice area coming from? A: As the economy improves (I am optimistic about that), we expect legal activity generally associated with economic growth, including financings of all types, strategic M&A activity of healthy companies, emerging businesses and venture investments. Q: Outside your own firm, name one lawyer who's impressed you and tell us why. A: That would probably be Steve Wynne, formerly of Ater Wynne in Portland. Steve was an effective business lawyer who became a successful businessman. He was a successful lawyer because he viewed business legal issues in the context of a larger transaction and provided good counsel and judgment to his clients, in addition to good documents. Q: What advice would you give to a young lawyer interested in getting into your practice area? A: Aspire to be a counselor, not just a lawyer. Never let anything go by you that you don’t understand, including the financial statements. Q: What accomplishment as an attorney are you most proud of? A: In 1991, I was asked whether lawyers in Oregon would make individual financial contributions to support Legal Services Programs and access to justice for the poor in Oregon. That led to the creation of the Campaign for Equal Justice, which for the past several years has contributed more than $1 million a year for the legal services programs in the state. I served as chair of the campaign board for the first 15 years.

122677 0 0 2009/10/16 00:00 Q&A With Stoel Rives' Henry Hewitt Thursday, Nov 19, 2009 2009/09/16 2009/09/16 74 2009/11/19 1

As the economy improves, expect legal activity associated with financings, strategic mergers and acquisitions activity at healthy companies, emerging businesses, and venture investments, says Henry Hewitt, leader of Stoel Rives LLP's business services group.

241d4db9f7a64dd1a5966dac963273ba 34 2009-11-18T17:44:00-06:00

Regional supermarket outfit The Penn Traffic Co. has filed for Chapter 11 protection with a proposal to sell virtually all of its assets, contending that it is running short on funds and has no prospects for raising cash from either the debt or equity markets. The company, which emerged from a previous bankruptcy in 2005, filed its petition Wednesday in the U.S. Bankruptcy Court for the District of Delaware, listing assets of $150.4 million and debts of $136.9 million. In a statement, Penn Traffic President and CEO Gregory J. Young said the company intends to continue to operate its stores through the bankruptcy process, as it conducts an orderly sale of its stores with the consent of its senior secured lenders. The Syracuse, N.Y.-based company owns and operates stores in upstate New York, Pennsylvania, Vermont and New Hampshire under the P&C, Quality and BiLo trade names. The company is not affiliated with Bi-Lo LLC, another supermarket chain, which is under Chapter 11 protection in the U.S. Bankruptcy Court for the District of South Carolina. “Our P&C, Quality and BiLo supermarkets remain open for business to serve our customers and communities,” Young said. Ronald F. Stengel, chief restructuring officer for the company, said in an affidavit filed with the court that that Penn Traffic was facing an April 2010 maturity date for a $42 million credit facility and was unable to raise money to refinance the debt. The company also had trouble soliciting new equity or other forms of financing, Stengel said. “In addition, the current lending climate indicates that the debtors’ ability to refinance or satisfy its remaining outstanding obligations under the credit facility likely will be problematic unless the credit markets improve quickly and significantly,” the affidavit said. The company asked the court for permission to access cash collateral in order to provide enough liquidity to continue operations through the bankruptcy process. While Penn Traffic said it intended to sell its stores under Section 363 of the Bankruptcy Code, it did not appear to have a stalking horse bidder for the assets. Currently, the supermarket company’s major equity holders include Bay Harbour Management LLC, which controls 23.7 percent, and the Pension Benefit Guaranty Corp., which was left with a 21.7 percent equity slice following the company’s previous bankruptcy, the petition said. Additionally, King Street Capital Management LP holds 15.6 percent, according to the petition. Previously, the company faced scrutiny from regulators over alleged accounting fraud from 2001 through 2003, Stengel's affidavit said. The U.S. Securities and Exchange Commission filed charges of civil fraud against the company's former chief market officer and a former vice president in September 2007. Additionally, the U.S. Attorney’s Office for the Northern District of New York pursued a criminal indictment against the former executives, who pled guilty to the charges in August. The company reached a settlement with the SEC over the civil charges, agreeing to a permanent injunction against future violations of federal securities laws, but neither admitted nor denied the allegations, the affidavit said. The SEC did not impose fines or other monetary penalties on the company, it said. “Accordingly, while these issues are now almost entirely behind the debtors, the effects of the significant legal and auditing costs continue to date,” exacerbating the supermarket company’s liquidity problems, Stengel said. Penn Traffic is represented by Haynes & Boone LLP, Fulbright & Jaworski LLP and Morris Nichols Arsht & Tunnell LLP. The case is In re: The Penn Traffic Co., case number 09-14078-PJW, in the U.S. Bankruptcy Court for the District of Delaware.

135032 0 0 2009/12/18 00:00 Grocery Co. Penn Traffic To Seek Sale Under Ch. 11 Wednesday, Nov 18, 2009 2009/11/18 2009/11/18 74 2009/11/18 1

7b38efd9d77947eda70eb50c9cf9ae6d 90 2009-11-18T16:49:00-06:00

Orbis Portfolio Management LLC says it will oppose an offer by Canon Inc. to purchase outstanding shares of Dutch printer maker Oce NV — a company in which Orbis holds a roughly 10 percent stake — for about €8.60 ($12.87) a share. Printing and camera giant Canon announced the €730 million ($1.1 billion) proposal Monday in joint press release with Oce. Orbis, a financial management firm, said in a news release Wednesday that it believed Oce's “assets are being significantly undervalued” as “a result of a flawed negotiation process.” A refusal by Orbis to sell its roughly 10 percent share could pose a significant hurdle, as the deal would require approval from 85 percent of shareholders, according to Orbis' news release. Orbis expressed frustration toward Oce for not taking its advice to sell different aspects of its company to different buyers. “If Oce … sought separate bids for each business unit from buyers with the strength to invest for the future, the interests of customers and employees would be enhanced, yielding a much higher value for shareholders as a result,” Orbis said. “Not even Konica Minolta, [Oce's] long-term strategic partner, was invited to bid for the company in whole or in part prior to the announcement of the agreement with Canon,” the company added. Canon executives had voiced hope that Oce's hold on the print making market would dovetail well with Canon's camera and copy machine manufacturing business. Canon President and Chief Operating Officer Tsuneji Uchida called the proposal a “winning combination” that would “contribute greatly” to the company's goal of “becoming the overall No. 1 presence in the printing industry.” Oce has struggled in recent months, posting a $37.4 million loss for the third quarter. Still, executives at both companies pointed to Oce's strong position in the European market as a valuable acquisition for Canon, whose sales are based most strongly in Asia. “There is a great fit between our companies, which share similar values and a strong commitment to technology and innovation,” Oce CEO Rokus van Iperen said. De Brauw Blackstone Westbroek is providing legal counsel to Oce. Lazard is acting as Oce's financial adviser. Stibbe and Herbert Smith LLP are providing legal counsel to Canon. Mizuho Securities is acting as Canon's financial adviser. --Additional reporting by Megan Stride

134998 0 0 2009/12/18 00:00 Orbis Balks At Canon's €730M Bid For Oce Wednesday, Nov 18, 2009 2009/11/18 2009/11/18 73 2009/11/18 1

89818d33982641dca98d0e9d04074d8c 14 2009-11-18T16:47:00-06:00

A key U.S. House of Representatives committee on Wednesday approved a plan to break up financial institutions deemed a threat to the financial system as a whole, even those that are deemed to be healthy and well capitalized. The House Financial Services Committee voted 38-29 to approve the amendment to the Financial Stability Improvement Act, the bill that includes resolution authority for large, interconnected financial institutions as well as plans for systemic risk regulation. The measure was introduced by Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services subcommittee on capital markets, insurance and government sponsored enterprises, who said that the amendment was meant to tackle the problem of financial institutions deemed “too big to fail” and prevent future taxpayer bailouts. “To maintain a vibrant economy, financial companies need to take risks, but we cannot afford the risk of losing our entire economy,” Kanjorski said in a statement introducing the amendment Wednesday. “Having made the difficult decision last year to rescue our economic system with the use of federal tax dollars, I hope that no Congress will need to face a similar situation in the future." The amendment expands on powers already included in the Financial Stability Reform Act's resolution authority provisions, which subject failed large, interconnected financial institutions to an orderly wind-down. Kanjorski's amendment focuses on the 50 largest financial institutions by total assets, including banks, hedge funds and insurance companies. The Pennsylvania Democrat added that the measure was meant to be used before that resolution authority went into effect. Under the Kanjorski plan, the Financial Services Oversight Council will determine whether a financial firm poses a risk to the broader financial system, removing that power from the Federal Reserve as originally had been proposed under legislation introduced by House Financial Services chairman Barney Frank and backed by the Obama administration. Frank voted for the amendment. The council will take into account a firm's asset size, degree of reliance on short-term financing, leverage levels and interconnectedness, among other factors, when determining whether an institution is “too big to fail.” If the council deems a firm to be too big or risky, the company could be blocked from further mergers, barred from offering certain financial products, or forced to sell off units or assets, according to the amendment. The Secretary of the Treasury would have to approve any asset sale totaling $10 billion or more. Any sale or divestiture larger than $100 billion would require presidential approval. Debate on the bill was fierce at the Wednesday markup, with Republicans saying the amendment would concentrate power in the hands of the government, according to media reports. "This puts the 'd' in draconian," said Rep. Jeb Hensarling, R-Texas, according to Dow Jones Newswires. No Republicans voted for the amendment, and three Democrats voted against. The banking industry had been lobbying hard against the Kanjorski amendment, saying such breakup powers could damage the U.S. economy. They also worry about the focus of the amendment. “I think that what we're worried about is this excessive or myopic focus on size,” Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, said in a telephone interview. “And we're worried that the federal government could break up institutions that are healthy and strong and managing risk well.” Talbott said better options for dealing with the too-big-to-fail question include increased capital requirements and other provisions that are in the Kanjorski amendment. A regulatory reform proposal introduced last week by Connecticut Democrat Chris Dodd, head of the Senate Banking Committee, also includes the power to break up financial institutions deemed too big to fail. The full House bill is expected to pass through committee Friday and face a vote of the full house in December.

135005 0 0 2009/12/18 00:00 House Committee OKs Breakup Of Too-Big-To-Fail Cos. Wednesday, Nov 18, 2009 2009/11/18 2009/11/18 74 2009/11/18 1

96ef879dfff34b07b3e8efa772df8203 91 2009-11-18T16:43:00-06:00

With financial reform likely around the corner, Bracewell & Giuliani LLP has brought in a corporate and securities attorney from Skadden Arps Slate Meagher & Flom LLP who specializes in providing advice to private investment funds. Cheri L. Hoff, who began work as a partner in Bracewell's New York office on Nov. 2, said that so far everything was going well, and that she looked forward to building up a private investment fund group. “As much as I learned at Skadden, it is exciting to be part of a growing group at a growing firm,” Hoff said. “It's growing very quickly, and it's doing very well,” she added. Bracewell already has private investment fund lawyers in Connecticut, but Hoff said she is the first member of the group based out of New York. “Cheri is a wonderful addition to the firm,” said John Brunjes, head of Bracewell's fund formation practice. “Her diverse experience in fund formation and corporate restructuring work makes her a great addition to our expanding practice in the New York office.” Over the years, Hoff has focused her practice on the formation and operation of hedge funds, private equity funds, funds of funds, hybrid funds and other private investment funds. She has also provided counsel to investors and advisers both domestically and internationally, according to the firm. Hoff has advised companies that are going through restructurings and reorganizations, including Chapter 11 cases, and she has participated in transactions involving distressed companies. “I did private fund formation, and I also did corporate restructuring,” Hoff said. “It's useful to have a combination of those skill sets in today's market.” She added that her practice at Bracewell would be a “combination of the two skill sets I acquired at Skadden.” These days, most clients are closely following proposed federal legislation that would further regulate private investment funds, according to Hoff. For example, the U.S. House of Representatives Financial Services Committee recently passed a bill that would require nearly all private fund advisers to register with the U.S. Securities and Exchange Commission, to maintain books and records, to submit reports on such things as use of leverage and counterparty credit risk exposures, and to make certain disclosures to third parties. Another bill passed by the same committee would enhance the regulatory powers of the SEC with respect to conflicts of interest, certain sales practices, compensation schemes and numerous other things. Similar legislation has been introduced in the Senate. “The level of transparency is going to change,” Hoff said. “Many people feel it's inevitable.” She said the main issues involved legal exemptions and reporting requirements. Overall, Bracewell & Giuliani LLP has more than 450 lawyers spread throughout Texas, New York, Washington, Connecticut, Dubai, Kazakhstan and London.

134955 0 0 2009/12/18 00:00 Bracewell Snags Private Fund Expert From Skadden Wednesday, Nov 18, 2009 2009/11/18 2009/11/18 24 2009/11/18 1