President Barack Obama isn't the only one cutting short his vacation and getting back to work this week.
Am Law 100 firms in New York and elsewhere are doing what they need to this week to support corporate, real estate, tax, and trusts and estates lawyers working overtime in order to squeeze in big deals and prepare clients for the potential tax implications of a dive off the so-called fiscal cliff should Congress and the Obama administration fail to negotiate an agreement before January 1.
Linda Hirschson, chair of the estate planning group at Greenberg Traurig in New York, tells The Am Law Daily she has been "incredibly busy" over the past six weeks working with clients seeking to take advantage of the roughly $5 million personal gift tax exemption wrapped into the two-year-old Bush tax cut extension now set to expire. (The New York Times reported in November on how changes to the gift tax as part of any fiscal cliff deal were causing some individuals and their legal and financial advisers to act now.)
"There's a last-minute rush of people trying to make various gifts, whether it's with residences that need leases or cash and securities," says Hirschson, whose three-lawyer team in New York is working closely with attorneys from various other practice areas in Greenberg Traurig offices in California, Florida, Phoenix, and McLean, Virginia. "Everybody is stretched thin, and all of this needs to be done in the next two to three business days."
Trusts and estates specialists aren't the only attorneys in demand as the nation moves closer to the precipice. Real estate and private equity lawyers are also grappling with what might happen should a cliff-averting deal fail to materialize, with a potential increase in capital gains tax rates making December—historically an active month on the dealmaking front for a variety of reasons—even busier than usual when it comes to transactional work.
"It's all tax-driven," Ballard Spahr national private equity and M&A practice leader Karen McConnell told the Phoenix Business Journal for a story about the year-end dealmaking drive on December 21, the same day The Am Law Daily reported that several Am Law 100 firms had landed roles on a string of private equity transactions totaling nearly $10 billion in value.
Several partners working on those matters either declined to comment or did not immediately respond to The Am Law Daily's requests for comment on the impact the looming budget crisis may have had on the deals, but other outlets have noted that the threat of higher tax rates has been a driving force in a series of private equity transactions in December. And firms with well-established private equity clients—including Kirkland & Ellis, Latham & Watkins, Ropes & Gray, Simpson Thacher & Bartlett, and Weil, Gotshal & Manges—have been among the busiest this month.
Kirkland, for instance, is advising New York's Palladium Equity Partners in connection with the sale of the Wise Foods snack brand to Mexico's Arca Continental (represented by Weil) for an undisclosed sum. Kirkland is also counseling mid-market private equity firm Linden Capital Partners on its $314 million buyout of dental equipment manufacturer Young Innovations, which is being represented by McDermott Will & Emery.
Turning to Latham, two months after representing Beverly Hills–based private equity firm Platinum Equity on its $1.24 billion purchase of container company BWAY, the firm is advising Atlanta-based BWAY on its $265 million acquisition of Ropak Packaging from the Linpac Group and its lawyers from McKenna Long & Aldridge.
Latham is also representing Los Angeles–based private equity firm Leonard Green & Partners on its $805 million acquisition this month of a 25 percent stake in British retailer Topshop from billionaire Philip Green's Arcadia Group, which according to U.K. publication Legal Week is being advised by Magic Circle shop Linklaters. (Latham also advised Leonard Green on its $3 billion buy of J.Crew in 2010.)
