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To: Cactus Jack who wrote (169185)6/12/2009 3:30:29 PM
From: stockman_scott  Respond to of 362921
 
Cravath Asks Incoming Lawyers to Delay Start a Year /

By Lindsay Fortado

June 12 (Bloomberg) -- Cravath, Swaine & Moore LLP, the fifth-most profitable U.S. law firm, is offering $80,000 to incoming lawyers to defer their starting dates for a year, according to an internal memo obtained by Bloomberg News.

Cravath, whose clients include Citigroup Inc., Time Warner Inc., IBM, and Johnson & Johnson, also is requiring current summer associates who are offered full-time jobs to accept $65,000 to wait a year instead of starting in October 2010. The delayed start date for lawyers scheduled to begin work this year at the New York-based firm is optional.

“While the firm’s level of work is at or near its level before the continuing economic decline, there are many more associates at the firm today than our plans anticipated,” Cravath said in the memo to associates today. “The poor economy and the disruption at many financial institutions have reduced the rate at which our associates have left.”

The most-profitable U.S. law firms have experienced a drop in revenue as the credit crisis reined in spending by financial-services companies, slowing work on mergers, acquisitions and financings. The value of announced mergers and acquisitions totaled $691 billion this year, down 55 percent from the same period in 2008.

Cravath has advised buyers, sellers or targets on $33.5 billion in deals this year, according to data compiled by Bloomberg. The firm is advising the independent directors of General Motors Corp. in connection with its bankruptcy and defending Merck & Co. Inc. before the U.S. Supreme Court in a shareholder class action over the painkiller Vioxx.

Following Latham, Orrick

Cravath, one of the pace-setters for the top tier of law firms in the U.S. and one of the few that haven’t dismissed lawyers, is following the lead of Latham & Watkins LLP and Orrick, Herrington & Sutcliffe LLP in asking its new lawyers to take paid time off in exchange for a salary cut.

Latham, based in New York, and San Francisco-based Orrick, offered their incoming lawyers $75,000 in March to delay their start for a year. New York-based Skadden, Arps, Slate, Meagher & Flom LLP and Simpson, Thacher & Bartlett LLP have offered current associates a year off in a public-interest job for a reduced salary.

Cravath’s class of 150 incoming lawyers and 120 summer associates is “significantly larger than planned because the acceptance rate of our offers increased the size of those classes well beyond our expectations,” the memo said.

The firm will pay the deferred lawyers as much as $1,000 a month to cover student loans and the cost of medical and dental insurance, according to the memo. Up to 50 percent of this year’s incoming lawyers can defer, it said.

Starting at $160,000

Cravath, which pays its lawyers a starting salary of $160,000, slashed associate bonuses at the end of last year by as much as $80,000, citing “unprecedented conditions” in the economy. Salaried lawyers received a maximum bonus of $30,000.

Managing partner Evan Chesler has said the firm will not raise billing rates this year because of the financial crisis’s affect on clients.

The average partner profit at Cravath fell 24 percent to $2.5 million last year from 2007, placing it fifth in the U.S., according to the American Lawyer, a trade publication. Wachtell, Lipton, Rosen & Katz was the most profitable U.S. law firm with $4 million in profit per partner last year, according to the magazine.

To contact the reporter for this story: Lindsay Fortado in London at lfortado@bloomberg.net.

Last Updated: June 12, 2009 14:10 EDT



To: Cactus Jack who wrote (169185)6/15/2009 6:58:23 PM
From: stockman_scott  Respond to of 362921
 
Lehman Pays CEO’s Firm Alvarez & Marsal $77.3 Million /

By Linda Sandler and Christopher Scinta

June 15 (Bloomberg) -- Lehman Brothers Holdings Inc., the investment bank liquidating in bankruptcy, paid restructuring adviser Alvarez & Marsal LLC $77.3 million in fees, according to a filing with the U.S. Securities and Exchange Commission.

New York-based Alvarez & Marsal, which provided Lehman with its chief executive officer Bryan Marsal, has received the most of any of Lehman’s advisers since it declared bankruptcy in September, according to papers filed today. Lehman’s bankruptcy law firm, Weil Gotshal & Manges LLP of New York, has received $45.6 million for a team headed by partner Harvey Miller.

Marsal declined to comment and Miller didn’t immediately respond to an e-mail seeking comment.

Lehman has paid its professional advisers, including lawyers, bankers and accountants, $171 million from September through April.

The filing shows how lucrative corporate bankruptcies can be for advisers, even when creditors stand to take losses. Lehman may eventually raise $45 billion for its remaining creditors who are owed $200 billion to $250 billion, Marsal told Bloomberg News last month.

“While the Weil and Alvarez numbers are certainly eye- popping, they are probably not out of line for a case that is so large,” said Seton Hall University School of Law professor Stephen Lubben in Newark, New Jersey.

Cash Level Rises

Lehman said in the filing that its cash rose to $9.3 billion on April 30, up about $1 billion from the previous month. More money will come from spinning off real estate and private-equity properties to Lehman creditors, with an eye to taking the unit public as values improve, Marsal has said.

Milbank Tweed Hadley & McCloy LLP, which advises Lehman’s creditors, has received $10.4 million from the investment bank.

Lynn LoPucki, who teaches bankruptcy law at the University of California, Los Angeles, and maintains a database to calculate fees, has estimated that Weil Gotshal could see as much as $209 million in fees from the Lehman case. Overall, the bankers, accountants and lawyers in the case may reap judge- approved charges of $906 million, LoPucki has said.

Those fees refer only to the Lehman holding company.

Separately, James Giddens, who was appointed by the Securities Investor Protection Corp., to recover funds for customers and creditors of Lehman’s brokerage, is accruing further fees.

Adding Up

The cost of administering the wind-down of Lehman Brothers Inc. has been $55.6 million, while Giddens raised about $16.3 billion in cash and securities since the September collapse of the Wall Street firm, according to bankruptcy court documents.

Some $17.4 million of those administrative fees were paid to New York-based accounting firm Deloitte & Touche LLP. Another $14.7 million went to Giddens’s law firm, Hughes Hubbard & Reed LLP, and $12.2 million was paid to Barclays Plc, which bought real estate and Lehman’s North American brokerage operations for $1.45 billion in September.

Lehman filed the biggest bankruptcy in U.S. history with assets of $639 billion.

Weil Gotshal partners charge as much as $950 an hour, according to documents filed in the General Motors Corp. case on Friday. GM paid the law firm $54 million in the six months before it filed for bankruptcy on June 1, the documents showed.

GM gets cheaper legal advice from Detroit-based Honigman Miller Schwartz and Cohn LLP, where partners’ top rates are $710 an hour; the firm will bill GM at only 95 percent of those 2009 rates, according to court documents.

The Lehman case is In re Lehman Brothers Holdings Inc., 08- 13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter responsible for this story: Linda Sandler in New York at lsandler@bloomberg.net; Christopher Scinta in New York bankruptcy court at csinta@bloomberg.net.

Last Updated: June 15, 2009 16:06 EDT



To: Cactus Jack who wrote (169185)6/16/2009 5:06:32 PM
From: stockman_scott  Read Replies (2) | Respond to of 362921
 
Sosa Said to Test Positive in 2003
_______________________________________________________________

By MICHAEL S. SCHMIDT
The New York Times
June 17, 2009

Sammy Sosa, who joined with Mark McGwire in 1998 in a celebrated pursuit of baseball’s single-season home run record, is among the players who tested positive for a performance-enhancing drug in 2003, according to lawyers with knowledge of the drug-testing results from that year.

The disclosure that Sosa tested positive makes him the latest baseball star of the last two decades to be linked to performance-enhancers, a group that now includes McGwire, Roger Clemens, Barry Bonds, Alex Rodriguez, Manny Ramirez and Rafael Palmeiro.

Sosa, who is sixth on Major League Baseball’s career home run list and last played in 2007, had long been suspected of using performance-enhancing drugs but until now had never been publicly linked to a positive test.

In a recent interview with ESPN Deportes, Sosa, 40, said he would “calmly wait” for his induction into baseball’s Hall of Fame, for which he will become eligible for induction in 2013. But his 2003 positive test, when he played for the Chicago Cubs, may seriously damage his chances of gaining entry to the Hall, a fate encountered by McGwire, who has attracted relatively little support from voters in his first three years on the ballot.

The 2003 positive test could also create legal troubles for Sosa because he testified under oath before Congress at a public hearing in 2005 that he had “never taken illegal performance-enhancing drugs.”

The 2003 test that ensnared Sosa was the first such test conducted by Major League Baseball. Under guidelines agreed upon with the players union, the test results were to remain anonymous but would lead to testing with penalties the next year if more than 5 percent of the results were positive.

That is indeed what occurred. But for reasons never made completely clear, the test results were not destroyed by the players union and the 104 positives were subsequently seized by federal agents on the West Coast investigating matters related to the distribution of drugs to athletes.

The union immediately filed court papers alleging that the agents had illegally seized the tests, and over the past six years judges at various levels of the federal court system have been weighing whether the government can keep them. An 11-judge panel in California is preparing to rule in the case, but regardless of its verdict, the losing side is expected to appeal to the United States Supreme Court.

As the union feared, the names on the list have begun to emerge. In February, Sports Illustrated reported that Rodriguez was on the 2003 list, and Rodriguez subsequently acknowledged that he had used steroids for three years. Now, Sosa’s name has been disclosed.

The lawyers who had knowledge of Sosa’s inclusion on the 2003 list did not know the substance for which Sosa tested positive. They spoke on condition of anonymity because they did not want to be identified as discussing material that is sealed by a court order.

A lawyer for Sosa, Jay Reisinger, declined comment, as did an official with Major League Baseball.

Sosa, who lives in the Dominican Republic, became a national figure with the Cubs in 1998, when he and McGwire, of the St. Louis Cardinals, engaged in a compelling race to overtake Roger Maris’s single-season home run record of 61. McGwire passed Maris first and ended up with 70 home runs. Sosa followed close behind with 66.

The home run race was credited with helping revive interest in baseball after a 232-game strike wiped out the 1994 post-season and the beginning of the 1995 season.

In the seasons that followed, Sosa exceeded 60 home runs on two more occasions. But he was fading as a player when he traveled to Washington in March 2005 to testify with Palmeiro and McGwire and others at a hearing called by the House Government Reform Committee to examine the use of performance-enhancing drugs in baseball.

At the hearing, Sosa testified that “everything” he had heard “about steroids and human growth hormones is that they are bad for you, even lethal” and that he “would never put anything dangerous like that” in his body.

“To be clear,” he added, “I have never taken illegal performance-enhancing drugs. I have never injected myself or had anyone inject me with anything.”

During that hearing, McGwire, by then retired, repeatedly declined to answer questions about possible drug use, saying he was not there to talk about the past. His statements were widely viewed as an admission of guilt, and since then he has had little involvement with baseball except for privately serving as a hitting tutor for several major leaguers. To win election to the Hall of Fame, a player must be named on 75 percent of the ballots cast; McGwire has yet to be named on 25 percent of them.

At that same hearing, Palmeiro pointed his finger at committee members as he said: “I have never used steroids. Period.” Five months later, he was suspended for 10 games as a result of a positive steroids test.

The committee declined to ask the Justice Department to investigate him for perjury, in part because it felt it could not establish that Palmeiro was lying at the time he testified.

Unlike Palmeiro, Sosa testified after he had tested positive, not before, but it is not clear if the committee will want to pursue the matter.

The committee did refer Clemens to the Justice Department for investigation of perjury after he repeatedly denied using performance-enhancing drugs in a public hearing in 2008, and Clemens’s statements are now being studied by a federal grand jury.

Bonds, who set a single-season home run record of 73 just three years after McGwire hit 70, holds the career mark for home runs, with 762. He is also the target of legal proceedings: he is awaiting trial on charges that he lied to a federal grand jury in December 2003 when he testified that he never knowingly used performance-enhancers.

Like Sosa, Bonds and Clemens last played in 2007 and, at this point, also seem destined to appear on the 2013 Hall of Fame ballot. That fact, in itself, would seem to guarantee that the issue of drug use in baseball is likely to reverberate for years to come.

Copyright 2009 The New York Times Company