Dec 15, 2011

On Thursday, December 15, Senior District Judge Samuel Conti of the United States District Court for the Northern District of California dismissed with prejudice claims brought against HSBC Bank USA, N.A. by Wailea Fund L.P., a counterparty to an ISDA-based swap agreement with HSBC that referenced the performance of a Madoff feeder fund. Wailea filed its complaint on July 19, 2011, seeking rescission of the swap agreement and return of approximately $16 million in upfront premium payments made to HSBC in connection with the swap. Wailea claimed a right to rescission on various grounds, including mutual mistake, unilateral mistake, innocent misrepresentation, failure of condition, and violations of the California securities laws.

Following oral argument on December 9, the Court dismissed all of Wailea's claims, holding that, under the plain language of the swap agreement, Wailea had assumed the risk of mistake as to the performance of the Madoff feeder fund as a matter of law, could not claim reasonable reliance on any representations made by HSBC as a matter of law, failed to and could not as a matter of law plead any condition precedent to contract formation, and could not point to any statements or omissions by HSBC that were actionable under the California securities laws.

Nov 29, 2011

Cleary Gottlieb successfully settled a class action brought under the Securities Act of 1933 on behalf of its clients Fleet Boston Financial Corporation (now Bank of America, N.A.) and individual defendants that arose out of the Argentine economic crisis of 2001. Plaintiffs argued that Fleet’s loan loss reserves were too low because it should have seen in March 2001, when it acquired Summit Bancorp in a $7 billion stock-for-stock merger, that Argentina would suffer an economic upheaval nearly a year later. As a result, the plaintiffs (former Summit shareholders who exchanged their shares for Fleet shares in the merger) contended that Fleet paid too little in the merger, and asserted claims under Section 11 seeking more than a billion dollars in damages. Extensive motion practice spanning several years narrowed the case substantially. After significant discovery, including over two dozen depositions in the United States and Argentina, confirmed that Fleet had no more insight into the future of Argentina’s economy than anyone else and that plaintiffs’ claims had no factual basis, Fleet was prepared to move for summary judgment.

Throughout the years, plaintiffs struggled to identify and maintain adequate class representatives, with the Court eventually demoting the class to “conditionally certified.” Plaintiffs moved to appoint five new class representatives, which motion was sub judice from June 2009 until the parties agreed to mediation. On March 3, 2011, the parties settled the case with the help of mediator Judge Nicholas Politan (ret.) for $5.5 million. On November 29, 2011, Chief Judge Brown of the U.S. District Court for the District of New Jersey finally approved the settlement, plan of allocation, certification of the settlement class, award of attorneys’ fees, and reimbursement of a class representative’s expenses.

Dec 20, 2011

Cleary Gottlieb is representing long-standing client Dexia in the sale of Dexia Banque Internationale à Luxembourg to Precision Capital and the State of the Grand Duchy of Luxembourg.

Precision Capital, a Qatari investment group, will acquire 90% of the stake and the remaining 10% will be acquired by the Grand Duchy of Luxembourg for a total consideration of €730 million.

The sale of Dexia Banque Internationale à Luxembourg is one of the steps of the restructuring plan of the Dexia group as announced on October 10, 2011.

Cleary Gottlieb is lead counsel in the entire restructuring and dismantling plan of Dexia, as well as in the new state guarantees granted by the Belgian, French and Luxembourg states, including in their contractual, regulatory and EU state aid aspects.

Nov 27, 2011

Cleary Gottlieb is acting as counsel to the Ministry of Oil of the Republic of Iraq in connection with the Basrah Gas Company project, a joint venture between South Gas Company (an Oil Ministry affiliate), and affiliates of Royal Dutch Shell and Mitsubishi Corporation. The transaction agreements were signed on November 27, 2011.

The purpose of the 25-year project is to gather and process associated natural gas that is produced at three giant oil fields near Basrah, in the southern part of Iraq. Currently, most of the associated gas is flared due to a lack of processing capacity, resulting in significant environmental damage and economic waste. The problem will become more acute as oil production from the fields is increased – studies show that associated gas production from the three fields could increase from its current level of 700 million standard cubic feet per day to over 2 billion standard cubic feet per day.

Under the transaction agreements, the parties will create a new company, Basrah Gas Company, in which South Gas Company will hold a 51% interest, Shell 44% and Mitsubishi 5%. BGC will process associated gas from the three fields, extracting liquids such as condensate, propane and butane for sale in Iraq and for export. The remaining dry natural gas will be used in Iraq, primarily to product electric power. If the volume of gas produced is greater than domestic requirements, BGC may construct a Liquefied Natural Gas plant or other export facilities. The total investment requirement is currently estimated at $17 billion.

Dec 23, 2011

Cleary Gottlieb is representing The Coca-Cola Company in the restructuring of its joint venture with Nestlé SA, Beverage Partners Worldwide (BPW), which is active in the ready-to-drink tea beverage business. The geographic scope of the joint venture is being narrowed to provide focus on the sale of ready-to-drink tea in Europe and Canada. The parties will enter license agreements to continue to sell beverages in Taiwan and Hong Kong.

The agreement governing the terms of the restructuring was signed on December 23, 2011, and provides for a transition to the new geographical focus until the end of 2012 at the latest, subject to any regulatory approval.

Beverage Partners Worldwide, a 50-50 joint venture focused on the ready-to-drink tea category held by Nestlé S.A. and The Coca-Cola Company, was created in 2001, following a period of 10 years during which Nestlé and The Coca-Cola Company cooperated in a joint venture called Coca-Cola and Nestlé Refreshments.

Jan 11, 2012

Cleary Gottlieb is advising the Genting Organization in its dealings with the State of New York concerning a $4 billion private investment for the development of a 3.8 million square foot convention and exhibition center at the Aqueduct Racetrack site in Queens, New York. In addition to the new convention space, up to 3,000 hotel rooms are expected to be developed. The convention and exhibition center will be the largest in the nation and will generate tens of thousands of jobs.

Nov 23, 2011

Cleary Gottlieb represented U.S. technology company Western Digital as lead antitrust counsel in Europe on its $4.3 billion acquisition of Hitachi’s hard disk drive (HDD) business, known as Viviti Technologies. The deal was closely monitored by the European Commission who raised regulatory concerns about the 3.5" HDD business, due to a parallel transaction in the HDD sector between Seagate and Samsung. To alleviate the Commission's concerns, Western Digital will divest certain assets. The deal is still awaiting antitrust approval in the United States and other jurisdictions.

Nov 04, 2011

Cleary Gottlieb is representing Sony on its acquisition of Ericsson’s 50 percent stake in Sony Ericsson Mobile Communications AB, making the mobile handset business a wholly-owned subsidiary of Sony. As part of the transaction, Ericsson will receive a cash consideration of €1.05 billion.

The transaction will provide Sony with a broad IP cross-licensing agreement and ownership of five essential patent families and will give Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices.

Oct 09, 2011

Cleary Gottlieb is representing long-standing client Dexia in the nationalization, announced on October 9, 2011, of Belgian banking subsidiary Dexia Bank Belgium (DBB). Dexia's 100% interest in DBB will be sold for an initial cash consideration of €4 billion.

Cleary Gottlieb is also advising Dexia on the new sovereign guarantees granted by the French, Belgian and Luxembourg States, as well as on possible further divestments.

Sep 02, 2011

Cleary Gottlieb represented Bank of America in its sale of approximately 13.1 billion H shares of China Construction Bank for an aggregate sale price of approximately $8.3 billion. The transaction was signed on August 29, 2011 and closed on September 2, 2011.

Cleary Gottlieb previously represented Bank of America in its 2005 acquisition of an approximately 8.5% interest in CCB, which was the single largest foreign investment ever in a Chinese company, in its 2008 exercise of an option to acquire an additional approximately 10.9% interest in CCB and its subsequent sales of CCB’s shares and share rights in 2009 and 2010, respectively.

Jun 30, 2011

Cleary Gottlieb is representing Nortel Networks on the Section 363 bankruptcy sale of its residual patent assets through a bankruptcy auction to a consortium consisting of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony for $4.5 billion, an increase of $3.6 billion from Ranger Inc.’s original stalking horse bid for these assets. The sale results from a four day auction that took place in Cleary Gottlieb’s New York office from June 27 through June 30. A joint hearing before courts in the United States and Canada is set to be held on July 11 to formally approve the sale.

Nortel has been a client of Cleary Gottlieb for more than 20 years. The firm is currently acting as U.S. bankruptcy counsel to Nortel and affiliates in their U.S. Chapter 11 proceedings, which are closely coordinated with proceedings in Canada, the United Kingdom and France.

Cleary Gottlieb has represented Nortel on its prior Section 363 bankruptcy auction sales, including the:

• sale of its wireless infrastructure assets to Ericsson for $1.13 billion (November 2009);
• sale of its global Enterprise Solutions business to Avaya for a total of $915 million (December 2009);
• sale of its Optical Networking and Carrier Ethernet businesses to Ciena for $774 million (March 2010);
• sale of its GSM/GSM-R business in Europe and Taiwan to Ericsson and Kapsch CarrierCom for $103 million (March 2010);
• sale of its Carrier VoIP and Application Solutions to GENBAND for $282 million (May 2010); and
• sale of its Multiservice Switch business to Ericsson for $65 million (September 2010).

Jan 29, 2011

Cleary Gottlieb is currently representing Alpha Natural Resources, Inc. in its $8.5 billion acquisition of Massey Energy Company. Under the terms of the agreement, Massey stockholders will receive, at the closing, 1.025 shares of Alpha common stock and $10.00 in cash for each share of Massey common stock. The transaction, which was announced on January 29, is expected to close later this year pending receipt of stockholder approvals of both companies and regulatory clearances.

The combined company will bring together Alpha's and Massey's highly complementary assets, which include more than 110 mines and combined coal reserves of approximately 5 billion tons, including one of the world's largest and highest-quality metallurgical coal reserve bases.

Alpha Natural Resources is one of America's premier coal suppliers with coal production capacity of greater than 90 million tons a year. Among U.S. producers, Alpha is the leading supplier and exporter of metallurgical coal used in the steel-making process and is a major supplier of thermal coal to electric utilities and manufacturing industries across the country.

Sep 24, 2010

Cleary Gottlieb is acting as international counsel to Petróleo Brasileiro S.A.--Petrobras (Petrobras) in its global equity offering announced September 3, which is expected to be the largest equity offering ever. The aggregate proceeds of the global offering to Petrobras, after underwriting discounts and commissions (before expenses), will be equivalent to approximately US$67 billion.

Petrobras will use part of the proceeds to pay $42 billion to the Brazilian federal government for the right to extract up to five billion barrels of oil equivalent from deep-water areas off the Brazilian coast.

Apr 23, 2010

Cleary Gottlieb represented Samsung Life Insurance in its $4.4 billion initial public offering, the largest IPO ever by a Korean company. Goldman Sachs, Bank of America Merrill Lynch and Morgan Stanley were joint bookrunners for the international tranche of the offering. The IPO priced near the high end of the expected price range on April 23, and the common shares will begin trading on the KRX KOSPI Market of the Korea Exchange on May 12.

Samsung Life Insurance is the leading life insurance company in Korea and is one of the flagship companies of the Samsung Group, which is the largest business group in Korea. The company provided coverage to 12.6 million individuals as of December 31, 2009, representing approximately 26% of the Korean population. As of the pricing date, the company would rank sixth in terms of market capitalization among companies listed on the Korea Exchange.

Dec 20, 2010

Cleary Gottlieb represented PETRONAS Chemicals Group Berhad (PCG) and the selling shareholder, Petroliam Nasional Berhad (PETRONAS), in PCG’s Ringgit Malaysia 14.78 billion (approximately $4.7 billion) initial public offering, the largest initial public offering ever in Southeast Asia. CIMB Investment Bank Berhad, Deutsche Bank AG, Hong Kong Branch and Morgan Stanley & Co. International plc acted as joint global coordinators and joint bookrunners for the institutional offering, and CIMB Investment Bank Berhad acted as the managing underwriter for the retail offering in Malaysia. The shares were sold through a registered public offering in Malaysia and through a Rule 144A/Regulation S offering outside Malaysia. The deal priced on November 12, 2010 and closed on November 24, 2010, and the PCG shares were listed on the Main Market of Bursa Malaysia Securities Berhad on November 26, 2010. An over-allotment option granted by PETRONAS was exercised in full on December 17, 2010.

PCG is a leading integrated petrochemicals producer in Malaysia and is one of the largest petrochemicals producers in Southeast Asia, with an annual production capacity of over 11 million metric tons. PCG manufactures, markets and sells a diversified range of petrochemical products, including olefins, polymers, fertilizers, methanol and other basic chemicals and derivative products. PETRONAS is a fully integrated oil and gas corporation with operations in more than 30 countries around the world. It is wholly owned by the Malaysian government and ranked in the FORTUNE Global 500.