M&A Surge Could Cost In-House Lawyers, Accountants Their Jobs

Employment - hiringWhen a company buys another business, frequently the acquiring party sees some “overlapping general and administrative functions” in the company that was acquired. This can result in layoffs for some in-house lawyers and other executives and staff people, reports Crain’s Chicago Business.

From the magazine’s report: Professionals’ fates depend on a mix of factors, including their spot on the org chart and the acquirer’s goals, says John Nimesheim, managing director at Slayton Search Partners in Chicago. For example, a private-equity firm that buys a company is more likely to leave the management team intact than a company that acquires for strategic purposes.

“Sometimes it’s, ‘We’re the acquirer, and our team is going to win, and your team is going to go away,’ “ he says. “Sometimes, depending on the structure of the deal, they really want to be friendly.”

The Crain’s report examined several mergers and acquisitions to discern patterns.

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Wingstop Appoints New General Counsel

WingstopWingstop Restaurants Inc. has appointed Jay Young to be the company’s next general counsel.

Young will serve on the company’s executive leadership team, reporting directly to President and CEO Charlie Morrison.

In a release, the company said Young joins Wingstop during a year of record-setting growth.

“We are delighted to welcome Jay, a great addition to the Wingstop team,” said Charlie Morrison, Wingstop President and CEO. “Jay is a highly-experienced executive whose business and legal acumen will be invaluable to us as we continue to aggressively grow our proven concept. We look forward to his contributions.”

Young brings more than 18 years of legal expertise to Wingstop, including an extensive background in the restaurant and financial services industries. Before joining Wingstop, Young served as Senior Vice President and General Counsel for CEC Entertainment (Chuck E. Cheese), a nationally recognized leader in family dining and entertainment.

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Magazine Profiles IRR Strategies General Counsel Ed Vidal

General Counsel NewsHispanic Executive magazine has profiled Eduardo Vidal, general counsel of IRR Strategies, who moved to the United States as a nine-year-old boy from Cuba.

The profile tells how his family moved to Chicago where he later went to the University of Chicago. After five years in Chicago, he moved to New York where he spent 22 years working in the burgeoning corporate finance space of cross-border transactions with companies in Latin America.

Eventually, when that kind of work started to dry up, he sought opportunity in Texas, where he landed with a new business process outsourcing (BPO) company, (which includes call centers, technical support, and back-office paperwork) as general counsel. The company, IRR Strategies, LLC, provides global solutions for BPO services to small and medium-sized enterprises, private equity, and venture capital.

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Halliburton Buying Baker Hughes For $34.6 Billion

Oil pump rigHalliburton Co. will buy Baker Hughes Inc. for about $35 billion in cash and stock, Reuters is reporting.

The combined entity could challenge oilfield services market leader Schlumberger as customers begin to cut spending due to falling oil prices.

Halliburton expressed confidence that the deal would clear regulatory hurdles, but Baker Hughes shares were trading well below the offer, suggesting that investors were not so sure.

Reuters reports that Halliburton also said it was ready to divest businesses that generate revenue of $7.5 billion to satisfy regulators and would pay Baker Hughes $3.5 billion if the deal was not cleared.

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Attorney Sentenced to Five Years in Prison for Defrauding Investors

Scales of justiceThe U.S. Department reported that Gregory E. Grantham, 57, of Oceanside, California, was sentenced to five years in prison on Nov. 14 , followed by three years of supervised release, for a wire fraud conspiracy, wire fraud and obstruction of justice. U.S. District Judge J. Frederick Motz also ordered Grantham to forfeit/ pay restitution of $17.4 million.

DOJ reports:

Grantham is a licensed attorney and between September 2009 and September 2011, was employed as General Counsel for IAGU Underwriters, LLC, as well as maintaining a private law practice. Graham’s co-defendant, Mervyn Phelan operated IAGU, which was in the business of underwriting loan applications submitted by real estate developers and then locating project financing from banks and other financial entities.

According to his plea agreement and court documents, between mid-2010 and August 2011, Grantham and Phelan became involved in a fraudulent scheme carried out by Patrick Belzner and Brian McCloskey, who both resided in Baltimore County. McCloskey owned a real estate development business known as the McCloskey Group, LLC. Belzner, a home builder, began working with McCloskey in late 2008 or early 2009. Phelan and IAGU began working with the McCloskey Group trying to locate sources of financing for its projects in about 2009.

Beginning in 2009 and continuing through June 2011, Belzner and McCloskey persuaded a series of private lenders to fund loans to establish that the McCloskey Group had reserves of cash that would supposedly help it obtain loans it was seeking in connection with real estate development projects through IAGU. Belzner and McCloskey falsely represented that the funds would be maintained in an escrow account under the control of Kevin Sniffen, a licensed attorney and escrow agent in Baltimore County; that the funds would not be used for any other purpose; and that the money would be returned to the lender, either upon the funding of the loan or after a specified period of time. In return for this temporary use of the lender’s funds, Belzner and McCloskey promised to pay substantial fees or interest. In fact, once the lenders transferred their funds into the escrow accounts, Belzner directed McCloskey to remove those funds from the escrow accounts without the knowledge or permission of the lenders. Belzner and McCloskey then used the majority of the stolen funds to pay for their personal and business expenses. The total losses resulting from the scheme were approximately $20 million.

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California Peach Farmer, Union Slug It Out at Hearing

Peach treeAn administrative law hearing that could determine whether more than 3,000 workers at the nation’s biggest peach farm are unionized got heated when a lawyer for Gerawan Farming accused the chief prosecutor in the case of playing “hide and seek” with evidence and witnesses

As reported by CNBC, California Agricultural Labor Relations Board (ALRB) General Counsel Sylvia Torres-Guillen, who is responsible for investigating and prosecuting the case, has alleged that Gerawan Farming carried out unfair labor practices, engaged in bad-faith bargaining, and tainted workers.

“This case from the beginning has been hide and seek by the general counsel,” said Ronald Barsamian, an attorney for Gerawan. “We’re still waiting for the UFW to put on its case—let alone the ALRB. If it’s not hide and seek, it’s just not preparing adequately for this case.”

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Takata Air Bag Problem Gets Worse

Steering wheelThe controversy surrounding the allegedly defective shrapnel-slinging exploding air bags continues to grow, now that Nissan says it will add another 52,000 vehicles to its recall effort.

Nissan reported the plan to the National Highway Traffic Safety Administration, according to a report in The Los Angeles Times.

“Meanwhile, a group of senators is asking the Justice Department to launch a criminal investigation into reports that the air bag supplier conducted secret tests on ruptures a decade ago but didn’t take action or report the results to safety regulators,” The Times reports.

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Securities-Fraud Scheme Lands Ex-COO 30 Months in Prison

Scales of justiceStephen Shea, the former chief operating officer of brokerage firm Sky Capital LLC, has been sentenced to 30 months in federal prison for his part in a $140 million securities-fraud scheme.

Bloomberg News reports that Shea and five others were charged in June 2009, three years after FBI agents raided the brokerage firm. Other former employees convicted in the case included founder Ross Mandell, who’s serving an 12-year prison sentence for operating a scheme that started in 1998.

“The defendants misled investors, who put cash in private investments, and then used that money to enrich themselves, pay excessive fees and commissions to brokers and pay off victims of earlier schemes, Manhattan U.S. Attorney Preet Bharara said in 2009, when the case was filed.” according to Bloomberg’s report.

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Can Computer Application Programming Interfaces Be Copyrighted?

CopyrightThe Electronic Frontier Foundation (EFF) reports that it has asked the U.S. Supreme Court to review a “disastrous” appellate court decision finding that com[puter application programming interfaces (APIs) can be copyrighted.

The case is Oracle v. Google.

“That decision, handed down by the U.S. Court of Appeals for the Federal Circuit in May, up-ended decades of settled legal precedent and industry practice,” EFF said in a statement.

Forbes reports that the EFF is indicating it has the backing of 77 well-known computer scientists. In October,  Google petitioned the Supreme Court to review the case, which it states has implications for technical innovation.

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GM Names Firm to Lead Search for New General Counsel

General MotorsExecutive search firm Heidrick & Struggles International Inc. will lead the search to find a new general counsel to succeed General Motors Co.’s Michael P. Millikin, who will retire early next year, reports The Wall Street Journal.

Leading the effort for Heidrick & Struggles are Victoria Reese, global head of the firm’s legal, risk, compliance and government affairs practice, and Lee Hanson, a Heidrick vice chairman and former investment banker, reports The Journal, citing sources who asked not to be identified because the information hasn’t been made public.

Millikin, who has been with GM since 1977 and has served as general counsel for five years, has announced his retirement.

“The 66-year-old has been one of Chief Executive Mary Barra’s closest allies as she took on the CEO position earlier this year and has dealt with the continuing ignition-switch debacle,” according to The Journal‘s report.

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Qualcomm Faces Two New Antitrust Probes

Intellectual property IPQualcomm faces three investigations into allegations of anti-competitive behavior, as it revealed new probes in the United States and European Union on top of the antitrust inquiry it already faces in China, according to a report in The Financial Times.

Reporting earnings on Wednesday, the wireless chip developer warned that the probe in China, which began last year, presented “significant challenges” in forecasting the year ahead.

Qualcomm recently disclosed two new investigations had begun in the last month, one into its patent licensing business by the Federal Trade Commission in the United States and the other into its baseband chip set business in Europe.

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Apple Facing Trial for Music Downloading Restrictions

Earphones around EarthApple will try to defend against allegations that it violated antitrust laws by trying to restrict music downloads for iPods to its iTunes store. Jury selection in the federal trial will begin Nov. 19, reports the San Jose Mercury News.

While Apple abandoned the restrictions in question years ago, the stakes are still high — damages could exceed $1 billion if antitrust violations are proven, and an adverse verdict would amount to a black eye for the company’s past business practices, reports the News.

It continued, “The antitrust case was first filed in 2005, alleging Apple created a monopoly by blocking iPod owners from going to competitors for their music. The central issue involved Apple’s ‘FairPlay,’ a so-called digital rights management system, or DRM, that ensured iPod owners could only download songs from the iTunes store.”

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Media Companies Want Programming Contracts Kept Confidential

TelevisionSome media companies, including CBS Corp. and Walt Disney Co., have sought a court order to stop the U.S. Federal Communications Commission from disclosing programming contracts as part of its review of Comcast Corp.’s proposed purchase of Time Warner Cable Inc.

Bloomberg News reports that the companies will suffer “substantial harm” if distribution agreements are disclosed, lawyers for media companies wrote yesterday in a request for an order in the U.S. appeals court in Washington blocking release of the information.

“The FCC repeatedly has recognized that distribution agreements are entitled to the highest level of confidential treatment,” the companies said in the filing.

Comcast, the largest U.S. cable-TV company, proposed buying No. 2 Time Warner Cable for $45.2 billion in February.

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Energy-Storing Batteries Will Boost Grid Reliability

Renewable Energy Systems Ltd., a developer of clean-energy projects, is building battery storage units near Chicago that will boost grid reliability, reports Bloomberg News.

The company plans two 19.8-megawatt storage units, one in West Chicago and another in Joliet, the company’s Broomfield, Colorado-based unit said today in a statement. When completed in August, the systems will be the largest on the continent, the company said. Terms weren’t disclosed, Bloomberg News reports.

“Storage systems absorb excess energy when there is oversupply and release it when power is needed allowing providers to avoid expensive generators when demand peaks. The units can also store excess power from intermittent sources like wind and solar, allowing utilities to blend renewable energy into their supply,” according to the Bloomberg report.

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Holiday Workers Need Background Checks, Too

ThiefBecause temporary employees usually have access to your place of business, and they interact with your permanent work force and maybe even clients, it’s important to be sure they can be trusted, advises EmployeeScreenIQ.

It’s likely that these temporary workers are trained on your business systems, and may have access to certain intellectual property.

“They may even have access to your trade secrets,” EmployeeScreenIQ says on its website. “Given the huge amount of access that temporary workers are given during a relatively short amount of time, it’s important to screen these workers just as you would other employees.”

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Determining a Consumer’s Modified Adjusted Gross Income

StethoscopeThe National Health Law Association has posted online a complimentary white paper on rules for determining a consumer’s Modified Adjusted Gross Income (MAGI).

MAGI applies when determining eligibility for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) for health coverage purchased through the Marketplace, as well as eligibility for the Children’s Health Insurance Program (CHIP) and Medicaid, NHLA says on its website.

This paper focuses on using MAGI to calculate a consumer’s total household income. This paper was provided as part of the navigator and assister training series by the Center for Medicare & Medicaid Services Weekly Marketplace Webinar trainings for assisters.

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Apple Suppliers Shunned as GT Bankruptcy Sparks Selloff

Supply chain managementThe bankruptcy of GT Advanced Technologies Inc. wiped out 92 percent of its value in a single day last month, leading to a loss in investor confidence in Apple Inc. suppliers and vendors.

Bloomberg reports that shares of 21 companies that get at least 20 percent of their revenue from Apple have fallen 2.8 percent since the Oct. 6 bankruptcy filing by GT Advanced, which had a contract with the iPhone maker to supply synthetic sapphire that was never used in its devices.

“At the heart of the concerns are agreements between GT Advanced and Apple, including a $578 million loan, that the supplier said caused its bankruptcy,” Bloomberg reports.

The case is shining a spotlight on contracts between technology companies and their suppliers, details of which aren’t typically disclosed in securities filings.

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For-Profit Education Groups Sue to Block Gainful Employment Rules

EducationInside Higher Ed reports that the for-profit education sector’s primary trade group on Thursday filed suit in federal court to block gainful employment regulations, which the U.S. Department of Education unveiled last week.

On its website, Insidee Higher Ed said that a federal judge in 2012 halted a previous attempt by the Obama administration to enact rules for vocational programs at for-profits, community colleges and other institutions. While the judge found that the department was within its rights with the overarching thrust of the regulations, the judge also said the department failed to establish its reasoning behind one of the metrics.

The Association of Private Sector Colleges and Universities filed the suit, alleging that gainful employment “repeats and exacerbates” problems that led to its previous version being held up in court, calling the rules arbitrary.

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In-House Legal Work to Increase Over the Next Year

Stacks of dollarsCorporate law departments have reported in a recent Altman Weil survey that they will cut down on outside counsel spending over the next year, writes JDJournal, reporting on Altman Weil Inc.’s “2014 Chief Legal Officer Survey.”

The survey said that the recession put limits on in-house legal department resources, but also gave chief legal officers more leverage against outside counsel, JDJournal writes.

“Chief legal officers are buyers in what is currently a strong buyers’ market,” the survey says.

Data from the survey found that half the law departments involved received price reductions from outside counsel ranging between six and 10 percent. More than one-third of the firm that responded said the discounts they received were more than 10 percent, JDJournal  says.

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Win-Win or Hardball: Learn Top Strategies from Sports Contract Negotiations

Harvard Law SchoolHarvard Law School’s Program on Negotiation is offering a free copy of “Win-Win or Hardball: Learn Top Strategies from Sports Contract Negotiations.”

The document offers such contract negotiation advice as:

Share information – Instead of assuming your interests are directly opposed to your counterparts’ interests, provide information that could lead to wise tradeoffs

Reject the “fixed pie” – It’s easy to assume that the pie of resources to allocate is fixed; when in fact there are opportunities to expand the pie by creating value

Avoid anchoring on the first offer – Don’t become overly affected by the first number entered into the negotiation

Set concrete goals – By setting concrete goals in advance, you won’t be swayed by other’s influence tactics, vivid stories, and hard-bargaining techniques

Take my time – When you’re pressed into making snap decisions, your thinking will be more intuitive and less rational

Avoid dwelling on the past – Past investments should rarely affect our decisions about the future

Download the document.