Law Times

PAGE 2 NEWS January 25, 2010 • Law Times Silver lining in U.S. collapse BY TIM SHUFELT Law Times C anadian companies should see a silver lin- ing in the dark cloud that blanketed U.S. mergers- and-acquisitions activity in the last couple of years, according to a firm specializing in cross- border transactions. Globally, M&A activity has precipitously dropped since 2007, a trend that is particu- larly stark in the United States and one that is driven by the economic collapse, according to lawyers with Paul Weiss Rifkind Wharton & Garrison LLP. But while some economic in- dicators point to the nascent stag- es of a recovery, others think the turnaround is only a temporary reprieve from the turmoil. "Some people think the dou- ble dip is really going to happen, that all that has been done is we've replaced consumer debt as the driver of the U.S. economy with government debt," said Matthew Abbott, a partner at the firm. And when that debt be- comes unsustainable, interest rates south of the border could rise dramatically, he added. "The positive story is for coun- tries that are relatively strong like Canada," Abbott said. "There will be significant opportunities with a weak dollar to acquire pretty great assets." Abbott and his colleagues spoke recently at a forum in downtown Toronto about the implications for Canadian corpo- rate lawyers of U.S. legal develop- ments and market trends in 2009. For the most part, the numbers were predictably troubling. M&A volume in the United States suffered significant losses, falling to US$769.8 billion from $1.7 trillion two years earlier. Within those transactions, however, private equity deals faced the most dramatic drop at $79.3 billion last year, down 85 per cent from 2007. "That's really been one of the big stories — the absence of private equity in the deal- making landscape — and that's really been the story since late 2007," Abbott said. On the positive side, however, a majority of the largest transac- tions of the year were completed with cash, indicating that the largest companies didn't have to resort to using stock as currency, said Ariel Deckelbaum, a partner at Paul Weiss. "The investment-grade market was alive and well almost entirely throughout the credit crisis." Deckelbaum said the finan- cial collapse dragged down the stock prices of U.S. corpora- tions of all sizes. "Therefore, I think they were reluctant to use their un- dervalued stock as currency in transactions." The recession produced a num- ber of other important changes in U.S. markets, Deckelbaum said. showed some promising signs, said Andrew Foley, a partner in the firm's corporate department. "To the surprise of many, maybe all, markets in late 2008 and early 2009, [initial public offerings] aside, were certainly open for capital raising and rea- sonably robust," he said. Through equity sales, com- From left, Matthew Abbott, Ariel Deckelbaum, Stephen Lamb, Andrew Foley, and Edwin Maynard speaking in downtown Toronto about U.S. legal developments and market trends in 2009. Surprisingly, he noted, the num- ber of hostile takeovers that many observers had predicted didn't transpire. That could be due in part to an increase in the adop- tion of poison pills in the United States as shareholders signalled to their boards that they didn't want them to sell in such a distressed economic environment. As well, when deals do take place, buyers have returned to the fundamentals in evaluating a transaction by rigorously fo- cusing on due diligence. "There's really an attention, not just kicking the tires, [in which] they want to take the car apart and put it back together," Deckelbaum said. The numbers also show that termination fees have risen sub- stantially for both strategic M&As and private equity deals. "With the number of busted deals over the last couple of years and all the litigation that took place, it's not surprising that fees have crept up," Abbott said. At the same time, companies are doing more deals with fi- nancing conditions, particularly in private equity transactions, where the proportion rose to 20 per cent last year from 2.5 per cent in 2007. "Now that the banks are ac- tually paying attention to the terms on which they lend and who they give commitments to, I don't think we'll ever go back to that kind of low num- ber," Abbott said. In the years ahead, the re- covery of the M&A market will largely be tied to the performance of the economy at large, accord- ing to Deckelbaum. But given the huge volume of job opportunity Legal Aid Ontario is committed to promoting access to justice throughout Ontario for low-income individuals by providing consistently high quality legal aid services. Job Title: Staff Lawyer Assignment: Permanent Full Time Location: Various. Initial placement with LAO's Duty Counsel in Cobourg as Supervisory Duty Counsel Area of Search: Open to Legal Aid Ontario, Clinic employees and external applicants. LAO is looking for a staff lawyer to serve clients in a number of capacities, in various areas of law. Initially, the successful applicant will spend two years with LAO's Duty Counsel Offi ce in Cobourg as Supervisory Duty Counsel. As part of the Lawyer Workforce Strategy, at the completion of the initial two-year placement, the successful candidate may be further deployed within the organization in accordance with the needs of the organization and the lawyer's career development plan. LAO is looking for a staff lawyer to serve clients in a number of capacities, in various areas of law. Initially, the successful appli- cant will spend two years with LAO's Duty Counsel Offi ce in Cobourg as Supervisory Duty Counsel. As part of the Lawyer Work- force Strategy, at the completion of the initial two-year placement, the successful candidate may be further deployed within the organization in accordance with the needs of the organization and the lawyer's career development plan. In the initial placement, the candidate will: • • • • • • • • • • • • Prepare and manage staff and per diem duty counsel budgets Manage, train and schedule per diem duty counsel, staff duty counsel and paralegal staff Review and approve duty counsel statements of account and services and track quality assurance measures Act as a liaison between Legal Aid Ontario, the Judiciary, Ministry of the Attorney General and the private bar Some travel required Supervise and administer fi nancial eligibility tests in accordance with LAO policy Perform other duties and administrative tasks as assigned In criminal court, assist in obtaining adjournments, diversions, representation at guilty pleas, speaking to sentence, bail hearings, fi tness hearings and occasionally provide assistance at trials in accordance with LAO directives In family court, assist in obtaining adjournments, representation at motions, some hearings concerning custody, access or support, case conferences, temporary care and custody hearings, and support enforcement proceedings Assist in settlement negotiations Review documents and assist in drafting pleadings and other documents Act as the Advice Lawyer in the Family Law Information Centre Required Skills and Experiences • • • • • The Town of Kingsville, which includes the communities of Ruthven and Cottam, with a population of 21,000, is seeking an experienced and energetic individual to become a key member of the senior management team and will be reporting directly to the CAO. The Town is located on the beautiful shores of Lake Erie, in the southernmost region of Canada. Kingsville is advantageously situated close to the international border and major urban centres and benefits from an ideal growing climate and a diverse technologically-based agricultural economy providing op- portunities for all ages. The Director of Corporate Services will be responsible for the management of the Clerk's Department and perform all the duties of the Municipal Clerk as outlined in the Municipal Act. Other duties will include providing legal advice to all municipal departments as required. The Director of Corporate Services shall have obtained a Bachelor of Laws Degree and a minimum of five years' experience in a senior management position related to law or the Municipal Clerk's function. A complete description of the Director of Corporate Services duties is available on the Town of Kingsville website www.kingsville.ca. Applicants shall complete the Municipal Career Profile (job application form) which is provided online. Membership in the Law Society of Upper Canada Personal motivation and accountability Problem solving and judgment Commitment to social justice / public interest work Client focus • Adaptability and fl exibility • Flexibility, including openness to potential geographic relocation • Teamwork and collaboration • Focus on quality and best practices Candidates interested in this opportunity must respond by Friday, January 29th, 2010 Only applications submitted via email will be accepted. Please forward your resume to job.competitions@lao.on.ca. Be sure to quote the following competition number in the subject line: LAO-004-10 Only those candidates selected for an interview will be notifi ed. Legal Aid Ontario is an equal opportunity employer. Legal Aid Ontario values integrity, respect, responsiveness, excellence, independence, accountability, openness and consistency. LegalAid_LT_Jan25_10.indd 1 www.lawtimesnews.com The Town of Kingsville offers an attractive benefit package. Salary will be com- mensurate with qualifications. Applicants are invited to submit a confidential cover letter and resume including the completed job application form, marked "Private & Confidential" no later than Friday, February 5, 2010. Completed application forms will be accepted by regular mail, personal delivery or email to: E-mail: ddigiovanni@kingsville.ca Human Resources Department Town of Kingsville 2021 Division Road North, Kingsville, Ontario N9Y 2Y9 We thank all applicants for their interest. Only those applicants selected for further consideration will be contacted. Personal information is collected in accordance with the Municipal Freedom of Information and Protection of Privacy Act for the purpose of candidate selection. 1/21/10 9:12:24 AM areerAd_LT_Jan25_10.indd 1 1/20/10 12:18:10 PM corporate financing set to mature in 2013-14, billions of dollars worth of debt will need to be re- placed, he added. "There's still a lot of work for companies to be done to refinance and reposition themselves." In capital markets, it was also a tumultuous year but one that panies repayed billions in funds handed out under the Troubled Asset Relief Program, the U.S. government's response to the subprime mortgage crisis. As well, Canadian equity is- suers, including most banks, were able to generate substantial proceeds, Foley said. However, some of the great- est changes that hit corporate America relate to corporate gov- ernance in response to the risks that financial institutions ex- posed themselves to in the years leading up to the collapse. "In the aftermath of the finan- cial crisis in the United States, everybody that could started talking about corporate gover- nance," said another Paul Weiss partner, Edwin Maynard. Activist shareholders also be- gan asserting greater influence on boards, he added. "Boards have to be on top of these issues. Over three times the number of directors lost their re- elections this year than in the pre- vious year. And we have majority voting to thank for that." In addition, in a shift of power to institutional shareholders, brokers, who historically have voted in favour of management's proposed slate of directors, have essentially found themselves pro- hibited from having their say on the matter. "That will affect many of your clients to the extent they're listed in the U.S," Maynard said. "It applies to any company whose shares are traded in the U.S." LT CAREERS Photo: Tim Shufelt

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• Leader Passes Away
• Traffic Woes
• Focus On Mergers and Acquisitions