Good morning. There’s one group that stands to benefit from the crash of several major players in the crypto industry: bankruptcy lawyers. Plus, the DOJ wants an independent investigation into the collapse of one of those players, FTX. And the 11th Circuit cuts off the special master in the Mar-a-Lago case with a sharply-written opinion. We’re here. It’s Friday. We made it.
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Bankruptcy lawyers stand to be among the biggest winners amid the tumult of the cryptocurrency industry, rattled as major exchanges have faltered and the value of digital assets have tumbled, our colleague Andrew Goudsward reports. Firms can easily rake in more than $100 million in legal fees during a long-running bankruptcy, legal experts said.
Kirkland & Ellis is representing BlockFi in its bankruptcy proceedings and is also lead counsel for crypto lenders Celsius Network and Voyager Digital, which both filed for bankruptcy earlier this year. Kirkland commands some of the highest billing rates in the industry, charging between $1,135 and $1,995 per hour for work by its partners on the Celsius and Voyager cases, according to court filings. Sullivan & Cromwell, which has billed upwards of $1,825 an hour in some bankruptcy matters, is advising FTX in its bankruptcy.
“You’ve got to pay the gravedigger,” bankruptcy law expert Adam Levitin, who teaches at Georgetown University, said. “These are complicated cases with a bunch of novel issues, and it shouldn’t be surprising that they are going to require a lot of attorney involvement.” Kirkland and Sullivan did not respond to messages seeking comment.
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Access 2 x CLE webinars, the Thomson Reuters Legal Department Operations (LDO) Index report 2022, and 3 x Legal Leaders podcast episodes. |
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The nomination of abortion rights lawyer Julie Rikelman to serve on the Boston-based 1st Circuit hit a snag in the Senate Judiciary Committee, which deadlocked in an 11-11 vote along party lines on whether to advance her for further consideration. The evenly-divided panel means that Rikelman will face an additional procedural hurdle before any final vote in the full U.S. Senate on her nomination. (Reuters)
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Paul Hastings partner Luc Despins has asked a Connecticut bankruptcy judge to sanction Chinese businessman Guo Wengui for allegedly directing smear campaigns against him while he serves as the Chapter 11 trustee of Guo’s estate. The judge has already ordered Guo to stop inciting his supporters against Despins, but Despins told the court that Guo and his followers "have continued unabated." (Reuters)
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Under Armour is pressing its bid to enforce a subpoena a Wilson Sonsini partner for information about his partial ownership in an enterprise suing the sportswear giant in Pittsburgh federal court. The attorney, Stu Williams, contends Under Armour’s subpoena is too broad and overly burdensome. (Reuters)
- Baltimore-founded Offit Kurman will gain its first West Coast office through a combination with Los Angeles firm Clark & Trevithick. Offit gains 14 lawyers, giving the firm 280 overall. (Reuters)
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That’s how much in damages a proposed class action against the Uvalde, Texas, school district and police department is seeking. The lawsuit is brought on behalf of students, parents, teachers and administrators who allege emotional and psychological harm after the May 24 mass shooting at Robb Elementary School. The proposed class, which does not include the victims of the shooting or their families, accuses the district and police of failing to follow their own protocols in responding to the shooter. A spokesperson for the city of Uvalde said the city had not been served with the lawsuit and would not comment on pending litigation.
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Here's a million-dollar tip for class action lawyers from columnist Alison Frankel: If your settlement agreement delivers minuscule recovery to your clients, make sure they can at least get that recovery in cash. That's the lesson, Frankel writes, of a ruling on Wednesday from the 9th Circuit, which affirmed a $5.7 million fee award for class counsel in a $32.5 million settlement with Uber Technologies. The appeals court conceded that the outcome was not exactly a rousing victory for the 22.4 million Uber riders in the class, the vast majority of whom will initially receive Uber account credits averaging $1.07. But because there’s an option for the class to receive that trifling amount in cash, plaintiffs lawyers at Ahdoot & Wolfson can hang onto their millions.
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"To create a special exception here would defy our Nation’s foundational principle that our law applies ‘to all, without regard to numbers, wealth, or rank.’" |
—11th Circuit Chief Judge William Pryor, sitting with Circuit Judges Britt Grant and Andrew Brasher, in a ruling that reversed a Florida federal judge's appointment of a special master to vet documents the FBI seized from former President Donald Trump's Florida home. The judges said in their ruling that “we cannot write a rule that allows any subject of a search warrant to block government investigations after the execution of the warrant,” adding: "Nor can we write a rule that allows only former presidents to do so." Trump is likely to appeal the action to the U.S. Supreme Court.
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Legal experts discuss the rare verdict reached by the jury that convicted Oath Keepers founder Stewart Rhodes for his role in the Jan. 6 attack. Featuring: law professors Carlton Larson of UC Davis, Timothy Zick of William & Mary University and Alan Rozenshtein of the Univ. of Minnesota. |
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Closing arguments are expected to resume in the New York state court criminal tax fraud prosecution of former President Donald Trump's real estate company. On Thursday, prosecutors described a culture of wrongdoing at the Trump Organization, while the defense blamed the greed of the government's star witness. Justice Juan Merchan has presided over the trial, which began on Oct. 24. Jury deliberations are set to start on Monday.
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The 7th Circuit is set to hear arguments in a case challenging an Indiana state law barring corporate contributions to political action committees that are meant for independent expenditures – in other words, spending that advocates for a candidate or cause without coordination with that candidate or political party. The Indiana Right to Life Victory Fund, represented by James Bopp Jr, sued to throw out the law because it is seeking to accept donations for independent expenditures, but a district court dismissed the lawsuit after finding there was no risk of enforcement of the law because the U.S. Supreme Court’s ruling in Citizens United protects unlimited donations to independent expenditure-focused political action committees.
Court calendars are subject to last-minute docket changes.
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What to catch up on this weekend
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WilmerHale scored a win for Gilead in a Federal Claims court case against the U.S. government, found to have broken agreements with the drugmaker when the CDC applied for patents related to the use of Gilead drugs to prevent HIV. The court’s opinion could strengthen Gilead's defense in a separate patent-infringement lawsuit in Delaware where the U.S. is seeking more than $1 billion in damages from the pharmaceutical giant over an HIV drug regimen. (Reuters)
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Federal prosecutors are seeking a 15-year prison term for former Theranos President Ramesh "Sunny" Balwani for defrauding investors and patients in the blood-testing startup once led by Elizabeth Holmes. Last month, a judge sentenced Holmes to more than 11 years in prison for her role in the fraud scheme. Holmes is expected to appeal her conviction and sentence. (Reuters)
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The American Medical Association, American Cancer Society and other national medical groups urged a federal judge in Texas not to interfere with free access to preventive health care services under the Affordable Care Act. The groups said U.S. District Judge Reed O'Connor should not issue a nationwide order invalidating the work of a federal task force that decides which preventive services should be covered under ACA plans at no cost to patients, even though he found in September that the task force was illegally appointed. (Reuters)
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CarMax, the largest U.S. used car retailer, agreed to pay $1 million to resolve claims by 36 states that it failed to disclose open safety recalls to consumers before selling vehicles to them. The settlement followed a multistate probe led by Illinois Attorney General Kwame Raoul that began in 2014. (Reuters)
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Fried Frank added London-based partner Rachel Wolfenden, who focuses on private equity and mergers and acquisitions. She joins the firm from Kirkland. (Reuters)
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Baker Botts hired Lewis Zirogiannis as a Dallas-based litigation partner from Foley & Lardner. (Reuters)
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Akin Gump brought on energy partner Emily Mallen in the firm’s Washington, D.C., office. She was previously at Sidley Austin. (Akin Gump)
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King & Spalding said Amelia Medina joined the firm’s Washington, D.C., office as a special matters and government investigations partner. She was deputy chief of staff at the FBI and earlier served as senior counsel in the office of the DOJ’s deputy attorney general. (King & Spalding)
- Fox Rothschild picked up partner Juliana Neelbauer, who is joining the firm’s Atlanta office and its corporate department. Neelbauer previously led the intellectual property practice at Drew Eckl & Farnham. (Fox Rothschild)
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Husband-and-wife team Jenny Kim and Michael Fay joined Boies Schiller’s New York office as partners. The pair was previously at Berg & Androphy.
>> More moves to share? Please drop us a note at LegalCareerTracker@thomsonreuters.com.
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