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The DOJ’s bankruptcy watchdog said that genetic test maker Invitae should not be allowed to hire Kirkland & Ellis as bankruptcy counsel because of the law firm’s work for one of Invitae’s lenders, reports Dietrich Knauth.
The Office of the U.S. Trustee said in a court filing that Kirkland has a conflict of interest because one of its current clients is private equity firm Deerfield Partners, which is Invitae’s top lender and the “main beneficiary” of a 2023 debt restructuring that placed Deerfield at the front of the line for repayment in Invitae’s bankruptcy.
Kirkland, which has said it represents Deerfield in matters “unrelated” to Invitae’s bankruptcy, did not represent Invitae at the time of the debt transaction. Deerfield is represented by separate counsel in Invitae’s bankruptcy case.
Kirkland, Invitae and Deerfield did not immediately respond to requests for comment.
Invitae filed for bankruptcy protection in February, seeking to find a buyer and reduce its $1.5 billion in debt. Invitae does not expect equity shareholders to receive any recovery in its bankruptcy, according to court documents.
Kirkland runs one the country’s busiest bankruptcy practices, and the Chicago-founded firm is among the top in the U.S. overall for gross revenue. The firm showed revenue of $6.5 billion in 2022, with more than 3,400 lawyers, according to The American Lawyer.
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- Winston & Strawn settled an unusual copyright lawsuit from a much smaller law firm that claimed Winston’s attorneys copied one of its court filings “nearly verbatim.” Hsuanyeh Law Group settled its case against Winston, but neither side revealed the terms of the deal. The lawsuit marked a rare copyright-infringement case over court filings.
- U.S. Supreme Court Justice Clarence Thomas returned to the bench on Tuesday, a day after he missed arguments in two cases with no explanation offered by the court. Thomas, 75, is the oldest and longest-serving member of the court.
- Knight Specialty Insurance, the company that provided Donald Trump with a $175 million bond in his New York civil fraud case, said it had “substantial financial credibility,” and rejected a suggestion by the state’s attorney general that it wasn’t qualified to provide help. The company said the bond was fully backed by cash in a Charles Schwab account and that it could access nearly $2.2 billion of assets at its parent company if something went wrong.
- The SEC moved to drop a lawsuit in Utah federal court against blockchain technology firm Digital Licensing after a judge excoriated the agency last month for what he called a “gross abuse of the power entrusted to it by Congress.” Chief District Judge Robert Shelby said the SEC acted in “bad faith” and was “deliberately perpetuating falsehoods” in its efforts to obtain an asset freeze and a temporary restraining order against the company. The SEC this week said it “wants to ensure that its allegations are fully supported by the record before proceeding with the litigation.”
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That’s the number of state attorneys general participating in a partnership with the U.S. Department of Transportation to fast-track investigations into complaints against airlines and ticket agents. State attorneys general receive consumer complaints, but airlines are not legally required to respond to their inquiries. Under the partnership, U.S. Secretary of Transportation Pete Buttigieg said participating states, including California, Nevada, New York and Colorado, will investigate complaints against airlines and refer them to the DOT for priority review and enforcement action. Seven more states are interested in joining the initiative.
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A long-awaited decision issued on Monday by the 7th Circuit could make it easier for companies involved in M&A deals to fight back against shareholder suits demanding beefed-up disclosures in proxy filings. The appeals court, writes Alison Frankel, questioned the business model of shareholder firms that file lawsuits challenging M&A proxy disclosures and then dismiss their suits when defendants agree to make additional disclosures and pay shareholder lawyers a mootness fee. Will the new ruling prompt judges to start scrutinizing “deal tax” lawsuits more rigorously?
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“Judges are supposed to follow the law, not distort the rules to avoid criticism.“
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—5th Circuit Judge James Ho, who argued in a speech that judicial policymakers wrongly caved to political pressure to curtail “judge shopping” with a policy change that would deter right-leaning litigants from steering cases to preferred judges. Ho, in a speech delivered to the Midland County Bar Association in Texas, argued that the U.S. Judicial Conference’s new judicial assignment policy undercut the judiciary’s independence by giving into critics engaged in “forum shaming.”
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- The U.S. Senate Judiciary Committee will hold a hearing where several of President Joe Biden’s judicial nominees are expected to testify and take questions. The nominees include U.S. Attorney Kevin Ritz in Tennessee for the 6th Circuit; federal prosecutor Jeannette Vargas for the Southern District of New York; and Judge Rebecca Pennell of the Washington Court of Appeals for the Eastern District of Washington federal bench. Watch the hearing here.
- The Senate Permanent Subcommittee on Investigations will hear testimony from a Boeing whistleblower and company engineer Sam Salehpour who claims it dismissed safety and quality concerns in the production of 787 and 777 jets.Senator Richard Blumenthal, the panel’s chair, said Salehpour will testify about what the senator called “Boeing’s broken safety culture.” Blumenthal has also asked outgoing CEO Dave Calhoun to testify at a future hearing.
- “Bowie Bonds” creator David Pullman’s Structured Asset Sales will ask the 2nd Circuit to revive a copyright lawsuit based on similarities between Ed Sheeran’s hit “Thinking Out Loud” and Marvin Gaye’s classic “Let’s Get It On.” A Manhattan federal judge dismissed SAS’ lawsuit following a win for Sheeran in a jury trial over related claims from the heirs of “Let’s Get It On” co-writer Ed Townsend.
- In D.C. federal court, U.S. District Judge Randolph Moss will weigh 7-Eleven’s request to dismiss an FTC lawsuit that accused the convenience store chain of violating a 2018 consent order by acquiring a fuel outlet in Florida without first notifying the agency. 7-Eleven’s attorneys at Jones Day and Akin contend the agency is acting outside the scope of its power in bringing a lawsuit and are seeking up to $77 million in civil penalties.
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Court calendars are subject to last-minute docket changes.
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- In a 2-1 ruling, the 4th Circuit held that a transgender middle-school girl in West Virginia can compete in her school’s girls’ track and cross-country teams, blocking enforcement of a state law against her. The court found that the law, which prohibits any transgender girls from playing on girls’ sports teams, would illegally discriminate against Becky Pepper-Jackson, a 13-year-old who has publicly identified as transgender for about five years and takes puberty-blocking medication.
- Eight U.S. consumers asked a U.S. judge to stop Alaska Air’s $1.9 billion acquisition of rival carrier Hawaiian, a deal they alleged would lead to higher prices and fewer flights. The plaintiffs filed their complaint in Hawaii federal court. The proposed transaction, announced last year, is under antitrust review at the DOJ.
- Former DraftKings executive Michael Hermalyn in court denied stealing the company’s trade secrets or soliciting its employees after he joined sports betting rival Fanatics, saying he “operated with extreme caution” while leaving his post. But Hermalyn’s testimony before a federal judge in Boston was quickly undercut by conflicting testimony by two DraftKings employees who said he extended them multi-million dollar pay packages to follow him to Fanatics.
- Smartmatic has settled a lawsuit accusing right-wing television network One America News of defamation by falsely claiming that the voting technology company rigged the 2020 U.S. presidential election to help Joe Biden beat Donald Trump. Terms of the settlement are confidential, Smartmatic’s lawyer Erik Connolly said, but the company voluntarily dismissed its lawsuit filed in 2021 against OAN in Washington, D.C.
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- McGuireWoods added securities and capital markets partner Carly Ginley in the firm’s Charlotte, North Carolina, office. Ginley was previously at Winston & Strawn. (McGuireWoods)
- Norton Rose Fulbright added Patrick Harder in Los Angeles as U.S. co-leader of infrastructure. Harder was previously at Nossaman. (Norton Rose)
- Seyfarth Shaw added three labor and employment attorneys from Morgan Lewis, including partner Clifford Sethness, who is based in Los Angeles. (Seyfarth)
- Manatt hired New York-based partners Schuyler Carroll and Jessica Sklute. Carroll, who focuses on bankruptcy, restructuring and transactional matters, was previously at Loeb & Loeb. Sklute, previously at Schulte Roth, focuses on consumer financial services. (Manatt)
- Lathrop GPM brought on litigator Mike Piazza as a Dallas-based partner. Piazza was previously at Ford O’Brien. (Lathrop GPM)
- Barnes & Thornburg brought on litigation partner Nicholas Sarokhanian in Minneapolis from Holland & Knight. (Barnes & Thornburg)
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Diversity programs are under attack in the wake of the U.S. Supreme Court’s ruling on affirmative action, and there is evidence that law firm layoffs are disproportionately impacting associates who are people of color, writes Kate Reder Sheikh of Major, Lindsey & Africa. Here’s what firms can do to bring in and retain diverse lawyers.
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