Posted May 27, 2014 12:10 pm CDT
Meet Squire Patton Boggs, one of the 25 largest law firms in the United States.
The merger of Squire Sanders and Patton Boggs will take effect on June 1, according to a press release. The merged firm will have nearly 1,600 lawyers spanning 45 offices in 21 countries around the world.
The merger helps Patton Boggs amid dropping revenues, a declining headcount and its involvement in a difficult environmental case, report the New York Times DealBook blog and the Wall Street Journal (sub. req).
Two sources told the Wall Street Journal that Patton Boggs’ lenders had refused to renew Patton Boggs’ revolving line of credit for this year. In late February, Patton Boggs chairman Thomas Boggs Jr. and managing partner Edward Newberry told partners they would suspend their draws and asked others to follow suit, the newspaper says. As the firm consulted restructuring advisers, Boggs and Newberry contributed $3.5 million to help keep the firm afloat during a forbearance agreement with the banks, the story says.
Meanwhile Patton Boggs obtained a pledge from 90 percent of its partners to stay.
The merged firm will assume $8.6 million in Patton Boggs’ debt and other liabilities, the Wall Street Journal says.
The merger was announced on Friday, a day after Squire Sanders temporarily suspended a merger vote because of a legal filing challenging Patton Boggs’ withdrawal from an environmental case in which it was helping a lawyer collect a $9.5 billion Ecuadorian judgment he obtained against Chevron.
After a federal judge ruled the verdict was “obtained by corrupt means,” Patton Boggs agreed to withdraw from the case and to pay Chevron $15 million. The plaintiffs’ lawyer alleged in a court filing last week that Patton Boggs withdrew without first informing the plaintiffs; the firm responded that it had acted ethically.
Squire Sanders made an overture to Patton Boggs while the latter firm was negotiating with another potential merger partner, Locke Lord, the Wall Street Journal says. When those negotiations ended, negotiations between Squire Sanders and Patton Boggs got underway with a secretive meeting of the firms’ leaders at an Italian restaurant. Newberry entered through the kitchen, while Boggs and Squire Sanders chairman James Maiwurm paced their entrances to arrive at different times, according to the newspaper.
Maiwurm will lead the merged firm until next year, when Squire Sanders chairman-elect Mark Ruehlmann becomes chairman.