Third Law Firm that Turned Down Treasury Role Identified

Legal Ethics

Third Law Firm that Turned Down Treasury Role Identified

Posted Oct 15, 2008, 05:46 am CST
By Debra Cassens Weiss

Four law firms declined to pursue work as the Treasury Department’s adviser on acquiring ownership stakes in banks, and now three have been identified.

The latest firm to confirm it opted to pass up a chance to do the work is Cleary Gottlieb Steen & Hamilton, the American Lawyer reports. The others are Davis Polk & Wardwell and Wachtell, Lipton, Rosen & Katz.

While Davis Polk turned down a role advising the Treasury, it did counsel Treasury's partner—the Federal Reserve Bank of New York—on the bailout plan, the Am Law Daily reports. The story says Davis Polk worked with Simpson Thacher to craft the capital injection plan over the weekend.

Davis Polk partner Randall Guynn told the Am Law Daily the law firm worked to make sure Treasury’s equity purchases would not discourage private sector capital or dilute too much the shares of existing stakeholders.

The Treasury Department had asked six law firms for proposals on counseling it on acquiring ownership stakes in banks, but only two submitted proposals. The department selected Simpson Thacher & Bartlett to perform the work.

Client conflicts apparently played a role. Davis Polk advised Citigroup in its failed bid to buy Wachovia. Wachtell has long represented Bank of America and advised it in its buyout of Merrill Lynch. Citigroup and Bank of America are among nine financial institutions in which the Treasury will buy equity stakes.

One lawyer from a firm that turned down the work told American Lawyer about conflicts concerns. "The Treasury procurement process was pretty inflexible," he told the publication. "This is prime work, but we were unable to obtain sufficient comfort that we would be able to represent our regular clients on the program, even with separate teams, if we bid for the Treasury assignment."

Simpson Thacher chairman Richard Beattie doesn’t share those concerns. His firm represents one of the nine banks, JPMorgan Chase. He told American Lawyer there was no pressure from Treasury about dropping clients.

"They did not say that," he told the magazine. "It's ridiculous. We represent JPMorgan Chase and would not give up a client like that."

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Posted by Ellen Barshevsky - 1 month, 2 weeks, 1 day, 7 hours, 30 minutes ago

My lawfirm was NOT EVEN ASKED to work on the bailout laws.

Mabye thats a good thing because I dont know anything about banking lawss, and my boyfriend says that BERNANKE making it all up as they go along anyways. He only has an accounting degree, but I have a JD.

I say you MUST follow the federal statuets as the apply, and that you CANNOT ignore the US Code Annotated. My boyfriend thinks that is NOT what is going on, but he did not take Fed Jurisdiction with Professor Jones like I did.

I remember Professor saying that ther must be COMPELETE DIVERSITY to have jurisdiction, and I do NOT think there is that in the administration. Therefore we cannot have a FEDERAL case, and it MUST be dismissed.

I
Posted by AC - 1 month, 2 weeks, 1 day, 6 hours, 43 minutes ago

Uh, yeah… I don’t UNDERSTAND why you weren’t ASKED to author the nation’s BAILOUT “lawss”. Heh, I’m not even being sarcastic when I speculate that you could have done better.
Posted by i love ellen b - 1 month, 2 weeks, 1 day, 5 hours, 31 minutes ago

ellen b., i’ll bail you out baby, if you leave that loser boyfriend of yours.
Posted by CBH - 1 month, 2 weeks, 1 day, 5 hours, 19 minutes ago

I don’t understand the significance of the capital letters/words. Are they conveying a special meaning or just a stuck caps key? Regardless, Ellen, I would love to hear what you think as opposed to your boyfriend.
Posted by Ellen Rules - 1 month, 2 weeks, 1 day, 2 hours, 46 minutes ago

Ellen, I just got off a call with Treasury. They’re going to call you today. For the sake of our country, PLEASE accept the engagement. (Bernanke will call your boyfriend to get the ok, so don’t worry about that.)
Posted by Fanclub President - 1 month, 2 weeks, 1 day, 2 hours, 5 minutes ago

Perhaps we need a wesite for the Ellen Barshevsky fanclub?
Posted by LCW - 1 month, 2 weeks, 1 day, 55 minutes ago

Ellen, this has nothing to do with the federal court’s jurisdiction over any lawsuit that may be filed. It has to do with the applicable rules of ethics, specifically those discussing conflicts of interest. Your boyfriend should have told you that.
Posted by Ellen Still Rules - 1 month, 2 weeks, 23 hours, 36 minutes ago

Ellen, don’t pay any attention to that troglodyte. It IS ABOUT diversity jurisdiction. But Ellen, I think it’s ok, because Bernanke is from academia and Paulson is from investment banking. So, there is diversity.
Posted by the BOYfriend - 1 month, 2 weeks, 23 hours, 17 minutes ago

I’d appreciate it if you could focus on the QUALITY of the commentary and not the AVAILABILITY of the commenter. It’s taken A LOT of effort and TRAINING to produce such a SOPHISTICATED analytical mind.

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