Depending on the opportunity or challenge facing our clients, we bring together partners, technical experts and legal capabilities across our 19 offices to deliver tailored, commercially savvy solutions.
Maintaining its independence, data center giant Global Switch plugged in to a rapidly growing customer base.
Client Interest
Aldersgate Investments Ltd. sought to grow its investment in European data center giant Global Switch, of which it was the sole shareholder. By entering into a joint ownership agreement with Chinese investors, Global Switch could gain profitable access to the rapidly growing Asia-Pacific telecommunications and ISP markets.
Leveraging the K&S Platform
Mergers & Acquisitions partner William Charnley led a 10-person team out of London, coordinating capabilities in M&A, finance, employment, employee benefits, tax and real estate to advance Aldersgate’s interests over the course of 12 months. We advised AIL on the terms and executed the sale of a 49% stake in Global Switch to Elegant Jubilee Ltd., a high-quality Chinese investor consortium, for £2.4 billion.
Commercial Solution
While maintaining its managerial and operational independence through the joint ownership structure, Global Switch gained access to Asia’s fast-growing telecom and ISP customer base. Major revenue-generating pre-commitments in Singapore and Hong Kong support asset and revenue diversification, and Elegant’s existing relationships with major Chinese banks broaden Global’s lending base.
Setting an actionable precedent, Google twice defeated patent-infringement claims by nonpracticing entities.
Client Interest
In two matters resolved in 2016, Google sought to defeat claims of patent infringement by nonpracticing entities. In the first, Google and its customers were accused of infringing GeoTag’s patent on a method of conducting a geographic search. In the second, Google, Facebook and AOL were accused of infringing Priceplay’s patent on a method of setting prices.
Leveraging the K&S Platform
Our team handled the Federal Circuit appeals in both matters. Appellate and Intellectual Property specialists from our Washington, D.C., and Charlotte offices collaborated to analyze the cases and prepare the briefs, and Appellate partner Daryl Joseffer presented oral argument to the court.
Commercial Solution
In the first case, the Federal Circuit rejected GeoTag’s challenge to the district court’s jurisdiction and confirmed that Google’s online advertising platform did not infringe GeoTag’s patent. In the second case, the Federal Circuit held that Priceplay’s patent was invalid because it claimed no more than an abstract idea. Both outcomes were important wins for Google. The rulings will also help other companies defeat patent-infringement claims by nonpracticing entities, which present a continuing challenge for technology companies and other innovators.
Through a synchronized fund and JV platform, Germany’s HANSAINVEST accessed U.S. real estate margins.
Client Interest
HANSAINVEST Hanseatische Investment-GmbH sought to create a vehicle through which German institutional investors could invest profitably in U.S. residential real estate.
Leveraging the K&S Platform
Drawing on capabilities in real estate, finance and tax across our Frankfurt, New York and London offices, we assisted HANSAINVEST in setting up HANSA US Residential as a German investment fund and U.S. joint venture platform with U.S.-based Bell Partners, Inc. An open-ended institutional real estate investment fund with an initial target investment volume of $1 billion, the fund is designed to operate under German regulatory laws. In an uncommon combination, we were able to advise on the fund formation itself, the setup of the joint venture platform and its entities, and the transactions on behalf of the fund. As a result, the fund and transactions were structured from the beginning to be consistent with both the fund platform’s structure and German regulatory requirements.
Commercial Solution
The managing director of HANSAINVEST, Nicholas Brinckmann, cited Bell Partners’ market access and overall expertise in the U.S. multifamily residential sector as a particular strength of this deal. Brinckmann also noted the favorable economic and demographic fundamentals of Bell’s target locations, as well as the benefit for German investors of the U.S. legal framework regarding rent-increase intervals.
Amid a spate of multimillion-dollar plaintiff verdicts, Johnson & Johnson Consumer, Inc. protected its cornerstone consumer product.
Client Interest
Johnson & Johnson Consumer, Inc., and its parent company Johnson & Johnson sought to disprove allegations that a plaintiff, Jesus Payan, had developed mesothelioma as a result of exposure to its flagship consumer product, Johnson’s Baby Powder.
Leveraging the K&S Platform
In the first such case in the U.S. against Johnson & Johnson to go to trial, our Product Liability team achieved a litigation win for our clients, assembling a strong defense, including powerful evidence that the Italian talc mine from which our client sourced its talc was free from asbestos. After voir dire, and our client’s decision that it would not pay any money on the case, the plaintiffs dismissed Johnson & Johnson for $0.
Commercial Solution
With a number of recent multimillion-dollar verdicts going against consumer talc product manufacturers and distributors other than Johnson & Johnson, involving living mesothelioma plaintiffs, it was important to defend this case vigorously to the end.
Well-positioned for a later IPO, Jounce Therapeutics entered a nuanced strategic partnership with Celgene.
Client Interest
Early stage biotech Jounce Therapeutics, launched by Third Rock Ventures in 2013, sought a strategic collaboration with a large, sophisticated biopharmaceutical to fund the co-development and co-commercialization of Jounce’s immuno-oncology drug candidates. Amid concerns in early 2016 of a biotech bubble in the capital markets, an IPO at that time was considered risky.
Leveraging the K&S Platform
In one of the largest biotech partnering deals of 2016, partner Tom Duley and senior associate Stephen Abreu coordinated a cross-firm effort to structure and negotiate a strategic collaboration with Celgene Corporation, including advancing Jounce’s interests related to the deal’s tax, intellectual property, regulatory and antitrust aspects.
Commercial Solution
By structuring the deal as a series of options for Celgene to acquire licenses to discrete drug development programs, Jounce was able to achieve multiple goals: raise sufficient capital to advance its drug development programs; validate its technology platform; and retain sufficient autonomy and product rights to attract future investors. Jounce received $225 million up front, and is eligible to receive up to $2.3 billion in option-exercise fees and development, regulatory and commercial milestones across all programs that reach commercialization.
This partnering strategy enabled Jounce to start human clinical trials of its lead drug candidate the following month and laid the foundation for its successful 2017 IPO. “We could not have completed the agreement without King & Spalding. Their constructive approach and calm demeanor, particularly with opposing counsel, was a huge asset,” stated Jigar Raythatha, former Chief Business Officer of Jounce Therapeutics.
In a cross-border standoff, Passport Special Opportunities Master Fund, L.P. opened multiple payment routes.
Client Interest
California investment firm Passport Special Opportunities Master Fund, L.P., sought to recover an arbitration award issued by the Singapore International Chamber of Commerce against Pakistani media company ARY Communications Ltd. and individuals affiliated with that company arising out of an investment funding arrangement. ARY withheld and contested payment of the award, which had been issued after a full arbitration hearing.
Leveraging the K&S Platform
Combining innovation with expertise, K&S International Arbitration partners in New York, Dubai, London and Singapore led the coordinated pursuit of payment. When ARY moved to block recovery of the award by a federal court in New York, we obtained a judgment from the Singapore courts and ultimately obtained recognition and enforcement of the Singapore judgment.
Commercial Solution
Sending a message of resolve, Passport obtained prejudgment security from the New York trial court, which granted attachment against ARY assets located in the state. Passport also seized payment obligations owed to ARY by a New York–based LLC in which ARY maintains an interest, and sought to pierce the corporate veils of other New York–based businesses. We commenced parallel enforcement proceedings in Dubai to maintain pressure on ARY to comply with its obligation to Passport, paving multiple routes to compulsory payment.
Amidst a high-level, multibillion-dollar corruption scandal, PwC Brasil protected its reputation and business.
Client Interest
PricewaterhouseCoopers Auditores Independentes, or PwC Brasil, sought to defend its professional reputation amid a historic corruption investigation of its audit client, state-controlled energy giant Petroleo Brasileiro SA—Petrobras. The investigation by Brazilian prosecutors focused on allegations that a cartel of construction companies paid billions of dollars in bribes to win tens of billions of dollars in Petrobras contracts. As Petrobras’ auditor, PwC was accused in U.S. litigation of fraud and negligence by class action plaintiffs.
Leveraging the K&S Platform
Government and Congressional Investigations partner Michael Pauzé joined forces with Professional Liability partner James Capra to defend against the securities class action and individual actions arising from the investigation. King & Spalding fielded a team spanning multiple offices and three practice groups seasoned in defending Big Four clients in enterprise-threatening litigation and investigations. Our lawyers won the dismissal of more than a dozen theories of liability against our client, including knocking out class plaintiffs’ lead securities fraud claim, leaving a single remaining claim.
Commercial Solution
This sprawling, multibillion-dollar corruption scandal, which led to the indictment of the country’s former president and dozens of other high-level Brazilian politicians, has shaken the country’s commercial and political foundation. Amid this national turmoil, PwC Brasil’s professional reputation and business remain strong.
In a multiyear battle, KBR subsidiary COMMISA prevailed in Benchmark Litigation’s Impact Case of 2016.
Client Interest
KBR subsidiary COMMISA sought to recover a more than $400 million International Chamber of Commerce arbitration award first secured by King & Spalding and later annulled by a Mexican court. The original award was rendered following a contract dispute between COMMISA and a subsidiary of Pemex, Mexico’s state-run energy entity, regarding the engineering, design and construction of offshore oil platforms.
Leveraging the K&S Platform
Drawing on cross-office expertise in international arbitration and cross-border litigation, partner Rich Marooney spearheaded the enforcement of the annulled arbitral award in the Southern District of New York. In a three-day evidentiary hearing, a Manhattan judge confirmed the original arbitration award in favor of COMMISA and later entered judgment against Pemex for a combined total of more than $465 million. In 2016, the Second Circuit Court of Appeals affirmed the trial court’s decision.
Commercial Solution
COMMISA collected on the arbitral award and was made whole for the good work it did for Pemex. The win protects the integrity of the arbitral process and shows that U.S. courts need not defer to foreign court decisions that offend basic notions of justice and fairness. COMMISA v. Pemex received Benchmark Litigation’s Impact Case Award for 2016, and Rich was named General Commercial Lawyer of the Year for the win.
In a hybrid whole business securitization of Taco Bell Corp., major investment banks profited from innovation.
Client Interest
Three major investment banks, as joint lead managers, sought to structure the issuance and sale of a series of term notes and revolving notes backed by the domestic franchise assets and related domestic intellectual property of Taco Bell Corp., a wholly owned subsidiary of YUM! Brands, Inc.
Leveraging the K&S Platform
We coordinated cross-firm expertise in finance, capital markets, tax, intellectual property and restructuring to structure the issuance and sale of $100 million in Series 2016-1 senior secured revolving notes and $2.3 billion in Series 2016-1 senior secured term notes. The resulting transaction was the largest restaurant “whole business” securitization of 2016; the first done in combination with a parallel bank / bond structure; and one that permitted the maintenance of YUM! Brands, Inc.’s existing capital structure.
Commercial Solution
In addition to the deal’s innovative structure, our clients benefited from the Series 2016-1 senior secured term notes being upsized by $300 million from the initial proposed offering of $2 billion, and from pricing on the notes below the original guidance range. The structure received considerable attention as a model for similarly structured transactions going forward. In addition, King & Spalding was recognized at the 2016 Financial Times North America Innovative Lawyers Awards for developing “hybrid–whole business securitization” technology.