Litigation and Enforcement During and After COVID-19
Marc Wolinsky Carrie Reilly Emil Kleinhaus Elaine Golin John Savarese
June 12, 2020
1 S&P 500 Performance
3500
3350
3200
3050
2900
2750
2600
2450
2300
2150
2000
2 Spike in Jobless Claims due to COVID-19
As of May 28, 2020
3 Business Impact of COVID-19
4 Litigation and Enforcement During and After COVID-19
Marc Wolinsky Carrie Reilly Emil Kleinhaus Elaine Golin John Savarese
June 12, 2020
5 Chapter 11 After COVID-19
6 The Pier 1 Decision (District of Delaware)
“The world has changed since the filing of these chapter 11 cases.”
“COVID-19 presents a temporary, unforeseen, and unforeseeable glitch in the administration of the Debtors’ Bankruptcy Cases.”
“The Debtors cannot operate as a going concern and produce the revenue necessary to pay rent because they have been ordered to close their business. The Debtors cannot effectively liquidate the inventory while their stores remain closed.”
7 “Retail cases have to move, and they have to move quickly.”
— Judge David R. Jones
Wachtell, Lipton, Rosen & Katz 8 Litigation and Enforcement During and After COVID-19
Marc Wolinsky Carrie Reilly Emil Kleinhaus Elaine Golin John Savarese
June 12, 2020
9 Coronavirus Aid, Relief and Economic Security Act
The CARES Act was signed into law on March 27, 2020 and provides $2 trillion in emergency relief to individuals, small businesses, large corporations, and financial institutions. The below highlights key portions of the Act:
Paycheck Protection Main Street Lending Foreclosure Moratoria and Program (PPP) Payment Forbearance for Established to support Federally Backed The PPP is a guaranteed, lending to small and Mortgages unsecured loan program medium-sized businesses that helps fund payroll and that were in sound financial Borrowers with 1-4 family other costs of eligible small condition before the onset of mortgages can receive up to businesses, nonprofits, and the COVID-19 pandemic. 360 days of forbearance. self-employed persons during the COVID-19 60-day moratorium on pandemic. foreclosures.
120-day moratorium on evictions.
10 PPP at a Glance
4.5M $511B $113K $130.7B
Number of loans Net dollars Average PPP Amount of funding given to date loaned to date loan size remaining
JPMorgan Chase Bank and Bank of America are the largest PPP lenders to date. JPMorgan has funded 256,978 loans totaling $28.6B; Bank of America has funded 325,853 loans totaling $24.9B.
11 Litigation and Enforcement During and After COVID-19
Marc Wolinsky Carrie Reilly Emil Kleinhaus Elaine Golin John Savarese
June 12, 2020
12 Business may not be proceeding at quite the same pace we have been used to, but enforcement is continuing.
Wachtell, Lipton, Rosen & Katz 13 Key Substantive Areas
DOJ/US Attorneys’ Offices Federal prosecutorsKey continue Substantive to focus on traditional enforcement Areas priorities including antitrust, anti-money laundering, and insider trading, but COVID-related fraud has been added to the mix.
SEC A massive surge in the number of whistleblower tips and the amount of whistleblower awards is bringing even more cases to the SEC’s attention.
State Attorneys General While State Attorneys General are still focused on “mass toxic tort” issues, COVID-related fraud will also be on the agenda.
14 Marc Wolinsky
Marc Wolinsky has been a member of the Litigation Department at Wachtell, Lipton, Rosen & Katz since 1987. His practice includes corporate governance, contracts, antitrust, insurance and securities litigation.
Marc has been involved in a number of the most significant litigation battles in the Delaware Court of Chancery, leading the successful defense of Airgas’ “poison pill” and the successful effort to force Dow Chemical to close on its acquisition of Rohm and Haas. He was the lead lawyer representing J.C. Flowers, Bank of America and JPMorgan Chase in litigation with Sallie Mae over whether Sallie Mae had suffered a material adverse change in its business and successfully defended multi-forum shareholder litigation challenging JPMorgan’s acquisition of Bear Stearns. Marc also has actively litigated derivative suits and securities class actions, and most recently represented Hewlett Packard in resolving derivative, class action and ERISA litigation resulting from its acquisition of Autonomy.
Following 9/11, Marc was a lead member of the team representing Larry Silverstein in insurance litigation arising out of the destruction of the World Trade Center and was a member of the trial team that convinced a New York jury that the attacks on the World Trade Center should be treated as two “occurrences” for insurance purposes. He then led the effort to settle the case, which resulted in what was reported to be the largest property insurance settlement in history. His Partner Litigation antitrust matters include the representation of General Mills in an FTC investigation of its acquisition of Pillsbury, the defense of Cardinal Health in the FTC P: 212.403.1226 challenge to its acquisition of Bergen Brunswig and the representation of Great Northern Nekoosa in its antitrust suit against Georgia Pacific. F: 212.403.2226 [email protected] As part of his pro bono work, Marc represented Joseph Steffan in his challenge to the ban on the service of gay men and women in the military, arguing the case to the D.C. Circuit sitting en banc. He successfully reversed the manslaughter conviction of Anthony Oddone in the New York Court of Appeals and submitted an amicus brief on behalf of the Innocence Project as part of the successful exoneration of a Louisiana death row inmate. Marc was the recipient of the 2017 Servant of Justice Award from the Legal Aid Society of New York.
Marc has argued appeals in the D.C. Circuit, the New York Court of Appeals and the Appellate Divisions of the New York State Supreme Court and has litigated in state, federal and bankruptcy courts around the country. He is admitted to practice in the State of New York, the United States District Court for the Southern and Eastern Districts of New York, the United States Courts of Appeals for the Second, Seventh, Ninth and D.C. Circuits and the United States Supreme Court.
Marc is recognized as one of the nation’s leading lawyers in his field by Chambers USA noting he is “renowned for his work litigating in the Delaware Court of Chancery.” He is recognized as a National Practice Area Star and a Local Litigation Star by Benchmark Litigation. Experts Guides includes Marc as a leading lawyer in its Best of the Best, Best of the Best USA and Litigation rankings. Marc is also recognized as one of the 500 leading lawyers in America by Lawdragon and an expert in Litigation by Who’s Who Legal.
Marc joined Wachtell Lipton after clerking for the Honorable Henry J. Friendly of the United States Court of Appeals for the Second Circuit from 1980 – 1981. He received his B.A. with high honors from Swarthmore College in 1977 and his J.D. with honors from the University of Chicago Law School. While in law school, he was a member of The University of Chicago Law Review and served as a Comment and Articles Editor. 15 John F. Savarese
John F. Savarese has been a partner in the Litigation Department of Wachtell, Lipton, Rosen & Katz for the past 25 years. He has represented numerous Fortune 500 corporations, major financial institutions and senior executives in SEC and other regulatory enforcement proceedings, as well as white-collar criminal investigations, complex securities litigations, and internal investigations. His extensive experience includes major investigations arising out of the financial crisis of 2008, as well as accounting fraud, insider trading, criminal tax, and criminal antitrust allegations.
Mr. Savarese joined Wachtell Lipton in 1988, after working in the United States Attorneys’ Office for the Southern District of New York, where he tried numerous jury trials, received the Attorney General’s John Marshall Award for Outstanding Legal Achievement, and also served as Chief Appellate Attorney. Prior to his work with the United States Attorneys’ Office, Mr. Savarese served as a law clerk to Justice William J. Brennan of the United States Supreme Court, and to the Honorable Louis H. Pollak of the United States District Court for the Eastern District of Pennsylvania.
Mr. Savarese teaches a course on white-collar criminal law and procedure at Harvard Law School. He serves on the Executive Committee of the New York City Bar Association and was the first chairman of the Association’s White Collar Criminal Law Committee. He is a member of the American Law Institute, and Partner Litigation serves as Adviser to the ALI’s project on Principles of Law, Compliance, Enforcement, and Risk Management. He also is a frequent lecturer and panelist for the P: 212.403.1235 American Bar Association, Stanford Law School’s Directors’ College program, the Practising Law Institute, and the Securities Industry and Financial Markets F: 212.403.2235 Association concerning a wide variety of topics, including defending civil and criminal litigation, handling corporate crises and conducting internal investigations. [email protected] He has written numerous articles on those subjects and serves as a member of the Board of Editors of the “Wall Street Lawyer.”
Mr. Savarese also is chairman of the Board of Trustees of the Vera Institute of Justice in New York, a member of the Dean’s Advisory Board at Harvard Law School, a member of the board of the Lawyers’ Committee for Civil Rights Under Law, and the former President of the board of trustees of The Brearley School in New York.
Mr. Savarese graduated magna cum laude from Harvard University in 1977 and received his JD cum laude from Harvard Law School in 1981, where he was an editor of the Harvard Law Review. Mr. Savarese is regularly recognized as one of the world’s top litigators, including being selected in International Who’s Who of Business Lawyers, Chambers USA Guide and Lawdragon’s 500 Leading Lawyers in America.
16 Elaine P. Golin
Elaine P. Golin is a partner in the Litigation Department at Wachtell, Lipton, Rosen & Katz. Her practice includes contracts, corporate governance, RMBS and securities litigation, as well as other types of complex commercial litigation. Ms. Golin also focuses on the negotiated resolution of complex matters.
Recently, Ms. Golin has represented Cardinal Health in matters pertaining to the opioid epidemic, providing strategic and governance advice on litigation and potential resolutions, and related matters.
Ms. Golin has represented Bank of America, PNC and other financial institutions in numerous disputes concerning mortgage-related matters. Representations include Bank of America’s groundbreaking settlement of claims relating to Countrywide mortgage-backed securities and related litigation, Bank of America’s multi- faceted resolutions with FHFA, MBIA, FGIC and AIG, Bank of America’s global RMBS agreement with the Department of Justice, and PNC in mortgage litigation with RFC. Ms. Golin acts as national strategic counsel to Bank of America in RMBS and other mortgage-related matters.
Partner Litigation Other significant representations include: J.C. Flowers, Bank of America and JPMorgan Chase in material adverse change litigation with Sallie Mae; IAC in P: 212.403.1118 litigation with Liberty Media; Rohm and Haas in its suit to enforce its merger agreement with Dow Chemical; and senior secured lenders in the Spectrum Brands F: 212.403.2118 bankruptcy litigation. Ms. Golin also participated in the pro bono representation of artist Christoph Büchel in a successful First Circuit appeal involving the Visual [email protected] Artists Rights Act of 1990.
As a litigation associate, Ms. Golin worked on several of the firm’s high-profile matters, including its representation of IBP in IBP v. Tyson and of Larry Silverstein in insurance litigation arising out of the destruction of the World Trade Center.
Ms. Golin received a B.A. from Yale College, a diploma in Literature from the University of Edinburgh, and a J.D. from Columbia Law School, where she was an articles editor of The Columbia Law Review and a James Kent Scholar. She clerked for the Honorable Judge Sandra Lynch of the United States Court of Appeals for the First Circuit. Among other professional recognitions, Ms. Golin has been named by Lawdragon as one of the 500 leading lawyers in the United States, was recently profiled in Lawdragon’s Lawyer Limelight and is recognized by Benchmark Litigation as one of the top 250 women in litigation and as a “national practice area star.”
Ms. Golin serves on the board of the Sadie Nash Leadership Project, a non-profit providing leadership education to high-school and college women, and on the board of Mobilization for Justice, a legal services organization.
17 Emil A. Kleinhaus
Emil A. Kleinhaus is a partner at Wachtell, Lipton, Rosen & Katz. He represents clients in litigation at the trial and appellate levels, with a focus on issues relating to bankruptcy, insolvency and creditors’ rights. His areas of expertise include chapter 11 reorganizations, fraudulent transfer and fiduciary claims, and disputes under credit agreements and indentures. He also has extensive experience with cross-border insolvency proceedings.
Emil has been involved in numerous significant matters. He represented JPMorgan Chase in the successful defense of multi-billion dollar actions arising out of the Bernard Madoff fraud and the Lehman Brothers bankruptcy case. As counsel for Education Management in litigation relating to its $1.5 billion restructuring, Emil argued and won a precedent-setting appeal in the Marblegate case from a judgment under the Trust Indenture Act. Emil represented the secured lenders of Toys “R” Us in various disputes and settlements, and he represented TPG, KKR and Goldman Sachs in connection with the contested chapter 11 plan of Energy Future Holdings. In the cross-border area, Emil represented Codere and Hibu in their successful chapter 15 proceedings in the U.S. bankruptcy court. Emil also regularly represents companies and directors in responding to debt default and fiduciary duty claims.
Emil is the author of more than a dozen publications, including “Prepayment Clauses in Bankruptcy” (2007), “Debt Repayments as Fraudulent Transfers” (2014), Partner Litigation and “The Rise of the Net-Short Debt Activist” (2018). He is the author of a chapter in Collier on Bankruptcy, the leading treatise in the field. He is co-chair of the P: 212.403.1332 Bankruptcy Litigation Committee of the Federal Bar Council and was chair of the New York City Bar Association’s Subcommittee on Fraudulent Conveyance Law. F: 212.403.2332 [email protected] Emil has been identified as a national “star” in the Bankruptcy area by Benchmark Litigation and as a “Rising Star” by Law360. In 2018, Emil received the James H. Fogelson Emerging Leadership Award from the Lawyers Division of the UJA Federation of New York.
Emil received a B.A., summa cum laude and Phi Beta Kappa, from Yale College, and a J.D. from Yale Law School, where he was an Articles Editor of the Yale Law Journal. Following law school, he served as a law clerk for Chief Judge Michael B. Mukasey of the United States District Court for the Southern District of New York and for Judge José A. Cabranes of the United States Court of Appeals for the Second Circuit.
18 Carrie M. Reilly
Carrie M. Reilly is a partner in the Litigation Department at Wachtell, Lipton, Rosen & Katz.
Carrie joined the firm’s Litigation Department in 2005. During her time at Wachtell Lipton, Carrie has worked on several of the firm’s high-profile matters, including successfully defending Goldman Sachs in Baker v. Goldman Sachs, a five-week jury trial in federal court; representing Bank of America in its comprehensive multi- billion dollar settlement with the Department of Justice, federal agencies, and state attorneys general, as well as its groundbreaking $8.5 billion settlement of claims relating to 530 mortgage-backed securitization trusts issued by Countrywide and its multidimensional settlements with MBIA and AIG; representing respondents in Morrison v. National Australia Bank, in which the Supreme Court held for the respondents and found that Section 10(b) of the Securities Exchange Act does not apply extraterritorially to so-called “foreign-cubed” securities claims; and representing the National Football League in a contract dispute over the simulcast of the Patriots-Giants game in 2007.
Carrie has also worked on many other significant matters at the firm, including representing Goldman Sachs in litigation arising from the acquisition of TIBCO by Vista Equity Partners, defending Allergan in response to a hostile bid from Pershing Square and Valeant, expedited deal litigation over JPMorgan’s acquisition of Partner Litigation Bear Stearns, the material adverse change litigation between J.C. Flowers, Bank of America, JPMorgan and Sallie Mae, litigation brought by monoline insurers P: 212.403.1399 against Bank of America, commercial real-estate arbitrations, and the firm’s representation of a major international corporation in investigations by federal and state F: 212.403.2399 authorities in the United States. [email protected] Carrie received her B.S. from the Wharton School at the University of Pennsylvania, where she graduated summa cum laude, and her J.D. from Harvard Law School, where she graduated cum laude. She serves on the Steering Committee of the Kate Stoneman Project, is a Fellow of the American Bar Foundation, and is a member of the American Bar Association and the New York City Bar Association. In 2016, Carrie was recognized as a “Rising Star” by the New York Law Journal.
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