July 2015

REPORT

Ruling for Starr International Companies Digital Music Trial

Boies, Schiller & Flexner Chairman David Bernanke and former Treasury Secretary Major publications reported on one of the Boies and a team of lawyers from the Firm Timothy Geithner, the Boies, Schiller most impressive antitrust trial wins of the won what many had considered an against- & Flexner team also shed light on the year in December 2014, when Apple Inc. the-odds victory in a case against the U.S. inner workings of the government in the fought off accusations that it had used an government for illegally taking over insurer financial crisis. Bloomberg News said “the iTunes software update to create a monopoly AIG at the height of the financial crisis of ruling solidifies Mr. Boies’s reputation for in the digital music market. As noted by those 2008. Judge Thomas Wheeler ruled on June winning long-shot cases,” while the Wall publications, the jury verdict for the defense 15, 2015, that the government violated the Street Journal described Mr. Boies as “one ended a decade-long dispute in which the law when it took a controlling stake in AIG. of the best trial lawyers in the country.” plaintiffs sought more than $1 billion in treble “The government’s unduly harsh treatment The court denied plaintiffs’ claims for damages under the Sherman Act. Apple’s of AIG in comparison to other institutions damages, based on a legal ruling that is lawyers repeatedly pointed out the plaintiffs’ seemingly was misguided and had no now on appeal. The trial team included Bob side lacked any actual iPod customers saying legitimate purpose,” Judge Wheeler wrote in Silver, Alanna Rutherford, Amy Mauser, Bob they were harmed, the NewYork Times reported. his ruling for Starr International Companies. Dwyer, Jeremy Vest, William Bloom, Abby “There’s not one piece of evidence of a single Early in the case, many legal observers Dennis, Julia Hamilton, Laura Harris, James individual who lost a single song, not even a anticipated an easy win for the government, Kraehenbuehl, Ilana Miller, John Nicolaou, complaint about it,” the Times quoted Boies, but Mr. Boies and his team overcame that Matthew Schmitten, Mat Schutzer, Matt Schiller & Flexner partner Bill Isaacson as during a trial before Judge Wheeler in Shahabian, David Simons, and Craig Wenner. saying in closing arguments. Mr. Isaacson and the U.S. Court of Federal Claims last fall. Also Carl Goldfarb, Bill Dzurilla, Aaron co-counsel Karen Dunn were honored by Questioning former Fed Chairman Ben Marcus, and Bret Vallacher. Litigation Daily as Litigators of the Week.

Win for Barclays INSIDE THIS ISSUE

INTERNATIONAL ARBITRATION 02 Boies, Schiller & Flexner won a resounding business purchased by Barclays did not Wendy Miles on the growing use of victory for its client Barclays in a six-year include more than $4 billion in margin arbitration in cross-border disputes. battle over the bank’s purchase of the assets and a further $1.9 billion in other LITIGATION 04 Lehman Brothers Inc. brokerage business so-called clearance box assets. The U.S. A $663 mln judgment for highway safety, a at the height of the financial crisis. Lehman Court of Appeals for the Second Circuit win for United Therapeutics, and decisions for agreed on June 5, 2015, to pay Barclays issued two rulings last year, on August 5 holders of Spanish notes and Florida children. an additional $1.28 billion to end the and September 24, upholding lower court INTERVIEW 03 dispute, and Barclays said it would book rulings in Barclays’ favor, and the U.S. Bill Isaacson talks about his historic trial a $750 million pre-tax gain as a result of Supreme Court in May declined to hear a against “amateurism” in college sports. the settlement. “Barclays fought hard and petition by the trustee. The Firm’s work for WOMEN LAWYERS HONORED 05 responsibly through six years of litigation to Barclays was led by Mr. Schiller; along with Three Best in Business Law awards, two secure approximately $8 billion of purchased partners Hamish Hume, Jonathan Shaw, Outstanding Women Lawyers, and one partner in the Top 250 Women in Litigation. yet disputed assets, and today’s settlement Jack Stern, Tricia Bloomer, Todd Thomas, brings that effort to a successful conclusion,” Bill Dzurilla, Chris Green, Heather King, CORPORATE UPDATE 06 Managing Partner Jonathan Schiller told the and Amy Neuhardt; counsel Jon Davenport; When are an investment manager’s fees subject to self-employment tax? Wall Street Journal. Lehman’s bankruptcy and associates Camille Oberkampf and trustee had claimed that the brokerage Randall Ewing.

1 July 2015

Recent Developments in International Arbitration By Wendy Miles QC

The recent $50 billion arbitration award continue to provide relevant and up-to-date against Russia in its dispute with Yukos support to meet ever-evolving needs. In Asia, shareholders has focused attention on Hong Kong’s 2011 Arbitration Ordinance international arbitration as a means of requires arbitrators to avoid delays and resolving major foreign investment disputes. expense, while Singapore has proposed to set It is the latest and largest in a number of up an International Commercial Court with billion-dollar arbitration awards that have been wide jurisdiction over dispute resolution. made public in the last few years. Many more remain confidential. Increasingly, multinational The increasing popularity of international corporations and investors are looking to arbitration to resolve cross-border disputes both international commercial arbitration and expansion, reported to involve some $1.6 can be attributed to at least four factors. investment treaty arbitration to protect their billion, are being heard by the Miami The first is that arbitration agreements overseas investments and positions. International Arbitration Society. and awards are enforceable under the New York Convention, which requires courts in The Yukos case began in 2005, when former Beyond the headline-grabbing public cases, signatory states to recognize valid private shareholders of Yukos Oil Company started there are other signs that arbitration is arbitral agreements and enforce valid an investment arbitration before an arbitral enjoying a surge in popularity. One is the arbitration awards made in other signatory tribunal administered by the Permanent Court rise in caseloads reported by the major states. The second is that arbitration is usually of Arbitration (PCA) in The Hague, alleging international arbitration institutions, including conducted in private, allowing participants that Russia had broken its obligations under the ICSID, which comes under the auspices to protect confidential business information the Energy Charter Treaty by expropriating of the World Bank; the ICC’s International from the public scrutiny that can accompany the company’s assets. The arbitral tribunal Court of Arbitration; the London Court of litigation in court. The third factor is the held unanimously that Yukos was the object of International Arbitration (LCIA); and the flexibility of arbitration, with a choice of a series of politically motivated attacks by the Singapore International Arbitration Centre seats and governing institutional rules to Russian authorities, and awarded damages of (SIAC). Another sign was the opening of the select from, depending on the particular $50 billion to the former shareholders. ICC’s New York office in 2013, where it now situation. But perhaps the biggest reason to administers many of its North American and choose arbitration is its perceived neutrality. Other large quantum awards include Latin American cases, as well as the opening of A corporation making a major investment in a Dow Chemical Co. v. Kuwait and Occidental the International Arbitration Center facilities foreign state may view the host state courts as Petroleum Corp. v. Ecuador, both in 2012. Dow in New York the same year. potentially hostile. A private arbitral tribunal Chemical brought an International Chamber appointed by the parties, based in a neutral of Commerce (ICC) arbitration claiming As the caseloads increase, arbitral institutions seat, and procedurally governed by a fair damages after Petrochemical Industries Co. have taken a number of steps to streamline arbitration statute and institutional rules is of Kuwait backed out of a joint venture procedures. In October 2014, the LCIA more likely to be acceptable to both parties. agreement during the global financial crisis. issued new arbitration rules aimed at The tribunal awarded Dow, the foreign speeding up proceedings, such as the Clients who are about to engage in foreign investor, $2.2 billion in 2012. In the case of wider use of electronic submissions and a investment or cross-border deals have many Occidental, the investor went to arbitration requirement that arbitrators declare that options when it comes to selecting the best at the International Court for the Settlement they are able to devote sufficient time to forum to resolve disputes that may arise. of Investment Disputes (ICSID) after Ecuador ensure an expeditious arbitration (a step put Home courts may be the most advantageous terminated a contract and seized Occidental’s in place by the ICC Court of Arbitration jurisdiction to the investor but may be wells and drilling equipment. The tribunal some years earlier). In 2012, the ICC Court unacceptable to the foreign state or other ruled that while Occidental was in breach of Arbitration updated its case management counterparty. Under those circumstances, of the agreement, Ecuador’s response was procedures further to improve the speed, international arbitration is likely to be the disproportionate, and it awarded Occidental efficiency, and cost-effectiveness of arbitration. way to go. $1.77 billion plus interest. A number of major arbitral seats have also Wendy Miles QC joined Boies, Schiller & Flexner in Meanwhile, a series of disputes over delays recently taken steps to ensure that their London in September 2014 and heads the Firm’s and cost overruns in the Panama Canal national arbitration laws and judiciary International Arbitration practice.

2 July 2015

Questions for Bill Isaacson Mr. Isaacson was co-lead trial counsel for Ed O’Bannon and other former college athletes in a case challenging the NCAA’s amateurism rules. Judge Claudia Wilken issued a historic ruling for the plaintiffs last August.

Before the O’Bannon trial, the judge along with the idea that football players said she wasn’t much of a sports fan. on scholarship were student athletes, but How did that affect your case? he didn’t anymore because really they are We used a lot of illustrations and images. athletes first and students second. The In an antitrust case involving a commodity, NCAA’s expert told me that the University you would show the judge or jury the of Alabama was “the strongest possible school commodity, but that does not take long. in terms of pro football” and their fans We spent much more time showing Judge “follow their team win or lose, paying them Wilken the business of college sports: photos or not.” of stadiums, players’ special dorms and athletic facilities, and, most of all, players O’Bannon wasn’t the only high-profile surrounded by objects showing commercial trial you took part in last year. people assume that the government tells sponsorship. We also showed her tweets Karen Dunn and I defended a client in the businesses in China what to do, and our of colleges promoting the sale of player portable music industry in a billion-dollar jury research indicated this would be an cards and jerseys, YouTube videos of NCAA class action antitrust litigation in December, appealing argument for the defense. Our speeches, and showed her player photos on with a defense verdict. job was to show the jury the documents and sale at the websites of college bookstores. teach them that their assumptions about this What are the other big antitrust trials were wrong. We therefore focused our case What testimony did you elicit from you have been involved in? on showing the evidence that the Chinese witnesses? In 2003, we won a $49.5 million verdict government did not actually compel the Perhaps the most important testimony came (that was then trebled) in antitrust litigation defendants’ decisions to fix the price and from NCAA witnesses who conceded on involving one of the vitamins in the limit the supply of Vitamin C—including cross examination that paying players as international vitamins cartel. Next was a evidence of voluntary agreements and voting much as $10,000 a year would not hurt the $34.5 million price-fixing judgment involving at meetings. Many documents were shown popularity of the sport or interfere unduly scrap metal companies, followed by the trial to the jury with statements such as we have with the principle of amateurism. This was against Chinese Vitamin C makers in 2013. “communicated” with the other companies reflected in Judge Wilken’s final order. She “hoping that they will maintain a similar struck down NCAA rules prohibiting the In the Vitamin C case, what made you pricing policy for our common interest.” sharing of revenues from the use of the pursue the first private antitrust case names, images, and likenesses of college against an international cartel? What are you working on now? football and basketball players, and allowed When our Firm started in 1997, Jonathan I am scheduled for trial for a plaintiff this colleges to put up to $5,000 per player Schiller uncovered the first worldwide year, again with Karen Dunn, in litigation for per year in a trust fund for athletes, along vitamins cartel, and then prosecuted the civil a client in Silicon Valley. with any additional money for the full cost action. So when a client pointed out that of attending school. (Remarkably college Vitamin C was controlled by four companies You’ve been at Boies, Schiller & athletic scholarships fall short by as much as in China and prices were rising, I started Flexner since the beginning. What $5,000 a year in covering the actual costs of investigating that situation and found the made you decide to join a new firm? education). evidence of price fixing by those companies. I was not going to miss the opportunity Given the history of our Firm, of course we to work in a start-up litigation firm with What do you think the future of were going to prosecute a price-fixing case Jonathan Schiller and David Boies. I believed college athletics will look like? against a new vitamins cartel, wherever it that the Firm would attract interesting clients College football and basketball already look was from. and challenging cases, but it has done so at like the future: those sports look, feel, and levels I do not think anyone anticipated. act like commercial sports, except that the The companies said they were athletes also attend a college or university. I compelled by their government to Litigation Daily named Mr. Isaacson and his co- asked one of the NCAA’s expert witnesses collude. How did you convince the counsel Litigators of the Week after the O’Bannon about this at trial, and I quoted Alabama jury that they had acted on their own? decision. Mr. Isaacson was assisted at the trial by coach Bear Bryant, who said he used to go That was an uphill struggle, because associate Martha Goodman.

3 July 2015

Litigation Update by Novartis, challenged three of United FCC NOTE HOLDERS Therapeutics’ patents for Remodulin®, Boies, Schiller & Flexner’s London office claiming that those patents were invalid or obtained a judgment from the English High HIGHWAY SAFETY would not be infringed by Sandoz’s proposed Court on April 16, 2015, that an event of The Firm won the fourth-largest jury award sale of a generic form of Remodulin®. After default had occurred under the terms of of 2014 – and the biggest ever award for several years of litigation, Sandoz withdrew €450 million of notes issued by Spanish a whistleblower bringing a case without the challenge with respect to one patent, conglomerate Fomento de Construcciones y Justice Department intervention – in a and the parties went to trial on the other Contratas, S.A. (FCC). The judgment is an trial that will make U.S. highways safer two. After a trial spanning six weeks, the offshoot of an action the Firm is bringing, for drivers. Partners George Carpinello, court found both patents at issue to be valid, with local co-counsel, in the Spanish courts Karen Dyer, Nicholas Gravante, Jr., and and that one of the patents was infringed after FCC wrote off principal, reduced Chris Green conducted the case on behalf by Sandoz’s proposed generic product. interest rates and extended the maturity of a plaintiff who claimed that manufacturer United Therapeutics stock rose more than of €1.35 billion in syndicated debt. Boies, Trinity Industries had modified the design 25 percent on the day the decision was Schiller & Flexner also obtained an order of its highway guardrail end-terminals announced. The Boies, Schiller & Flexner that FCC should pay the costs incurred without government approval. The trial team working on the case included partner by its clients, who are holders of both the team, with local co-counsel, showed how Richard Meyer and associates Bill Ward, Mike notes and the syndicated loan, in bringing the modified end-terminals, which are Mitchell, Evan North, Jon Knight, Joseph their claim in the English Courts. The case supposed to absorb energy in a crash, were Lasher, James Kraehenbuehl, and Rocky is being led by London Managing Partner instead rendered lethal. The jury found Collis. Natasha Harrison, assisted by associates that Trinity had defrauded the government Fiona Huntriss, Melissa Kelley, and Ross by making false statements about the end ARIZONA ICED TEA McCartney. terminals, awarding $525 million after A New York state trial court awarded the trebling. ABC Television carried out a Firm’s clients, the owners of 50 percent of GOLDMAN SACHS major investigation into deaths and injuries the AriZona Iced Tea group of companies, The Firm prevailed in an appeal for its that occurred in accidents involving the in excess of $1 billion for their stake in the client Goldman Sachs & Co. in a highly modified end terminals, and the New York enterprise, after they sued their co-owners publicized litigation brought by former Times documented failures in the Federal for dissolution. The owners of the other 50 Goldman Sachs computer programmer Highway Administration’s approval percent stake had alleged that the enterprise Sergey Aleynikov. Mr. Aleynikov, whose process. The day after the trial, the federal was worth only approximately $400 million legal issues are the subject of a chapter in government asked Trinity to conduct crash – 20 percent of the value determined Michael Lewis’s recent book Flash Boys, was tests on the terminals, which some 13 states by the Court. The ruling followed a six- convicted in 2010 of stealing computer have banned from their roads. Soon after week trial and nearly six years of litigation code from Goldman Sachs and sentenced the verdict, Trinity said it would stop selling between members of the Ferolito family, to eight years in prison. The Second Circuit the modified end terminals. U.S. District which founded AriZona, and its co-owners, later vacated that conviction, and he was Judge Rodney Gilstrap, in Marshall, Texas, members of the Vultaggio family. On then the defendant in a criminal prosecution entered a judgment of $663 million against November 14, Justice Timothy Driscoll by the New York County District Attorney. Trinity Industries on June 9, 2015. Counsel of Nassau County Supreme Court further Mr. Aleynikov sued Goldman Sachs in 2012, George Coe, Theresa Monroe, and Jeff ordered AriZona to make the first payment seeking payment of legal fees he incurred Shelley assisted at the trial. Mr. Gravante of $125 million to the Firm’s clients, the in defending the criminal actions brought was named Litigator of the Week by the Ferolito family. The Boies Schiller & Flexner against him. The presiding judge held that American Lawyer’s Litigation Daily for his team was led by Nicholas Gravante, Jr. and Delaware law entitled Mr. Aleynikov to the work on the case. partner Helen Maher, who had managed advancement of his legal fees in the ongoing the case on a daily basis for the last four state court criminal litigation, a decision the UNITED THERAPEUTICS years. The team consisted of partners David Firm challenged via an interlocutory appeal On August 29, 2014, Boies, Schiller & Barrett, George Carpinello, Karen Dyer, on behalf of Goldman Sachs. In September Flexner partner William Jackson scored Michael Merley, William Ohlemeyer, Jeremy 2014, the Third Circuit overturned the a significant victory for the United Vest, and Richard Weill; counsel Rosanne district court’s advancement order by a Therapeutics Corporation as co-counsel Baxter and James Grippando; and associates 2-to-1 majority and returned the case to in Hatch-Waxman litigation to protect its Brooke Alexander, Daniel Boyle, Amy the trial court. The decision was covered intellectual property rights associated with Donehower, Paul Fattaruso, Miguel Lopez, in a front-page article in the New York its blockbuster drug Remodulin®. Sandoz Paul Maslo, Sebastian “Sheb” Swett, and Times Sunday Business section titled “At Inc., a generic drug manufacturer owned Jenny Vatrenko. Goldman Sachs, Even the Legal Fees Are

4 July 2015

Different,” and by Bloomberg News in a In Partnership Women Lawyers story titled “‘Flash Boys’ Programmer Loses in Goldman Fight Over Fees.” The Boies, Dawn Smalls, a lawyer with experience Receive Awards Schiller & Flexner team includes Managing across law, government, politics, and Partner Jonathan Schiller, partner Chris philanthropy, returned to the Firm as a London Managing Partner Natasha Harrison Duffy, and associates Karen Chesley, Steve partner in New York. International disputes was named “Best in Litigation,” partner Wendy Kyriacou, and Nathan Strauss. attorney Kenneth Beale joined as a partner Miles QC was named “Best in International in the London office. Hampton Dellinger, Arbitration,” and associate Fiona Huntriss was EXPLORERS CLUB Ian Dumain, John LaSalle, Michael Mitchell, named “Rising Star – Litigation” in Women in Boies, Schiller & Flexner Partner Josh Beko Reblitz-Richardson, Shani Rivaux, Josh Business Law awards sponsored by Euromoney Schiller fought off multinational beverages Schiller, and Bill Ward became partners in in June. Ms. Harrison is currently leading the company Diageo on behalf of his client January. Lisa Barclay, former Chief of Staff representation of note holders against Spanish The Explorers Club, after Diageo used the of the Food and Drug Administration, Stacey conglomerate Fomento de Construcciones club’s name without permission on a line of Grigsby, former Counsel to the Associate y Contratas, assisted by Ms. Huntriss, and whiskeys. Justice Charles Ramos of New York Attorney General, and Joshua Riley, former recently won an important judgment for their State Supreme Court ruled in August 2014 General Counsel to Senator Al Franken, client from the English High Court. that Mr. Schiller’s case seeking a permanent joined the Firm as counsel in Washington. injunction against Diageo was a “slam dunk.” Partner Heather King left to become General Washington partner Karen Dunn and New The two parties reached a settlement six Counsel at the Firm’s client Theranos. York partner Alanna Rutherford were named weeks later in which Diageo entered into a Partner Lee Wolosky was appointed Special Outstanding Women Lawyers by the National licensing agreement with the club for the Envoy for Guantanamo Closure at the U.S. Law Journal. The publication recognized 75 use of its name. The petition for a permanent Department of State. women lawyers from across the country for, injunction against Diageo was filed under among other things, leadership, performance New York General Business Law Section in significant cases, development of successful 135, which bars the unauthorized use of the Honors & Recognition practices, and efforts to improve diversity in name of a “benevolent, humane or charitable Wendy Miles, the head of the Firm’s the profession. Ms. Dunn served as co-lead organization” with intent to obtain a business International Arbitration practice, was counsel in a high-profile antitrust case in the advantage or benefit. Associates John Dema, appointed Queen’s Counsel, one of only five portable music industry last year, winning who is an Explorers Club member, and Ben English solicitor-advocates to take silk this a defense verdict from the jury in a class Margulis worked on the case. year. Steve Zack, the administrative partner action that had sought $1 billion in damages. of Boies, Schiller & Flexner’s Miami office, She also represents the District of Columbia FLORIDA MEDICAID was awarded the David Dyer Professionalism Council in its fight to gain autonomy over In a pro bono case brought by the Firm on Award, the highest award given by the Dade the city’s local spending. Ms. Rutherford behalf of children in Florida, a federal judge County Bar Association. Mr. Zack also won played a leading role in one of the nation’s found that the 1.9 million children who a lifetime achievement award from the first derivatives litigations. She worked depend on the state’s Medicaid program Daily Business Review. Bill Isaacson’s work recently on the constitutional takings case for their medical and dental care are not pursuing cartels in the vitamin industry was brought by AIG shareholders against the U.S. receiving the care required by federal the subject of a profile in Law360, which Government. law. Approximately “one-third of Florida named him a “Titan of the Plaintiffs Bar.” children on Medicaid are not receiving the Anne Hinds received the President’s Pro Helen Maher, a partner in Armonk, was preventative medical care they are supposed Bono Service Award from the Florida State named to Benchmark Litigation’s list of to receive,” Judge Adalberto Jordan wrote Bar Association for her work representing Top 250 Women in Litigation for 2015. The in a 153-page decision on New Year’s Eve Florida teenagers in foster care. Two of the publication noted that Ms. Maher’s practice is finding sweeping deficiencies in the program. Firm’s partners, Ian Dumain and Karen “taking off like a bullet.” The decision followed some 90 days of trial Dunn, were named “Rising Stars” by Law360, that took place over two years. Partners which honored lawyers under 40 whose Stuart Singer and Carl Goldfarb in Fort “legal accomplishments belie their age.” Mr. Lauderdale are leading the case, along with Dumain was named in the health category partners Sashi Bach and Damien Marshall, and Ms. Dunn in the competition category. counsel Lauren Fleischer Louis, associate Alanna Rutherford, a partner in New York, Pascual Oliu, attorney Thomas McCawley, was named a “Rising Star” by the New York Law and other lawyers from the Firm’s Fort Journal; and Ms. Dunn was named a “Rising Lauderdale office. Star” by the National Law Journal. Alanna Rutherford and Karen Dunn

5 July 2015

Corporate Update: When Is an Investment Manager Subject to Self-Employment Tax? By Ansgar A. Simon

An internal advice memorandum from the acknowledged that not all of the income of IRS from last September should be of interest an S corporation shareholder who provides to our fund clients. The IRS memorandum, services is subject to self-employment tax, CCA 201436049 (Sept. 5, 2014), concluded and the September IRS memorandum does that all of the management fees earned by an not affect this position. Therefore, the issue investment manager organized as a limited would not arise for an investment manager that liability company (LLC) and treated as a elects to be treated as an S corporation for U.S. partnership for U.S. federal tax purposes federal tax purposes. S corporations are subject were subject to self employment tax. The to several restrictions, however, including a memorandum has increased concern among maximum of 100 shareholders − all of whom or (2) trading of financial instruments or tax lawyers about whether an exemption from must be U.S. citizens, resident individuals, commodities. A member who worked for the employment tax for certain income derived by or certain limited types of trusts − and the investment manager in excess of 500 hours a “limited partner” applies to LLC members. requirement that only a single class of shares be annually, however, would not be engaged in issued. Also, shareholders who provide services a passive activity, and his or her share of the Traditionally, tax lawyers considered the use for the S corporation investment manager net fee income should not be subject to net of a limited partnership rather than an LLC would have to receive reasonable compensation, investment income tax. to strengthen the position that this exemption which would be subject to employment taxes. should apply. But in the memorandum the IRS In light of the sweeping approach to self- focused on the services the members provide. In most cases, the new 3.8 percent “net employment taxes in the IRS Memorandum, This focus raises the risk that customary investment income” tax also would not apply investment managers should carefully review arrangements for earning management fees to the distributive share of the investment whether their current structure continues might be challenged by the IRS as subjecting manager’s fee income, regardless of whether to serve them well for self-employment tax the partners or members to self-employment the manager is a limited partnership or an purposes. We can provide advice to help tax, and, if not settled on audit, end up before S corporation, even if the distributive share managers evaluate their current structure a court. is exempt from self-employment taxes. For and to convert to an S corporation if they both limited partners and S corporation consider it advisable. Fortunately, a potential way to address this shareholders, net investment income tax risk should remain available for a number of applies to income derived from a trade or A more complete version of this article is available investment managers. The IRS has previously business only if it is (1) a “passive activity” at www.bsfllp.com/news/professional_leadership.

Corporate Finance Expertise Las Vegas

Dev R. Sen, a highly experienced corporate and secured and unsecured bank and capital Boies, Schiller & Flexner represented the attorney, has joined the Firm in New York, markets debt finance, including Rule 144A, Las Vegas Convention and Visitors Authority adding expertise in the area of corporate public and institutional debt finance, such in its recent acquisition of a strategic finance that complements the Firm’s existing as representation of insurance companies in 26-acre parcel of property that will serve mergers and acquisitions and private equity debt private placements. He also focuses on as the cornerstone for a planned $2.3 practices. Chris Boies, the head of the joint ventures and M&A, and private equity billion convention center expansion and Firm’s Corporate Group, said the addition related matters. Mr. Sen also possesses renovation project known as the Las Vegas was part of a process of growing the group considerable experience in alternative Global Business District. Partners Paul Lal in a deliberative and selective manner. Mr. investment transactions, and with corporate and Stefan dePozsgay; and associates Sean Sen has a general corporate practice with a reorganizations and restructurings. Mr. McFarlane, Joseph Eno, Katherine Gibson, particular focus on bank and capital markets Sen is also well versed in investment and Gloria Ho worked on the transaction. debt finance, including project finance in the management and securities lending and Partners Ansgar Simon and Keith Blum energy, oil and gas, and infrastructure areas, receivables purchase transactions. assisted in various aspects of the transaction.

6 July 2015

The Boies, Schiller & Flexner Associate By Courtney Rockett

As newly appointed Co-chair of the teammates who want to build a career with us, just the facts and law Recruiting Committee, I consider it my and whom we hope to make partners. pertinent to a case, but charge both to attract, retain, and motivate the also the main drivers of most skilled associates in the profession and to We have highly complex cases and expect the the client’s business or maintain our Firm’s unique culture and ethos. world from our associates in terms of quality industry, the key players Together with my Co-chair, Phil Korologos, of output. We also want attorneys who are in the litigation, how to I have been honored with the opportunity to eager to get into a courtroom or deposition think around corners, help grow the Firm and continue to expand as soon as possible rather than someone who and the psychological its diversity under the guidance and support would be more comfortable behind a desk. We and practical effects of our three vibrant managing partners: look for candidates with an entrepreneurial of any action taken or strategy or position David Boies, Jonathan Schiller, and Donald spirit, charisma, creativity, and a passion for adopted. This horizontal, collaborative Flexner. Together they have created a highly our profession. In return, we provide them approach results in associates capable of successful law firm that endeavors to cultivate with a work environment that will help them providing a higher level of service to our the best trial attorneys by using a model that is excel and a compensation structure that will clients with more comfort and confidence common-sense yet surprisingly unique. reward them for their efforts. in their abilities than their vertically trained counterparts, who may spend years drafting As with most of our competitors, we start We understand that our jobs can be stressful, so research memos for other associates and with an applicant pool of the highest- we remove the typical superficial stresses, such as performing document review walled off performing students from the top ten or so face time and dress codes. As long as their work from the day-to-day richness of practice. law schools. We then look for applicants whose gets done in accordance with the high standards This, in turn, is readily apparent to judges resumes demonstrate a “go getter” drive and that our clients have come to enjoy and expect, and adversaries alike. enthusiasm. We look for self-starters, hard we try to give our associates the flexibility to workers, and team players with evidence of maintain a reasonable work/life balance and We believe that the best way to litigate is practical decision making and leadership from pursue outside interests. That said, when a trial to have only as many minds involved as is a wide range of backgrounds. or similarly consuming activity is upon them, necessary to win the case, and to have the we expect as much time and concentration same associates working on a case from Then comes the interview. This is where self- as associates can reasonably offer in the beginning to end. This ensures that the selection starts. Rather than delivering a “sales performance of their professional responsibilities. whole team understands even the small, pitch,” we try to present a candid description preliminary events when a case gets to of the realities of our practice so that We expose associates to high-level work trial months or years down the road. This candidates can make an informed decision and as soon as possible while providing proper is more efficient for our clients and has the the interviewer can get a sense of whether a supervision. As a result, our associates at added benefit of maximizing the experience candidate would succeed at the Firm. We are every stage of their careers tend to have of our young attorneys. not trying to find associates who will work here more meaningful practical experience than for a few years and then leave. We still consider those at other firms. To ensure competence, Courtney Rockett is a partner in Armonk and a ourselves to be a specialist Firm looking for we also help our associates understand not Co-chair of the Firm’s Recruiting Committee.

Four SDNY Prosecutors Boost White Collar Capability

After handling many of the federal government’s regulatory capabilities. They were joined in May Secrecy Act, numerous individuals associated most prominent cases in recent years, Assistant by a fourth experienced Southern District of with Bernard L. Madoff Investment Securities U.S. Attorneys Matthew L. Schwartz, Peter M. New York prosecutor, Randall Jackson. The four (including the “Madoff Five”), and Javier Martin- Skinner, and John T. Zach from the Southern have worked together as federal prosecutors for Artajo and Julien Grout in connection with the District of New York joined Boies, Schiller nearly a decade on a wide range of national and “London Whale” trades. According to the Wall & Flexner in January to launch a Global international cases: the prosecutions of SAC Street Journal, “Boies, Schiller & Flexner LLP Investigations and White Collar Defense practice, Capital Advisors on insider trading charges, has pulled off one of the larger—and more and bolster the Firm’s existing white collar and JPMorgan Chase for violations of the Bank unusual—coups of the New Year hiring season.”

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