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Law Firm Merger Mania: King & Spalding Negotiations with Thacher Proffitt Break Down

Saturday, December 20, 2008 4:47 PM - By Elie Mystal

Thacher.jpgOver the last week, we’ve been covering whether Thacher Proffitt’s litigation department was going to survive into the New Year. The operating theory has been that Thacher Proffitt’s corporate department would be part of a merger between TPW and King & Spalding, with litigation left out in the cold.

But now it looks like King & Spalding could be out of the game entirely. AmLaw Daily reports:

King & Spalding no longer is in the running to acquire the substantial portion of Thacher Proffitt & Wood that it had pursued in recent weeks, according to a lawyer familiar with the negotiations.

We’ve reported the widely held belief that TPW needs the K&S merger to go through in order to avoid dissolution:

The New York consultant and another individual familiar with the discussions say that if the deal falls through, Thacher Proffitt will likely go under.

Then again, the Treasury Department seems to think that Thacher Proffitt is going to stick around. And when was the last time they were wrong?

After the jump, we see if there is another option for TPW.

law firm merger small.jpgAs we’ve seen with Heller Ehrman and Thelen, efforts are made to parcel out specific practice groups and departments before any official announcement of dissolution. That is apparently what happened in the final act of the K&S/TPW negotiations:

The partner says King & Spalding initially explored a deal in which it would acquire substantially all of Thacher. In recent weeks, however, King & Spalding grew wary of the bank debt and lease exposure that an outright acquisition would entail, and instead proposed a deal in which it would take a group of approximately 75 Thacher lawyers as lateral hires.

The group would represent essentially all of Thacher’s structured finance practice. The rationale for such a move, says the partner, was that the practice would likely rebound in a year or two.

Structured finance attorneys hanging onto their jobs while others did not would have been major news in and of itself.

And it still might happen. According to AmLaw Sonneschein is in the mix:

Within the past week, according to the partner, as King & Spalding neared a deal with Thacher for the structured finance group, it emerged that Sonnenschein Nath & Rosenthal was talking to Thacher lawyers.

Of course, Sonnenschein was last seen in these pages laying off approximately 25 attorneys. We have no idea if they are in a better position to take on more people than K&S was.

Either way, the dark is gathering around TPW. Again.

King & Spalding Out of Proposed Thacher Acquisition [AmLaw Daily]

Earlier: Law Firm Merger Mania: Thacher Proffitt To Be Rescued by King & Spalding?
Treasury Hires Thacher To Help Out With TARP

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Posted in: Dissolution, King & Spalding, Law Firm Mergers, Sonnenschein, Thacher Proffitt & Wood

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