americanlawyer.com APRIL 2011 Photograph By Paul Godwin TOP TRANSACTIONS LAWYERS 2011 DEALMAKERS OF THE YEAR As the nation finally shook off the recession, lawyers focused on fixing the damage. IT WAS A YEAR FOR REPAIR—and we’re not just talking about Ballard Spahr’s role in obtaining upkeep funds for New York City public housing projects. Notable among the year’s cleanup projects: the relaunch of General Motors Company and the downsizing of AIG International Group, Inc. Government involvement—whether direct, through stimulus money and bailouts, or indirect, through export credit agencies—played an outsize role in many of the year’s most interesting deals. In M&A work, some of the most impressive showings were on the target side, as lawyers worked to win top dollar for shareholders, despite the tough economy. In the equities world, issuers in developing markets, especially China and Brazil, ordered up complex, multi-exchange offerings that resulted in plenty of work for lawyers. And that gave a boost to another repair project— shoring up firms’ bottom lines. PROP STYLING BY JEFF STYLES JOHN VASILY Debevoise & Plimpton LLP
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americanlawyer.com april 2011
Photograph By Paul Godwin
top transactions lawyers 2011
dealmakers of the year
As the nation finally shook off the recession, lawyers focused on
fixing the damage.
It was a year for repaIr—and we’re not just talking about Ballard Spahr’s role in obtaining upkeep funds for New York City public housing projects. Notable among the year’s cleanup projects: the relaunch of General Motors Company and the downsizing of AIG International Group, Inc. Government involvement—whether direct, through stimulus money and bailouts, or indirect, through export credit agencies—played an outsize role in many of the year’s most interesting deals.
In M&A work , some o f the most impressive showings were on the target side, as lawyers worked to win top dollar for shareholders, despite the tough economy. In the equities world, issuers in developing markets, especially China and Brazil, ordered up complex, multi-exchange offerings that resulted in plenty of work for lawyers. And that gave a boost to another repair project—shoring up firms’ bottom lines.
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john vasilyDebevoise & Plimpton LLP
John VasIly doesn’t need a textbook when he teaches his class on global securities offerings at Georgetown University Law Center; he can mine his own deals for case studies and tests. The Debevoise & Plimpton LLP partner describes the biggest transaction he worked on last year, the initial public offering of American International Assurance, as “the perfect final exam, [because] every issue the class covers came up.” To wit: The par-ent company, which had a central role in the banking crash of September 2008, had just been bailed out by the federal government. The subsidiary that was going public was based in Hong Kong and had highly regulated operations in more than a dozen countries. And it all happened in the midst of the economic turmoil that characterized much of last year.
AIA’s IPO, which hit the market in October, raised $21.5 billion, a record amount for the Hong Kong Stock Exchange. It was one of several asset sales that American International Group, Inc., held to repay its $182 billion gov-ernment bailout. “These were an amazing series of deals to do, especially because they occurred during a time of great economic turmoil and political sensitivity,” Vasily says.
The IPO, specifically, presented Vasily and his team with several chal-lenges. While Debevoise was hired by AIG, the federal government was, in essence, a coclient. It had to be included in the information stream and given some deference, as did AIA’s own Hong Kong–based management team and insurance regulators in countries where AIA operated. “[Vasily] understood our needs from commercial and legal perspectives, but he also understood that this was a very large, high-profile transaction with individ-ual constituencies and unique internal dynamics,” says AIG associate gen-eral counsel Andrew Borodach.
From the beginning, the overall objective of the AIA transaction was clear: raise cash for AIG—or, in effect, for the federal government, to repay the bailout. The deal began in the fall of 2008 on a dual track, with prepa-rations for either an IPO or an acquisition of AIA by a strategic investor. Given the weakness of the overall economy at that time, strategic buyers
were hard to come by. It seemed as though AIA was headed for an IPO, and at the end of 2009, the company finalized and filed a prospectus for the offering.
But in early 2010, London-
based Prudential PLC made an offer to buy AIA, and Vasily, who had spent the previous year commuting between Asia and New York, was now on a plane to London, where he and Borodach spent four weeks working on merger documentation.
News of the deal between Prudential and AIG for AIA broke in February 2010, which further sped up the negotiations. “The most memorable part of this process was a long series of meetings [by AIG’s board of directors] that lasted about three days where the board was deciding whether to go with the IPO or the Prudential deal,” Vas ily says.
The board ultimately chose the Prudential of-fer, which at the time was valued at $35.5 billion in cash and stock. Months later, the deal fell apart amid a backlash by Prudential shareholders and an attempt by Prudential to lower the acquisition price by about $5 billion. And so, after the long Prudential diversion, Vasily was again left with the IPO option, nearly a year after the filing of that initial prospectus.
In its role as one of AIG’s disposition law firms, Debevoise worked on several other deals for the insurer. It provided legal counsel on the sales of a wide variety of assets, including AIG Life Insurance Company of Canada (sold in January 2009 for $263 million), a portion of AIG’s advisory and asset man-agement business (sold in September 2009 for $500 million), AIG Bank Finance (sold in September 2009 for an undisclosed amount), and Nan Shan Life In-surance Company, the largest life insurer in Taiwan (sold in January 2011 for $2.16 billion). While these deals lacked some of the twists and turns of the AIA disposition, maybe they can form the basis of extra-point questions for professor Vasily’s students.
