Takeover Flurry: It’s All Over Except the Lawyering
Many of Wall Street’s high-priced lawyers are spending the holidays skiing in Colorado or sunning in the Caribbean.
John D’Alimonte isn’t with them.
D’Alimonte, a partner in the law firm Willkie, Farr & Gallagher, specializes in helping companies with mergers and acquisitions. And right now he has little time for his family, never mind a vacation.
D’Alimonte, 43, is not alone. Dozens of takeover lawyers, investment bankers and their staffs have been toiling up to 20 hours a day recently to complete a rash of deals by midnight tonight.
That’s when the new federal income tax law takes effect, a law that makes many types of mergers more expensive, in terms of taxes, for buyers and sellers. So companies have been making deals at a frenzied pace to capture the current law’s tax advantages, and it is up to the lawyers and bankers to finish the deals before Jan. 1.
“Even though we carry a substantial backlog of projects into next year, with the tax law there has been a real focus on year-end closings,” said Willard J. Overlock Jr., who manages the mergers and acquisitions department at the investment banking firm Goldman, Sachs & Co.
Phone Calls on Christmas
D’Alimonte was able to enjoy Christmas at home, but even then a pending takeover required that he spend two hours on the telephone. The next day, and again Sunday, he was back in the office until midnight.
“I don’t particularly think it’s great fun making phone calls on Christmas Day, but I serve a client,” D’Alimonte said, in this case referring to Pandick Corp., a financial printing concern being acquired by an investor group.
The investment bankers primarily advise companies on the merits of acquisitions and help arrange the financing.
“The big workload occurred in early to mid-December, and to that extent it is now down to a trickle,” said Daniel J. Good, a managing director and head of merchant banking for Shearson Lehman Bros. Inc.
“Most of the major advice has been given and taken,” Good said, “and most of the senior people have decided to go south or skiing and the junior people are left to clean up the details.”
But at the law firms, senior and junior attorneys continue to feel the pressure to ensure that takeover documents are in order before 1987 arrives.
Handsomely Rewarded
The lawyers are handsomely rewarded for their long hours. Six-figure incomes are the norm, and first-year associate lawyers at Willkie, Farr & Gallagher earn $65,000 with the prospect of a $5,000 bonus.
But the legal teams of Willkie Farr and other top takeover law firms also include people of more modest means, including word-processing specialists, secretaries, telephone receptionists, proofreaders and messengers.
All have found sleep to be a precious commodity lately.
Consider the case of Joy Manufacturing Co., a Pittsburgh-based concern that on Dec. 22 agreed to be acquired by an investor group, thwarting an unfriendly takeover attempt by Pullman-Peabody Co.
Joy is represented by Fried, Frank, Harris, Shriver & Jacobson, one of the nation’s leading takeover law firms. The team it assigned to Joy “worked three nights in a row and had about four hours sleep” per night to get Joy’s offer ready by year end, said Arthur Fleischer Jr., one of the firm’s partners.
“Happily, they got the offer ready to be mailed (to shareholders) on the night before Christmas,” enabling the team to spend the holiday at home, Fleischer said.
