Airgas of Radnor says its former New York corporate lawyers shouldn't be allowed to advise rival Air Products of Bethlemen in its hostile takeover bid.
"The battle over Cravath, Swaine & Moore's role in Air Products and Chemicals' attempted takeover of rival Airgas has become so pitched that you could almost forget a $5.1 billion unsolicited takeover is at stake here," writes AmLaw Daily here.
Should Cravath "be disqualified from representing Air Products after doing finance work for Airgas for nearly a decade"? Airgas on Monday said so in Delaware's Court of Chancery, "where Air Products first sued Airgas on Feb. 4 for failing to even consider Air Products' offers for the company." Airgas on Feb. 5 sued Cravath in Pennsylvania, "claiming Cravath was privy to inside Airgas information and should therefore be disqualified from the Air Products team." Air Products' lawyers accuse Airgas "of trying to circumvent [Delaware] authority by suing in Pennsylvania."
Airgas's expert ethics witness, University of Pennsylvania law professor Geoffrey Hazard, wrote that "Cravath and partner Ronald Kami likely obtained non-public information about Airgas' finances between 2001 and late 2009, a period during which Cravath advised the company on financing issues. Air Products opened discussions with Airgas on Oct. 15, 2009, but Kami did not officially terminate Cravath's relationship with Airgas until Oct. 28, 2009... The move violated the so-called "hot potato" rule, which holds that a firm cannot get out of a conflict simply by dropping one client on short notice, Hazard wrote...
"Cravath and Air Products have "several" expert opinions of their own ready to be released anytime."