Four Law Firms Score Roles on Nuclear Energy Deals
Mayer Brown, McGuireWoods, Morgan Lewis and Weil, Gotshal & Manges are advising on a pair of potential transactions that could reshape the U.S. nuclear energy sector. Weil has reaped millions in legal fees for its work on behalf of one company, bankrupt Westinghouse Electric.
January 05, 2018 at 07:40 PM
6 minute read
At least four Am Law 100 firms are advising on a pair of billion-dollar deals that will reshape the face of the U.S. nuclear industry.
In the larger of the two transactions, Dominion Energy Inc. announced on Jan. 3 that it would acquire South Carolina utility Scana Corp. in a $7.9 billion cash-and-stock deal. McGuireWoods and Morgan, Lewis & Bockius picked up roles representing Richmond, Virginia-based Dominion, while Mayer Brown has taken the lead for Scana.
On Jan. 4, Brookfield Business Partners LP, an affiliate of Canada's Brookfield Asset Management Inc., unveiled its $4.6 billion bid with institutional partners to buy bankrupt nuclear services company Westinghouse Electric Co. LLC from Japan's Toshiba Corp. Weil, Gotshal & Manges, which has been advising Westinghouse Electric in Chapter 11 proceedings, has taken the lead for the suburban Pittsburgh-based debtor on its proposed sale.
A spokeswoman for Brookfield Business Partners, the private equity arm of Canada's largest alternative asset manager, did not immediately return a request for the name of its outside legal adviser on the deal, which will include the remainder of Westinghouse Electric's operations, including its non-bankrupt European arm, from Tokyo-based Toshiba.
Once a major player in the U.S. nuclear power industry, Westinghouse Electric fell on hard financial times as a result of the construction of two U.S. reactor projects that went billions of dollars over budget. One of them is the Virgil C. Summer nuclear plant in Jenkinsville, South Carolina, a stalled project whose majority stakeholder is Scana. In late July 2017, Scana-owned South Carolina Electric & Gas Co. halted the plant's proposed expansion.
A subsequent federal investigation saw law enforcement authorities question how costs of the failed V.C. Summer plant grew to more than $20 million, with consumers footing the bill. North Carolina's Moore & Van Allen is advising a marketing subsidiary of Scana in the bankruptcy of Westinghouse Electric, while McGuireWoods is counseling a nuclear energy unit of Dominion in the matter. Court filings show that Weil has billed at least $18.9 million in legal fees and expenses for its work on behalf of Westinghouse Electric in its Chapter 11 case. (More than $9.8 million of that same came in the 90 days prior to the company's bankruptcy filing.)
An interim fee application filed on Oct. 19 by professional advisers for Westinghouse Electric seeks more than $10.9 million in legal fees and expenses for Weil, as well as almost $2 million for the company's special counsel at K&L Gates. New York's Togut, Segal & Segal sought $658,205.78 for its bankruptcy work on behalf of Toshiba, while Proskauer Rose requested almost $3.8 million in its role representing unsecured creditors in the case.
Howard Chatzinoff, co-head of the M&A practice at Weil, is leading a team from the firm advising longtime client Westinghouse Electric on its sale that includes corporate partner James Harvey, business finance and restructuring co-chair Gary Holtzer and restructuring partners Garrett Fail and Alexander Wood. Michael Sweeney serves as general counsel for the debtor.
Other Weil lawyers working on the deal include tax partners Stuart Goldring, Kenneth Heitner and David Irvine, executive compensation and benefits partners Paul Wessel and Amy Rubin, technology and intellectual property transactions partner Jeffrey Osterman, banking and finance partner Douglas Urquhart, cybersecurity and data privacy partner Randi Singer, antitrust partners John Scribner and Douglas Nave, environmental partner Annemargaret Connolly, international trade partner Theodore Posner, insurance partner Joseph Verdesca, labor and employment counsel Ivor Gwilliams and Lawrence Baer, and Foreign Corrupt Practices Act counsel Adam Safwat.
As for Scana, which along with Westinghouse Electric was accused of using unlicensed workers as state and federal regulators probed both companies over the V.C. Summer plant failure, it will see Dominion now absorb the costs of that scandal. Dominion, which supplies electricity and natural gas to parts of North Carolina, Ohio, Virginia and West Virginia, has agreed to pay $1.3 billion to Scana's customers $1.3 billion, or roughly $1,000 per person, in order to push forward with the purchase.
Dominion has also promised to slash electricity bills by 5 percent to assuage Scana customers angered at being overcharged by the company for years as it sought to recoup its costs on other projects. A combination between both companies will include a more than $1.7 billion write-off of costs for Dominion associated with the two unfinished reactors at the V.C. Summer plant site. If its purchase of Scana is approved, Dominion plans to extend a natural gas pipeline it is constructing to its $6.5 million new customers in 18 states.
McGuireWoods, a longtime outside legal adviser to Dominion, is representing the company on its current deal with a team led by energy practice chair Joanne Katsantonis. Others working on the matter at McGuireWoods include energy finance and transactions partners Jane Whitt Sellers, Jay Hughes and Patrick Horne, employee benefits co-chair G. William Tysse and energy regulatory partners Joseph Reid III and Elaine Ryan and counsel Stephen Watts II.
Dominion CEO Thomas Farrell, who joined the company as general counsel in 1995, previously spent 15 years as a lawyer at McGuireWoods. Farrell is also the brother-in-law of Richard Cullen, a longtime leader at McGuireWoods who in December agreed to step aside as chair and be succeeded by litigation partner Jonathan Harmon. Former McGuireWoods associate Carlos Brown was promoted last year to general counsel at Dominion.
Morgan Lewis is providing tax counsel to Dominion through partners James Bridgeman and Joshua Brady in Washington, D.C. William Kucera, co-chair of the M&A group for the Americas at Mayer Brown, is leading a team from his firm advising Scana on its sale that includes corporate and securities partner Frederick Thomas, corporate partners Andrew Noreuil and K. Magnus Karlberg, employee benefits and compensation partner Debra Hoffman and tax transactions partner James Barry.
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