THIS IS AN ADVERTISEMENT.
ACCOMPLISHING MORE. TOGETHER.
Year in Review 2015

CORPORATE & TRANSACTIONAL

Value creation is the watchword for 2016
A LETTER FROM THE DEPARTMENT CHAIR

Susan B. Zaunbrecher | Cincinnati, OH

Value creation. On paper or on a website, they’re just two meaningless words.

As Chair of the Corporate Department, I want our group to give them life. It is our mission to give real meaning to value creation by working with our clients to chart their path to success.

Value creation is getting to know our clients and truly understanding not only their needs but their goals and implementing strategies tailored specifically to them. It’s seeing the holistic picture – what do they need from us today? Tomorrow? In a month? What about in five years?

Ours is a partnership with our clients. We work collaboratively to find the best, most innovative, cost-effective solutions to their legal issues. Our firm’s extensive, continued growth enables us to provide better value to our clients by gaining talented attorneys in more practice areas in more regions, which enhances our ability to provide services to our clients. From the largest publically-held corporations to the smallest family-owned businesses, we listen and anticipate clients’ needs, then mobilize to meet them.

Through our firm’s growth, we have also gained strength in specific areas of corporate law and industries. In 2015, we grew our capabilities in many areas, among them the energy industry, financial institutions and regulatory matters, and cyber security. As we begin 2016, we are adding a Corporate Growth and Exit Planning group to the Corporate Department, which we’ll introduce to you more formally later this year.

Our already well-established Banking & Financial team grew even stronger with the addition of more former regulators and more industry insiders. We know how difficult it is to navigate the complex laws and regulations, so we’ve built a team of attorneys who have held senior positions at the Federal Deposit Insurance Corporation (FDIC), the Resolution Trust Corporation (RTC), the Office of the Comptroller of the Currency (OCC), the Ohio Division of Financial Institutions and the Kentucky Department of Financial Institutions, in addition to attorneys with significant experience as in-house counsel at financial institutions.

We’ve also added new talent with experience in the energy area. While the depressed pricing for oil and gas has brought challenges to our energy clients, we continue to assist with title work, risk management and contracts. As we continue into 2016, we expect the industry challenges to continue, so we also anticipate that we will be assisting with increased business restructuring matters. We have expanded the team by adding attorneys in Charleston and Washington and expanded our focus to adjust to our clients’ evolving needs.

The hacking of companies’ data is daily headline news and can cause irreparable harm to the most reputable business. In response, we have mobilized a multi-disciplinary cyber security team and staffed it with corporate, intellectual property and litigation attorneys with specific knowledge to help in times of need, and, most importantly, to protect your business’ information so the need does not arise.

One further element of our partnership is helping when it’s time to start a business, grow it or let it go through the process of mergers and acquisitions. Included in 2015 were significant deals in the areas of manufacturing, energy, technology, financial institutions and healthcare industries. We had a busy year and look to continue this trend in 2016.

With the Fed’s first interest rate hike in almost a decade, there will be much focus on the economy to see how this impacts business in this country and globally. We are here to advise you. When you succeed, we succeed.

The most important information I can provide is this: Dinsmore is a team of attorneys – full-service throughout the U.S. No matter what your need, part of the value created for you and your business is a team consisting of familiar faces invested in your success both as your attorneys and as your partners. Value creation – those two words can help you accomplish your goals more effectively, efficiently and decisively in 2016.

Highlights


Cybersecurity

The Most Important Cybersecurity Developments of 2015:
What You Need to Know for the Year Ahead

Jennifer Orr Mitchell | Cincinnati, OH
Kurt R. Hunt | Cincinnati, OH

Now, more than ever, organizations need to stay up-to-date on the ever-changing landscape of cybersecurity. Some of the most important cybersecurity developments of 2015, including data breaches and governmental enforcement, judicial and regulatory decisions, changing cybersecurity standards, and a major international legal decision are instructive for companies across all industries as they head into 2016.

There are developments with which every organization should be familiar as it updates and implements changes in its cybersecurity policies and practices. In the following article, we propose a strategy for organization-wide compliance in this dynamic and challenging environment.

Read more

BANKING MARIJUANA: ARE FINANCIAL
INSTITUTIONS THEIR CUSTOMERS’ KEEPER?

Susan B. Zaunbrecher | Cincinnati, OH
John F. Costello | Chicago, IL

There has been much focus recently on the banking problems presented by individuals and entities in states where it is now legal, under state law, to manufacture, distribute or dispense marijuana. Since this activity remains illegal under United States federal law, such activity may be tantamount of money laundering or participation in a criminal enterprise. Recent federal guidance from the Department of Justice and the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has attempted to reduce fears among financial institutions choosing to do business with marijuana-related businesses (MRBs). The decision to do business with any person, whether depositor or borrower, ultimately rests with a financial institution’s management and board.

Even for financial institutions choosing not to directly service the emerging marijuana industry, the issue that arises is where the person that a financial institution does business with is doing business with an MRB. In other words, financial institutions need to be concerned about their customers’ customers. Since financial institutions risk prosecution or forfeitures for violations of federal law, they are assessing account relationships that are even peripherally related to marijuana businesses and discontinuing or thoroughly reviewing those relationships. There is also the issue that many financial institutions are likely interacting with MRBs, and facilitating credit or debit card payments, but they simply do not know it because they cannot identify these MRBs.

Read more

KENTUCKY CITY FILES CHAPTER 9:
PRECEDENT-SETTING IMPLICATIONS FOR BOND HOLDERS

Kim Martin Lewis | Cincinnati, OH
Patrick Burns | Cincinnati, OH

First it was Detroit, then Hillview, Kentucky. While not as recognizable a name, Hillview’s Chapter 9 bankruptcy case provides another opportunity to evaluate the treatment of different creditor constituents in a municipal restructuring, including holders of municipal bonds.

After the Kentucky Supreme Court declined to review a multi-million dollar judgment against Hillview, which is over six times its annual budget, the city was unable to negotiate a settlement and opted to pursue Chapter 9 to restructure its debt. Chapter 9 of the United States Bankruptcy Code allows municipalities such as Hillview to seek a Plan of Adjustment to restructure existing debt and reduce payment obligations, allowing a municipality to further its public mission in a financially stable environment.

How does such a large judgment relative to the annual budget of a municipality affect the eligibility of a municipality to pursue a Plan of Adjustment? What does this mean for bond holders and cities that rely on municipal bonds for funding of operations and other local projects? These are among the many potential questions that the Bankruptcy Court in the Western District of Kentucky may evaluate as the Chapter 9 case moves forward.

With continuing financial challenges mounting for many municipalities, including struggles in increasing revenues from existing property owners and the increased operating costs from pension obligations, as well as risks of large judgments against municipalities – we may see more cities evaluating their options to satisfy their creditors, including Chapter 9. As more cities face budget issues, rating agencies will also be more cognizant of the risk and the cost of borrowing may increase, further threatening the solvency of municipalities.

While this case is in its initial stages, the ramifications could impact both the bankruptcy and bond areas of law. If you have questions about this case, please contact a Dinsmore attorney.

2015 M&A HIGHLIGHTS

Dinsmore counsels Lexmark International to acquire Kofax Limited for $1 billion

Susan B. Zaunbrecher | Cincinnati, OH
Brian C. Judkins | Cincinnati, OH
Mary K. (Bess) Newman | Cincinnati, OH

In a major technology deal, Dinsmore counseled Lexmark International, Inc., a Lexington, KY manufacturer of laser printers and provider of enterprise software services, the acquisition of Kofax Limited, a software provider incorporated in Bermuda and headquartered in Irvine, CA. Pursuant to the Merger Agreement, Lexmark paid $11.00 per share in cash to acquire all issued and outstanding common shares of Kofax for a total enterprise value of approximately $1 billion.

“This was a very competitive public bid process,” said Susan Zaunbrecher, Chair of the Corporate Department. “The relationship we’ve built with Lexmark was crucial to how smoothly this acquisition was completed.”

Dinsmore has served as deal counsel to Lexmark in more than 10 transactions, including the acquisition of Perceptive Software, Inc., Lexmark’s first acquisition in the enterprise software industry, and the divestiture of Lexmark’s inkjet business.

Blackhawk Mining Acquires Patriot Coal Corporation

Chauncey S.R. Curtz | Lexington, KY

In late October, a transaction closed in which Blackhawk Mining (Blackhawk) purchased most of the assets of Patriot Coal Corporation (Patriot) out of bankruptcy. Dinsmore served as counsel to the acquirer, Blackhawk, who had previously purchased other portions of Patriot’s assets in 2014.

The acquisition resulted from Patriot filing bankruptcy for the second time in three years, which added several layers of complexity to the transaction. Many parties were involved in the deal, including among others, the sellers, lenders, creditors, lessors, suppliers, and the United Mine Workers of America, whose existing contract with Patriot was rejected and replaced with a new contract negotiated with Blackhawk. Blackhawk’s bid was selected as the stalking horse offer, but several other interested buyers submitted competing offers, and an aggressive auction process ensued.

The total value of the transaction approached $1 billion. In addition to a multi-tiered financing structure involving the issuance of new equity securities in Blackhawk and the restructuring of Patriot’s and Blackhawk’s prior loan facilities with over $900,000,000 in new debt, the deal involved the assumption by Blackhawk of substantial reclamation and other liabilities, the posting of new bonds with state environmental authorities, and agreements to perform reclamation work on mining sites purchased from Patriot by the Virginia Conservation Legacy Fund.

“This was a very large and difficult transaction, which took months of work by numerous attorneys and staff in many departments and office locations,” said Susan Zaunbrecher, Corporate Department Chair. “The team of Dinsmore attorneys worked cohesively for our client, and, in the end, beat out a lot of impressive competition.”

Most of the six active mining complexes in the acquisition are located in West Virginia, with additional properties and mines in Kentucky, Ohio, Indiana and Illinois. Blackhawk saw the Patriot acquisition as an opportunity to expand its presence in the metallurgical coal market, as a complement to its prominent position as a producer of thermal coal.

“The demand for all coal is down significantly,” said Chauncey Curtz, Chair of the Natural Resources Group. “As a result of this deal, our client is well-positioned to survive the downturn and enjoy continued success as a low cost producer of both thermal and metallurgical coal for many years to come. That’s the most important thing to us.”

Cross Border Transactions

Joanne M. Schreiner | Cincinnati, OH
Marci L. Morgan Cox | Cincinnati, OH
Anthony J. Bickel | Cincinnati, OH

Dinsmore represented Halma PLC in acquiring Firetrace USA, LLC, which closed in October 2015. Firetrace, based in Scottsdale, Arizona, designs and manufactures automatic fire detection and suppression systems. It has subsidiaries in a number of jurisdictions, including the United Kingdom and the United Arab Emirates. We advised Halma on how to structure the acquisition in order to achieve the most favorable business and legal outcome, including tax treatment. We prepared and negotiated all acquisition documents and managed due diligence and regulatory compliance within the foreign countries and the United States.

Dinsmore also represented Global Excel Management Inc. in acquiring Olympus Managed Healthcare, Inc. and its affiliates in both the U.S. and Mexico. Olympus is a leading provider of international health claims administration and cost management services. The acquiring companies involved both Canadian and U.S. entities, and the targets involved both U.S. and Mexico entities. We counseled Global Excel through both the acquisition and the financing pieces of the transaction, which presented some unique challenges including cross-border tax and financing issues. The transaction involved collateral and assets in three separate countries.

REAL ESTATE:
ROTO ROOTER ROLLS OUT PROTOTYPE NATIONAL SERVICE FACILITIES

Richard B. Tranter | Cincinnati, OH

Roto-Rooter, a subsidiary of Chemed Corporation, rolled out its new prototype service facilities in Dayton, Ohio and Indianapolis, Indiana in 2015. This rollout is the start of a national effort to present an enhanced and uniform appearance for all future Roto-Rooter offices. As the first freestanding facility built since 1993, the $6.1 million prototype is 30,000 square feet, comprised of a two-story 10,000 square foot office component and a 20,000 square foot warehouse service component. For each location, we acted as project counsel responsible for the negotiation of the land acquisition, easement and construction agreement. We also either directly obtained or facilitated the necessary zoning and other land use approvals. In effect, we represented the client from acquisition through the turnkey opening of the facility. We look forward to continuing our service to Roto-Rooter as it rolls out this prototype to locations across the country.

ACMA HONORS TWO DINSMORE ATTORNEYS

Joanne M. Schreiner | Cincinnati, OH
Julie A. Schoepf | Cincinnati, OH

Joanne M. Schreiner was named the Ohio State Chair for the American College of Mortgage Attorneys (ACMA).

ACMA is a highly selective group, and attorneys must distinguish themselves as one of the best in the mortgage law industry and meet rigorous criteria to receive an invitation for membership. Schreiner has been an ACMA Fellow for eight years and assumed the new position in January of 2015. As a State Chair, Schreiner will be the go-to source for any Fellow who has questions about Ohio mortgage laws.

Julie A. Schoepf was accepted as a Fellow in the ACMA. Fellows are considered to be the best of the best in the mortgage law industry. To be considered for membership, attorneys must meet rigorous criteria to demonstrate a significant real estate mortgage practice and also be nominated by an ACMA Fellow.

Congratulations to Joanne and Julie!

NEW TALENT: CORPORATE

Attracting top legal talent is an essential element of our strategy to help a diverse client base Accomplish more. Many of America’s most talented corporate lawyers have chosen Dinsmore.

Charleston, WV
William Snider, III (Partner)


Chicago, IL
John F. Costello (Partner)


Cincinnati, OH
David DeVita (Partner)

Molly K. Lampe (Of Counsel)

Natalie H. Rauf (Of Counsel)

Adam J. Centner (Associate)

Maxwell W. Gerwin (Associate)

George L. Kiamos (Associate)

Daniel R. Richey (Associate)

Emily C. Rotella (Associate)


Columbus, OH
Rebekah G. Weiss (Of Counsel)

Matthew A. Brandt (Associate)

Michael A. Tipton (Associate)

Jana L. Willsey (Associate)

Stephanie L. Zwerner (Associate)
Dayton, OH
Sam G. Brinker (Associate)

Marcie R. Hunnicutt (Associate)


Huntington, WV
M. Edward Cunningham, II (Partner)

Daniel A. Earl (Partner)

Thomas H. Gilpin (Partner)

Janet Smith Holbrook Partner)

Daniel J. Konrad (Partner)

Thomas J. Murray (Partner)

Christopher J. Plybon (Partner)

Richard J. Bolen (Of Counsel)

Audy M. Perry, Jr. (Of Counsel)

Bryon D. Collier (Associate)

Adam T. Harlow (Associate)

Matthew L. Ward (Associate)


Lexington, KY
Eric Lycan (Partner)

Martin B. Tucker (Partner)

Charles H. Krebs (Associate)


Louisville, KY
Clifford H. Ashburner (Partner)


Morgantown, WV
Paige K. Vagnetti (Associate)


Philadelphia, PA: Center City
Richard M. Berman (Partner)

Frank A. Mayer, III (Partner)

Jonathan L. Levin (Of Counsel)


Philadelphia, PA: Wayne
Agatha C. Mingos (Associate)


Pittsburgh, PA
James R. Carlisle, II (Partner)

Erin C. Farabaugh (Partner)

Tonya B. Johnson (Associate)

Brigette R. Koreny (Associate)


Washington D.C.
Joel deJesus (Partner)