Who?s Who: Part Four (Old Players, New Moves)

Last Thursday, The New York Times estimated that the government (and, thus, taxpayers) has assumed at least $7 trillion in financial obligations in its endeavors to bail out half of Wall Street in recent months. That figure represents more than twice China?s 2007 GDP. If broken into $100 bills, it could form a stack connecting Vault HQ to Istanbul. If chopped into twenties, it would fill the cargo hull of the Sirius Star, with an extra trillion or so left over for the residents of Puntland (we?re sure the pirates would be OK with that windfall). The point is that there?s a lot of money changing hands, and where you find money, you?re bound to find lawyers. Without further digression, we bring you up to speed on new moves made by old players in round four of Who?s Who:

Davis Polk: The firm helped Citigroup iron out a rescue deal with the federal government in mid-November 2008; under the terms of the agreement, taxpayers would assume certain future losses on some $306 billion in dubious Citi assets. Davis Polk also helped the Federal Reserve Bank of New York cobble together a $200 billion spending program intended to loosen the asset-backed securities market. These deals followed on the heels of two notable September gigs we?ve mentioned previously: Its representation of Citigroup in its controversially spurned agreement to buy Wachovia?s banking operations (Wachovia ditched the Citi deal for a juicier offer from Wells Fargo) and of the U.S. Treasury Department in the government takeover of 80 percent of AIG.

Cleary Gottlieb: Cleary Gottlieb has kept busy since its bustling September, when it represented Morgan Stanley during the government?s Fannie Mae and Freddie Mac takeovers, the government during Lehman Brothers? Chapter 11 filing, Barclays PLC as it bought Lehman?s North Americans banking and capital markets holdings, and Lehman itself as a pair of private equity firms bought its asset management unit (got that?). The firm devoted much of October and November working with Citigroup?first helping it complete the subsequently abandoned purchase of Wachivia?s banking division, then advising the Federal Reserve Bank of New York on its portion of a bailout that sets up Joe Taxpayer to assume certain anticipated losses on some $306 billion in questionable Citi investments.

Cravath: In late November, Cravath advised Citigroup?s board of directors in the deal that, among other actions, authorized the government to assume potential future losses on some $306 billion in dubious Citi assets. Earlier in the month, Cravath bolstered its financial clout by luring John White, a one-time Cravath partner who?d become the director of the SEC?s corporate finance division, back into the fold. These moves followed the firm?s previously noted representation of Merrill Lynch?s board of directors as Bank of America bought out the financial conglomerate and of JPMorgan as it raised $10 billion via a common stock offering after it acquired WaMu. None of these appointments, however, were apparently lucrative enough to keep Cravath from announcing last month that attorneys should prepare for bonus cuts at year?s end and ?significantly reduced or no year-end bonuses next year.?

Gregory P. Joseph Law Offices: The 15-lawyer Manhattan litigation boutique remains at Citigroup?s side as the bank seeks some $80 billion from Wells Fargo and Wachovia. Citi filed the suit in October after Wachovia backed out of a deal to sell its banking holdings to Citi in favor of a larger deal with Wells Fargo.

Boies, Schiller & Flexner: Nothing especially new here: Boies Schiller (along with Sullivan & Cromwell) continues to rep Wachovia as it fights Citigroup?s mega-lawsuit over Citi?s failed attempt to buy Wachovia?s banking division; partners George Frampton and David Boies remain at the helm.

Freshfields Bruckhaus Deringer: Freshfields, which greased client Nomura Holdings? September acquisition of Lehman Brothers? non-U.S. investment banking operations, advised longtime client the Bank of England in October during the government?s ?37 billion bailout of the nation?s three largest banks.

Sullivan & Cromwell: Subprime Superman H. Rodgin Cohen and his minions continue to defend Wachovia against the $80 billion lawsuit Citigroup filed after Wells Fargo stole Wachovia?s favor with a fatter purchase offer in October. This, of course, comes in the wake of one of the more memorable single-month blitzkriegs by a firm in the modern era.

Simpson Thacher: The U.S. Treasury Department tapped Simpson Thacher as lead counsel on the government?s structuring of its $700 billion bank bailout plan. The firm?s been busy in 2008: As mentioned in previous Who?s Who?s, Simpson Thacher represented the Federal Reserve Bank of New York?s directors during the Bear Stearns collapse, Lehman Brothers? directors as the bank liquidated, Wachovia throughout its soon-to-be-abandoned deal with Citigroup, and WaMu during its sale to JPMorgan.

As always, please let us know if we?ve missed anything by commenting below.

And coming tomorrow...Who?s Who, Part Five: Newbies to the Scrum!

- posted by ben fuchs