THE AM LAW DAILY

SURVEYS AND RANKINGS

MAGAZINE

SPECIAL REPORTS

The Work

December 18, 2009 4:21 PM

A Year Later, Simpson Thacher Still Treasury's TARP Go-To

Posted by Zach Lowe

Simpson, Thacher & Bartlett is advising the U.S. government on the thorny matter of how and when it should sell its equity stake in Citigroup, according to two sources familiar with the matter. Simpson partner Lee Meyerson is leading the team, those sources said; Meyerson and a firm spokeswoman did not respond to requests for comment.

It has not been the best week for Citi (and, really, we could have said that about most weeks over the last two years). The bank on Monday triumphantly announced plans to plans to repay the government $20 billion and exit a loss-sharing deal in which the government agreed to backstop losses on nearly $300 billion in toxic assets. Citi also announced that the U.S. government would begin unwinding its 34 percent ownership stake in the bank via a stock sale. 

Scratch that last part. After low demand caused Citi to price its equity sale at $3.15 per share--10 cents lower than the amount at which the U.S. government purchased its equity in Citi--the federal government decided to hold onto most of its equity in Citi for the time being, according to Reuters and The New York Times. The main law firm involved in these talks for the government--to the extent that any are really involved--is Simpson Thacher, two sources familiar with the matter say. But a third source directly familiar with the matter cautions that Simpson's role is limited to drawing up documents related to transactions; the firm is not involved in decisions as to how and when to sell equity in Citi, the source says. 

Simpson's involvement isn't a huge shock. A year ago, we reported the government had chosen Simpson among six candidate firms for general bailout advice; the firm signed a six-month contract last October to serve as Treasury's lead bailout adviser in exchange for $300,000--a smaller than expected amount, considering the nearly 4,000 hours Simpson expected to put in during that time. (As you may recall, Treasury reached out to six firms about the work, and only two expressed interest; the other four, a group that included Davis Polk & Wardwell and Cleary Gottlieb Steen & Hamilton, were unnerved by what experts characterized as strict conflicts rules in the proposed contract. Simpson chair Richard Beattie denied that the conflicts requirements were onerous and characterized the bailout work as "an honor.")

It is unclear if Simpson is acting now under a renewed contract. The Treasury Department's list of contracts does not list an updated deal for Simpson, and a Treasury spokesperson was not immediately available for comment.

Make a comment

Comments (0)
Save & Share: Facebook | Del.ic.ious | | Email |

Reprints & Permissions

Comments

Report offensive comments to The Am Law Daily.

Post a comment

If you have a TypeKey or TypePad account, please Sign In





By: TwitterButtons.comhttp://www.facebookloginhut.com/facebook-login/


[email protected]




From the Law.com Newswire

Sign up to receive Legal Blog Watch by email
View a Sample

Advertisement