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March 13, 2012 6:30 PM

For Paul Weiss, a Role Reversal on Apollo's $703 Million Water Park Buy

Posted by Brian Baxter

Paul, Weiss, Rifkind, Wharton & Garrison has been busy handling various matters for Apollo Global Management over the past several months, thanks in large part to a seven-partner raid on O'Melveny & Myers last year.

But on Tuesday, Paul Weiss's lawyers were across the table from the private equity giant on its $703 million acquisition of water park operator Great Wolf Resorts, which is structured as a $165 million cash and tender offer that also includes Great Wolf's debt. Great Wolf has accepted the offer and adopted a shareholder rights plan to protect against any other unwanted bids.

Paul Weiss corporate partners Jeffrey Marell, Kelley Parker, and Lawrence Wee in New York took the lead advising Madison, Wisconsin–based Great Wolf on the transaction.

Great Wolf appears to have been a Paul Weiss client since at least 2010, according to a September 2010 SEC filing identifying the firm as federal income tax counsel to the company. Paul Weiss also helped Great Wolf close a $230 million offering earlier that year.

Paul Weiss declined to comment on its representations of Great Wolf and Apollo when contacted Tuesday by The Am Law Daily. Apollo's chief legal and compliance officer, John Suydam, also did not immediately respond to a request for comment on whether the New York–based private equity firm approved Paul Weiss's representation of Great Wolf.

But one source familiar with the deal, who requested anonymity in order to speak freely, confirms that both Apollo and Great Wolf granted the firm a conflicts waiver to handle the transactional work. Paul Weiss would have good reason to seek the appropriate sign-offs.

Paul Weiss has taken on a plethora of Apollo-related work since solidifying its ties to the private equity firm by bringing on the O'Melveny group about a year ago. (Apollo's Suydam is the former head of O’Melveny's M&A practice.)

Apollo has tapped Paul Weiss to advise on the initial public offering of portfolio company Caesars Entertainment—work that once belonged to O’Melveny when Caesars was known as Harrah’s—as well as on its December acquisition of investment manager Stone Tower Capital.

Paul Weiss is also advising an Apollo-led investor group seeking to acquire the oil and gas exploration and production units of El Paso Corporation through a $7.2 billion leveraged buyout, according to our recent reports.

(Questions about a conflict of a different kind have hovered over the sale of the El Paso units, which is contingent on the recently approved $38 billion sale of the larger company to Kinder Morgan. El Paso's lawyers from Wachtell, Lipton, Rosen & Katz reportedly told their client not to retain Goldman Sachs as financial adviser on the deal because of Goldman's sizable investment in Kinder Morgan, but were overruled. Delaware chancellor Leo Strine, Jr., the subject of a recent profile in The American Lawyer, delved into the El Paso deal's particulars in a decision earlier this month, according to sibling publication The Am Law Litigation Daily.)

As outside counsel on the Great Wolf acquisition, Apollo turned to another firm with which it is well acquainted: Akin Gump Strauss Hauer & Feld. Akin Gump corporate partner Adam Weinstein, private equity and finance partners Rosa Testani and Brian Kim, M&A partner Jeffrey Kochian, and corporate counsel Tony Feuerstein are leading a team from the firm working on the matter.

Akin Gump advised Apollo late last year on the $772 million sale of its Parallel Petroleum portfolio company to Samsung and Korea National Oil. Wendy Dulman, global tax director for Apollo, was an Akin Gump partner for more than a decade before joining the private equity firm in 2008.

An SEC filing by Great Wolf shows that Dulman and Apollo vice president and secretary Laurie Medley, an Akin Gump and O'Melveny alum, are part of an in-house team at the private equity firm working on the proposed purchase of the water park operator, which was formed in 2004 and runs resorts throughout the Midwest.

A strategic review committee of Great Wolf’s board of directors has retained Young Conaway Stargatt & Taylor as special Delaware counsel, according to an SEC filing by the company. Attorney and board member Elan Blutinger serves on the strategic review committee. Great Wolf's general counsel is William Robinson.

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Weinstein, Testani and Medley all hail originally from O'Melveny. That firm had a good thing going.

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