Welcome to our 2020 Year in Review. Below are some of the firm's highlights from the past year.
2020 was a year of unexpected change and extreme challenge. We began the year with optimism, and we never foresaw the scale of disruption that would be unleashed upon the world by COVID-19. Dechert adapted to these changes rapidly, as we have so many times in the past, with resilience, flexibility and compassion. We supported our people, facilitated remote working and did everything possible to stand by our clients and the communities in which we work and live.
We quickly convened a COVID-19 task force, to focus our resources in supporting our clients to adapt to global lockdowns and protect their own people and their businesses. We generated more than 150 targeted legal updates, and with other communication routes restricted, replaced many of our events with podcasts and webinars.
With so many vulnerable communities devastated by the pandemic, we channeled our pro bono contributions to where they would be most effective.
Dechert lawyers worked to release vulnerable ICE detainees from detention centers in various states; and we continue to help many small businesses and nonprofits around the world with pandemic-related issues.
Never have culture and values been more important. During 2020, the Black Lives Matter movement gave us the opportunity to live those values, take a stand and strive to make a difference. We tried to do this in many ways. One example is our pro bono work defending voting rights across many U.S. states, ensuring marginalized communities have their voices heard in important elections.
Another example is our partnership with the UK’s Aspiring Solicitors program, which aims to increase diversity in the legal profession. Through our partnership with Aspiring Solicitors, we have been able to significantly increase the diversity of our London hiring, with over half of future London trainees coming to us via Aspiring Solicitors. We are never complacent about our own diversity.
We are in the middle of a journey, one step at a time. This journey may not have an end, but we are absolutely determined to do everything we can to continue to move forward and make positive changes. With this commitment to action to address social and racial injustice, and the roll-out of an effective COVID-19 vaccine, we look forward to 2021 with cautious hope.
Some sectors coped better than others with the disruption of 2020. Life sciences, technology and financial services have always been key industries for Dechert: like us, they are globalized and based upon cultures of innovation.
In life sciences, Royalty Pharma completed nearly US$2 billion worth of acquisitions. ArchiMed’s partial sale of gene therapy specialist Polyplus shows the strong appetite for collaboration and investment between the United States and Europe. Complex patent litigation continued during lockdown, and we are helping Eli Lilly win important patent trials around the world.
In the technology sector, German LCD display business VIA Optronics’ IPO shows the trend of non-U.S. issuers coming straight to New York’s capital markets. Cloud services company AHEAD completed a cluster of acquisitions and a sale: demonstrating the value of one law firm staying close to its client throughout the entire investment lifecycle and understanding its business inside out.
During lockdowns, necessity has been the mother of invention. A decade of adoption has been compressed into six months, and our spotlight page on fintech focuses on how this will impact digital assets and blockchain, alternative and marketplace lending, the digitization of payments and of investment advice, the use of artificial intelligence and alternative data in the investment process and electronic trading. In a world more reliant on technology, cybersecurity takes on greater importance, and we had this need in mind when we recruited one of the world’s best cyber teams in Brenda Sharton and Karen Neuman.
One of the challenges of managing a business is that the bigger and more successful it becomes, the greater the demands from our clients to address their most complex and difficult matters – a challenge we relish. During 2020, Dechert has been supporting technology giant Huawei in some of the largest and most-watched criminal cases, encompassing cross-border internal and government investigations, trials, prosecutions, global grand jury subpoena responses and advice and counseling. This is where we believe Dechert is at its best – solving complex problems for our clients all over the world. This is what we did for Airbus early in 2020 – achieving one of the largest-ever settlements and ending years of government and regulatory investigations.
Sometimes disputes can be settled, as we have done by creating an innovative public trust structure for Purdue, but other disputes have to be taken to trial. When this is necessary, Dechert prides itself on its track record securing favorable outcomes in those cases, as we have done with clients as diverse as Walmart, Spanish high-tech manufacturer Ulma Forja and the state of Guatemala.
We very much hope that 2021 will bring back normality for many of us. For Dechert, this will mean much more than providing the right team delivering exceptional service for your most complex matters and transactions. It means being your trusted advocates, through good times and bad, and building even stronger relationships. We look forward to seeing you – as soon as possible.
Andrew J. Levander, Chair and Henry N. Nassau, Chief Executive Officer
A Global Investment Strategy for Cerberus
Dechert has had the privilege of helping private equity giant Cerberus execute its global investment strategy across established and developing markets in the United States, Europe and Asia.
“We have worked with Cerberus on several deals in recent years,” says Mark Thierfelder, chair of Dechert’s private equity practice, “and 2020 presented us with opportunities to work on several exciting transactions spanning multiple jurisdictions. Cerberus’s sale of Covis Pharma to Apollo was one of the year’s most significant deals, involving many legal and commercial complexities.”
The Covis deal involved many U.S. elements and was also governed by English law – so this was an opportunity to take the best from each jurisdiction and make a joined-up cross-border deal. “To do this, we had to create a unique structure,” says partner Gareth Clark, “a European deal format supported by U.S.-style financing. I’ve never seen this type of situation before.”
Six Dechert offices were involved, touching several different practice areas: private equity/M&A, life sciences, intellectual property, finance, tax, employee benefits, labor, environmental, antitrust, white collar and real estate. “The deal management side added another layer of complexity,” adds London partner Chris Field.
Dechert’s work in 2020 also included a landmark deal for Cerberus Frontier – a platform at the forefront of investing in some of the fastest growing economies across Asia and Africa. A cross-border team led by Singapore partner Siew Kam Boon and counsel Timothy Goh, alongside Thierfelder, oversaw the acquisition of a stake in Mongolia-based MCS Group, which specializes in the telecommunications and consumer goods sectors. “This was a milestone for developing Asian markets,” says Boon, “as it is the largest-ever private equity investment in Mongolia.”
Most recently, in October, Dechert partnered with Cerberus on the acquisition by one of its affiliates of National Dentex Labs, the largest network of fully-owned dental labs in the United States. “This latest deal is another in the pipeline during a very active year for Cerberus,” says Thierfelder. “Each of these transactions was unique, but they all show the value of a close relationship, where the law firm knows its client inside out and we operate as one single team.”
As pandemic-inspired restrictions brought global travel to a halt, Chile-based LATAM Airlines, Latin America’s largest carrier, sought Chapter 11 protection. Dechert was retained to represent the Official Committee of Unsecured Creditors, the fiduciary appointed to protect the interests of LATAM’s unsecured creditors.
Dechert scored a major victory in September when the bankruptcy court refused to approve an insider financing deal between LATAM and its major shareholders that would have shifted hundreds of millions of dollars in value to those shareholders at the expense of creditors.
LATAM’s proposed US$2.45 billion financing package to fund the bankruptcy included a provision allowing the shareholder lenders to convert a US$900 million portion of the loan into discounted shares in the reorganized company, netting them a huge payoff at creditors’ expense and guaranteeing them continued control of the airline after the bankruptcy.
Opposed by four heavyweight law firms acting for the other parties, Dechert’s restructuring team, led by Allan Brilliant, objected to the proposed financing. In just one month, Dechert reviewed thousands of documents, took a dozen depositions, prepared three expert reports, and submitted more than 200 pages of briefing addressing novel legal issues. The team also handled a three-day trial, delivering opening and closing arguments and conducting direct and cross-examinations via Zoom.
To show the court that LATAM could get a better deal, Dechert lawyers also worked alongside the Committee’s investment bankers to develop alternative financing on superior terms, leading the shareholders to improve their proposal by approximately US$500 million.
The extraordinary effort paid off. On September 10, a New York bankruptcy judge rejected LATAM’s financing proposal, ruling as a matter of first impression that the equity-swap provision violated the Bankruptcy Code. Within days, the shareholders dropped the equity conversion feature.
On September 18, the court approved a revised US$2.45 billion financing plan, which was supported by Dechert’s client, adding key creditor protections while also saving the airline – and its creditors – almost half a billion dollars over the original proposal.
The New West Side Skyline: Dechert's Role in Revitalization
One Manhattan West, a new two million square foot tower built by developer Brookfield Properties, brings to one of New York’s emerging districts an ultra-Class A office building.
The building boasts trendsetting tenants, dynamic on-site lifestyle amenities, robust infrastructure, and spectacular views. One tall order for this 67-story building was implementing a fixed-rate seven-year CMBS mortgage and mezzanine financing package in the middle of the COVID-19 pandemic.
In August, Dechert represented a group of sophisticated lenders – including Deutsche Bank, Citi, a London-based bank, JP Morgan and Wells Fargo – in connection with the origination, securitization, and syndication of US$1.8 billion of mortgage and mezzanine debt. The transaction was the second-largest single-borrower CMBS issuance in 2020, and the largest since the disruption caused by the pandemic.
“Beyond the legal expertise we bring,” says co-chair of Dechert’s global finance group Dave Forti, “our team takes pride in how we assist lenders and borrowers to finance projects such as One Manhattan West, which create a place for forward-thinking companies, influential brands and innovative consumers to intersect.”
2020 saw a renaissance in the use of commercial real estate collateralized loan obligations (“CRE CLOs”) as a valued technology in structured finance.
In the vanguard of the CRE CLO resurgence was the US$1.5 billion securitization for investment manager Blackstone Mortgage Trust, led by Dechert’s co-chair of global finance Richard Jones, along with finance partner Stewart McQueen.
The Blackstone securitization is, to date, the largest-ever issuance for a CRE CLO, securitizing assets to create US$1.5 billion of liquid, marketable securities.
The deal broke new ground for the CRE CLO format, in providing the issuer Blackstone with the ability to refinance the securities in whole, and re-price one or more classes of securities, in both cases on or after the payment date following the non-call period – the time during which the security cannot be prematurely redeemed.
“Dechert is constantly pioneering new structured finance formats that enable our clients to realize their business aims,” says Jones. “The Blackstone securitization is a product of the emphasis on creative thinking within the global finance team, as well as standing out as the highest-value CRE CLO ever.”
Largest-ever CRE CLO
2020 saw a renaissance in the use of commercial real estate collateralized loan obligations (“CRE CLOs”) as a valued technology in structured finance.
In the vanguard of the CRE CLO resurgence was the US$1.5 billion securitization for investment manager Blackstone Mortgage Trust, led by Dechert’s co-chair of global finance Richard Jones, along with finance partner Stewart… Continue Reading
Diversity & Inclusion
Racial Justice Initiatives
Diversity and Inclusion Toolkit
Dechert launched a comprehensive Diversity and Inclusion Toolkit, which is intended to deepen our understanding of racism, anti-racist practices and ally-ship. It is available on the firm’s intranet, and includes media articles, podcasts, book recommendations and access to training. Juneteenth – A Day to Reflect and Recharge Dechert was a market leader in giving time off to commemorate Juneteenth on June 19, 2020. Dechert encouraged our community to invest this time in learning about the tragic killing of George Floyd and others, the events of the last few months, and the history that preceded them.
Stand Against Racism Town Hall and Speaker Series
Dechert’s Town Hall and Speaker Series addresses recent events related to racism and social justice in the United States and around the world, as well as the impact on our mental health and how to deal with the trauma. Our objectives are to provide a safe space for Dechert's people to learn, share ideas and support each other. Speakers have included sociologist Courtney Cogburn, clinical psychotherapist Jacquesline Walker, writer and comedian Baratunde Thurston, pediatrician Jacqueline Dougé and former football player and ESPN commentator Shaka Hislop, among many others. Dechert hosted a conversation for clients and our employees on human dignity and criminal justice reform in the United States with Kevin Richardson, a member of the Exonerated Five, in recognition of Dechert’s commitment to fighting systemic racism. The investigation of the wrongful conviction of Mr. Richardson and the other members of the Central Park Five as teenagers raised questions regarding police coercion and false confessions, as well as the vulnerability of black and brown youths in the criminal justice system.
Technology and Innovation
The pandemic triggered new business challenges, evolving clients’ needs and a summons to rethink the way we all work. At Dechert, we intensified our efforts to create a culture that fosters the generation and implementation of ideas to improve our client services. We formally began including billable time credit for innovation, created a multidisciplinary team to lead all innovation initiatives across the firm, and formed an innovation incubator to focus specifically on strategic initiatives. These exciting projects include a wide range of bespoke in-house products that address specific client needs.
Highlights in innovation from 2020 included:
We created a unique software tool named DICE (Dechert IBOR Contract Explorer), which scans millions of contracts potentially affected by LIBOR quickly and efficiently in order to aid transition of these documents to the new inter-bank offered rates.
Dechert’s technology team built an extraction and search platform for our international trade team that quickly reviews thousands of pages of documents for key terms. These technology-assisted reviews have to be done internally due to government regulations.
Our International Arbitration team generates a heavy document trail, but in such a large global group information tends to be stored in office-specific systems and not widely accessible. So Dechert created its own tailored document management system – SIA@D (Search International Arbitration@Dechert).
Championing the rights of voters
Dechert led the charge to protect the rights of all eligible citizens to vote safely and securely in the 2020 election despite the challenges posed by the COVID-19 pandemic and increasingly restrictive voting laws adopted by many states. The firm litigated cases on a pro bono basis on behalf of leading civil rights organizations including the NAACP and the League of Women Voters in numerous states, including Mississippi, Ohio, Pennsylvania, Tennessee, Texas and Wisconsin. Dechert’s work in the area of voting rights is led by New York-based litigation partner Neil Steiner, who was recently awarded the ABA’s Pro Bono Publico Award for 2020 for his work in this area.
Defending reproductive rights
Dechert supported the Center for Reproductive Rights in its efforts to combat efforts to enact de facto abortion bans in the wake of the COVID-19 pandemic. In Oklahoma, we challenged an executive order issued by the state’s governor on March 24, 2020 that mandated a moratorium on elective surgeries and minor medical procedures. Though the stated purpose was preserving PPE and hospital resources, the governor subsequently required the postponement of all abortion-related services until April 30. We represented three clinics in Oklahoma that were forced to close their doors and deny care to pregnant women. We challenged the executive order as an unconstitutional ban on abortion, and courts ruled in favor of our clients at each step of the way.
Advocating for at-risk prisoners
Dechert filed a series of individual and class actions aimed at forcing correctional institutions to comply with public health recommendations to prevent the spread of COVID-19, and/or to release ICE detainees, pretrial detainees, and prisoners at an increased risk of serious complications from COVID infection. In Connecticut, Dechert teamed up with the ACLU to bring a class action suit on behalf of the 11,000 incarcerated people housed in 18 Connecticut Department of Correction (DOC) facilities. When we commenced the action in April, less than a month after the first inmate tested positive, the DOC had the highest infection rate in the state, but had failed to institute any new policies to slow the spread. After the state unsuccessfully moved to dismiss the case, the parties entered settlement negotiations that ultimately reached an agreement in July. The settlement employs an independent monitoring panel of public health experts tasked with implementing best practices and prioritizing the release of medically vulnerable inmates.
Spotlight on Fintech
As people all over the world change the way they spend, invest and lend money, businesses need to be agile - and 2020 was a game-changer for financial technology.
“Fintech at its most basic is the intersection of new technology with financial services,” says partner Mark Perlow, “so with our experience in financial services and financing, and our culture of innovation, fintech is a natural strength for Dechert.”