Legal News

Ethics Expert Fight! Or, What?s Next in the Airgas/Cravath Battle

By Ashby Jones

When last we checked in on the Air Products/Airgas saga, in which counsel to Air Products, Cravath, Swaine & Moore, was increasingly moving center stage, the parties were gearing up for a hearing, to be held yesterday, over whether Cravath could continue its representation of Air Products.

But since then, oh so much has happened.

The quick backstory: At issue is a $5.1 billion attempt by Air Products to take over Airgas. Litigation surrounding the offer has broken out on two fronts. Earlier this month, Air Products sued Airgas in Delaware state court, arguing that the company was failing to consider its offers. The next day, Airgas sued Cravath in Pennsylvania state court, arguing that because the firm used to represent Airgas, it was conflicted and therefore should be barred from representing Air Products.

Last week, a Pennsylvania judge denied Airgas’s motion for a temporary restraining order barring Cravath from continuing the work. Since then, Cravath filed a motion requesting that the Pennsylvania litigation be removed to federal court. Both sides, in the meantime, have filed extremely pointed letters with Chancellor William Chandler at the Delaware’s Court of Chancery.

According to the AmLaw Litigation Daily’s Zach Lowe, Airgas, which has tapped Wachtell Lipton, began the exchange of correspondence Monday, when it sent a letter to Chandler arguing that a Pennsylvania courtroom was indeed the proper place to figure out the Cravath issue. In response, Air Products sent its own letter to Chandler, urging him to decide the issue himself and accusing Airgas of trying to “circumvent” Chandler’s authority by suing in Pennsylvania.

In the meantime, look for a full-fledged battle of the experts to break out any day. Airgas lobbed the first volley on this front, retaining Penn’s Geoffrey Hazard. Hazard issued an opinion letter in which he claims Cravath was working under “a clear and serious conflict of interest” while it was helping Air Products formulate its takeover bid last fall, according to The Am Law Daily.

On this front, we don’t know what Air Products and Cravath have cooking, but we fully expect a response from a different highly regarded ethics professor very soon.

Full post as published by Law Blog - WSJ.com on February 17, 2010 (boomark / email).