Legal News

No Harm, No Foul: Cravath Allowed to Continue Air Products Work

By Ashby Jones

When last we left the kerfuffle over whether Cravath, Swaine & Moore should be disqualified from handling the M&A work for Air Products in its bid to swallow up Airgas, the case had been kicked down I-95, from federal court in Philadelphia to Delaware Chancery Court, in Wilmington.

On Friday, we got a ruling out of the First State. Chancellor William Chandler declined to disqualify Cravath, holding that he had seen no evidence Cravath would use any information from its time representing Airgas in the buyout case. Click here for the story on the ruling, from Reuters, here for Chancellor Chandler’s opinion.

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. Last month, Air Products sued Airgas in Delaware Chancery 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 in other matters, it was conflicted and therefore should be barred from representing Air Products.

Ultimately, the latter suit wound up alongside the former with Chancellor William Chandler in Delaware.

“Airgas here has not demonstrated . . . persuasively, let alone clearly and convincingly, that it would be disadvantaged by the presence of its former counsel as advocate for its opponent, Air Products,” Chandler said in his ruling.

Airgas told Reuters that it was “disappointed” in the ruling, and that it continues to feel Air Product’s offer “grossly undervalues” its assets. “We are prepared to take all necessary steps to preserve and protect stockholder value,” the Radnor, Pennsylvania-based company said in a statement.

Cravath declined to comment.

Click here, here, here and here, for LB background on the dustup.

Full post as published by Law Blog - WSJ.com on March 05, 2010 (boomark / email).