31 March 2010
New York, 31 March 2010 – Mayer Brown, a leading global law firm, secured an important victory in the Second Circuit that reinstated a sale order for Carl Icahn in his battle for control of WestPoint Stevens.
Mr. Icahn won a bidding war for the distressed textile company in bankruptcy proceedings, against rival Wilber Ross, with a offer of more than $700 million. The bankruptcy court gave him both control of the business and the most favorable distributions during the conversion of the different classes of stock. However, the District Court reviewed the sale order and reversed the bankruptcy court’s decision, saying that the distributions of the securities should have favored Mr. Ross. In a decision that would have stripped Mr. Icahn of control, the District Court rejected a proposition that Mr. Icahn’s bid had included a control premium.
Philip Lacovara, senior counsel in Mayer Brown’s New York office, argued before the Second Circuit for the reinstatement of the sale order. The Court of Appeals agreed entirely, holding that the District Court had indeed lacked jurisdiction to strip Mr. Icahn of control, and that the case presented an “unmistakable record of a sale for control of the ... business.”
The Mayer Brown team also included bankruptcy partners Brian Trust and Sean Scott.