Deals // Verdicts // Settlements
January 31, 2008
>Big Deals
Jenner & Block represented the Tribune Company in its $8.2 billion going-private transaction by merging with an acquisition subsidiary of the Tribune Employee Stock Ownership Plan. Sam Zell, who financed the transaction, will assume the roles of chairman of the board and chief executive officer.
Under the terms of the merger agreement, all of the company’s publicly held shares of common stock, except for those owned by the Tribune ESOP and shares held by shareholders who validly exercised appraisal rights, will be cashed out at $34 per share.
Last April, the Tribune announced its intention to become a private company, owned 100 percent by the Tribune ESOP. EGI-TRB, an entity associated with Zell, made an initial investment of $250 million in the Tribune. As part of the going-private transaction, EGI-TRB increased its investment to $315 million by purchasing a note and a warrant to acquire up to 40 percent of the company’s common equity on a fully diluted basis.
“The deal has attracted a tremendous amount of media attention,” said Joseph Gromacki, the Jenner partner who led the team.
“Two things drive that: It’s a media company deal, and the media covers itself pretty well; and the Tribune is a landmark company facing unique challenges on the business side.
“The overall structure of the deal — how company looks after closing — is very unusual,” he said. “The ESOP is acquiring 100 percent of the stock of the company and Sam Zell has a warrant to acquire 40 percent of company. The other thing is that board and management changes were announced at the same time. Sam was named chairman and CEO, which shows that he is taking a strong leadership role in the company.
“Sam was a litigation client of our firm, but I’ve never worked with him before. I was cold-called by Joe Paolucci, the chief legal officer of Equity Group Investments LLC, Zell’s private investment firm. I interviewed and was hired on the spot, then it sort of went from there. I got very busy very quickly. It was a wonderful opportunity to work as a team with Joe Paolucci. It was my first deal for Sam and I’m happy with how it went.”
In addition to Gromacki, who is the chair of Jenner’s corporate practice, the team included partners Thomas A. Monson, Brian R. Boch, Michael T. Wolf, Farhad K. Patel, Elizabeth A. Davidson, Adam Petravicius, Edward G. Quinlisk, and William L. Tolbert, and associates Blake J. Fix, Melissa C. Fogerty, Peter H. Rosenbaum, Cori F. Brown, Mercedes M. Davis, Marc E. Harrison, and Jeffrey D. Larson.
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Attorneys from the Chicago office of Latham & Watkins represented members of the Pritzker family in the $4.5 billion sale of a private company consisting of more than 125 manufacturing and service businesses to Berkshire Hathaway, Warren Buffett’s investment company.
Berkshire Hathaway announced that it will purchase 60 percent of Marmon Holdings, Inc., and has plans to acquire the remaining 40 percent over the next five or six years. Marmon Holdings is owned by trusts for the benefit of the Pritzker family. The deal is expected to close in the first quarter of this year.
The Latham team was led by corporate partners Michael A. Pucker and Thomas Edwin Keim Jr., and tax partner Stephen S. Bowen. Other partners who advised on the deal are Diana Slyfield Doyle, tax, Robin L. Struve, employment, and Cary R. Perlman, environmental matters. Corporate associates Zachary A. Judd and Ashran Jen also worked on the deal.
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Schiff Hardin represented Consolidated Communications Holdings, Inc. in its acquisition of North Pittsburgh Systems, Inc., for a cash and stock purchase price of about $360 million. The transaction also involved the negotiation of a $950 million senior secured credit facility.
The acquisition adds a third territory, the region of Pennsylvania north of Pittsburgh, to Consolidated’s existing telecommunications operations in Illinois and Texas.
The Schiff Hardin team was led by Peter L. Rossiter and James E. Brown with key support from attorneys David S. McCarthy, Alexander B. Young, Ismail Alsheik, Jane E. Montgomery, Patricia S. Ullman, Owen E. MacBride, William M. Hannay, Henry W. Sledz Jr., Lauralyn G. Bengel, Mark E. Ashton, and Ali Khan, as well as paralegals Paul Bernacki, Helen Kasic, and Donald Salazar.
>Big Verdicts and Settlements
A Cook County jury awarded $22 million to the family of a 34 year-old woman who died during childbirth because the doctor and nurse failed to properly treat her acute high blood pressure.
On March 14, 2003, Rachelle Bentivenga, nine months pregnant with a delivery date of March 28, went to St. Francis Hospital in Evanston, where she complained of a severe headache. She was admitted and taken to labor and delivery, where she was examined by an experienced labor and delivery nurse and a second-year resident.
Both of them determined she had preeclampsia, severe high blood pressure. Lab tests showed she suffered from HELLP (hemolytic anemia, elevated liver enzymes, low platelet count) syndrome.
The hospital policy for pregnant women with severely high blood pressure or hypertension required an anti-hypertensive medication, labetalol, to be given every 10 minutes in increasing doses until the blood pressure came down into a safe range.
Contrary to the policy, Bentivenga was only given three doses of 10 milligrams of labetalol, instead of doses of 10, 20, 40 and 80 milligrams 10 minutes apart. Labor was induced, but before delivery her blood pressure skyrocketed and she became unresponsive.
Her son was successfully delivered by emergency cesarean section. A CT scan revealed that the mother had a massive brain hemorrhage and she was placed on ventilator support. She died four days later when the ventilator was disconnected.
The family was represented by David R. Barry, Jr. and Susan J. Schwartz of Corboy & Demetrio. The defendants were represented by Kevin T. Martin and Aiju C. Thevatheril of Swanson, Martin & Bell.
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A Wilmington father falsely arrested in 2004 for the sexual assault and murder of his 3-year-old daughter was awarded, along with his wife, $15.5 million by a federal court jury.
Kevin Fox was arrested for the rape and murder of his daughter, Riley, and spent eight months in the Will County Jail before tests showed that DNA from Riley’s rape kit did not match his genetic profile. DNA tests performed later on duct tape that covered the girl’s mouth also excluded Fox.
Fox testified that Will County sheriff’s detectives coerced him into confessing to the crime during a 14-hour interrogation. His confession — that he accidentally hurt his daughter, thought she was dead, and tried to make it look like an abduction, rape, and murder — was in line with the detectives’ theory of the case, which they told Fox’s wife, Melissa, before interrogating Fox. The Foxes’ attorney also introduced evidence that a Will County deputy sheriff told the FBI to stop DNA testing a week after Fox’s arrest.
The jury awarded $9.3 million, including $3.7 million in punitive damages, to Fox, and $6.2 million to Melissa Fox for loss of consortium, including $2.5 million in punitive damages.
The plaintiffs were represented by Kathleen T. Zellner of Kathleen T. Zellner & Associates. The defendants were represented by Robert H. Smith, Mark J. Smith, and Joan M. Kubalanza of Lowis & Gellen.
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The parents of a child injured during delivery agreed to an $11.5 million settlement in November.
Joshua Radis was born with brain damage and cerebral palsy in 2003. The plaintiffs alleged that fetal monitor tracings indicated that he was not tolerating labor because his heart rate wasn’t recovering during contractions.
The physicians tried to expedite delivery with a vacuum extractor, but stopped after eight minutes because the physician believed the baby would be delivered with one or two more pushes, but he wasn’t delivered until after 15 pushes.
The family was represented by David R. Barry Jr. of Corboy & Demetrio. Northwestern Memorial Hospital, which paid $9.5 million, was represented by Robert L. Nora and Andrea H. Kott of McKay, Nora, Tanzillo, Daddino & Kott. The physician and her corporation paid $2 million; they were represented by Rudolf G. Schade, Jr. of Cassiday Schade.
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A woman who was paralyzed from the waist down after her car was crushed in an accident last February settled her case for $5.5 million.
Catherine Rodriguez was stopped at a red light when her car was rear-ended by a truck that was owned by Royal Paper Company and driven by Benjamin Brown. The truck ended up on top of Rodriguez’s car.
Rodriguez and her family were represented by David L. Buffen of Rittenberg, Buffen & Gulbrandsen. The defendants were represented by Larry A. Schechtman of SmithAmundsen.
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A Cook County jury awarded $5.5 million to the estate of a woman who died in 1999 of septic shock after physicians discharged her from two hospitals, saying she had the flu.
Maria Saenz, 31, went to a walk-in clinic in Buffalo Grove, where she was treated for dehydration and low blood pressure. The doctor said that Saenz responded positively to fluid resuscitation and discharged her with a diagnosis of the stomach flu. She later went to an emergency room in Elgin, where she was again discharged with a diagnosis of the stomach flu. The next day, she returned to the Elgin hospital and was in septic shock and died of disseminated intravascular coagulation and organ failure.
Saenz was represented by Robert B. Phillips IV of Robert B. Phillips & Associates and Nathan J. Mirocha of Wolin, Kelter & Rosen. The Buffalo Grove doctor and hospital were represented by Stanley J. Davidson and Shawn P. Clifford of Hinshaw & Culbertson. The Elgin doctor was represented by Rodney E. VanAusdal and LaDonna L. Boeckman of Cray Huber Horstman Heil & VanAusdal.
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The family of a dentist who died of a pulmonary embolism during a hospital stay received a $4 million settlement in November.
In November 2002, Anton Urban, 55, suffered a pelvic and wrist fracture following an automobile accident.
He was admitted to Lutheran General Hospital and identified by his doctors as a patient at high risk for the development of deep vein thrombosis (DVT), which can lead to pulmonary embolism.
Although medication was ordered by his doctors to reduce the risk of DVT, the medication was withheld over a four-day period. During this time, the plaintiff alleged that Urban developed blood clots in the vessels of his lower extremities, and no diagnostic study was performed to evaluate if clots formed during this gap in treatment. The clots eventually broke free, traveled into his lungs, and caused Urban’s death. Urban was survived by his wife and four adult children.
The plaintiff was represented by Matthew L. Williams of Salvi Shostok & Pritchard. The hospital, which paid $2 million, was represented by Donna Kaner Socol and Bernice Jacobs of Hughes Socol Piers Resnick & Dym. Dr. Matthew Jiminez, who paid $1 million, was represented by Timothy A. Weaver of Pretzel & Stouffer. Dr. Daniel Resnick, who also paid $1 million, was represented by Michael J. Morrissey of Cassiday Schade.
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A woman who was injured during laparoscopic surgery to remove an ovarian cyst was awarded $1.8 million by a federal judge following a court trial.
Rosemary Bombela-Tobias underwent laparoscopic surgery for removal of a left ovarian cyst in 2002 at Alivia Medical Center. During the procedure her iliac artery was lacerated and she nearly bled to death.
She required a complex abdominal closure, several subsequent surgeries, and a two-year recovery period during which she was unable to work. For much of her recovery period she had an open abdominal wound.
Injury to the common iliac artery is not a known complication of a laparoscopic surgery to remove an ovarian cyst. Perforation of the left common artery was caused by the improper location of surgical equipment by the treating surgeons.
Bombela-Tobias was represented by Barry Chafetz of Corboy & Demetrio. The hospital, which is a federally funded community health center, and the physicians were represented by Assistant U.S. Attorneys Patrick W. Johnson and Eileen M. Marutzky.
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