Jenkens Scoop

[TJ!]

Yes--and this guy was pretty young (47, 50?) and had been with the firm for 24 years. He was also one of the most respected and knowledgeable people left running the place (although, admittedly, that is not a very competitive category...).

He is supposedly going to write a book about law firm mergers. I am sure that book will just be FLYING off the shelves... :sleep:

So when do the partner distributions go out? Perhaps we should start a new poll: "how many hours will it take for 20 partners to resign from Jenkens?" "50?"

[Freakin' NA]

So what's new... let see


For seven of the last eight years, I have served on the Firm’s Board of Directors, the last two as Chairman. Serving on the Board and as your Chairman has been a privilege ............................ Recently you again honored me by suggesting in our recent election that I should serve another term as your Chairman. While I am humbled and honored by your support, I have made the decision to step down.

[evenodds]

Originally posted by Freakin' NA
So what's new... let see


For seven of the last eight years, I have served on the Firm’s Board of Directors, the last two as Chairman. Serving on the Board and as your Chairman has been a privilege ............................ Recently you again honored me by suggesting in our recent election that I should serve another term as your Chairman. While I am humbled and honored by your support, I have made the decision to step down.

Will this stanch the bleeding?

"Per Firm policy, if you receive inquires from the press, please refer them to my office or David Marguilies ... Thank you."

You mean he may explain to someone what is happening- I doubt it!

Jenkens & Gilchrist chairman to step down


William Durbin, re-elected less than two months ago as chairman of Dallas law firm Jenkens & Gilchrist, said Wednesday that he plans to step down. Tom Cantrill, a Jenkens lawyer for more than 30 years, is expected to replace him.
Mr. Durbin said, "I've rethought things and felt it was best for me and for the firm for there to be a change."

Jenkens, one of the city's largest law firms, has been in a controversy over tax shelters. The Internal Revenue Service is seeking Jenkens' clients' names, and some clients are suing the law firm.

I think it was well less than 2 months.

Is supposedly set for this Tuesday. Question though as to if returning board members who supported Durbin will stay on as well?

From NY lawyer article:

News Watch
Leader of Embattled Firm Steps Down


New York Lawyer
January 21, 2004

By the Staff of Texas Lawyer

William Durbin, recently re-elected to a third one-year term as chairman and chief executive officer of Jenkens & Gilchrist, says he has resigned the job and will return to his practice full time.

Shareholder Thomas Cantrill, who was chairman for three-and-a-half years in the late 1980s, will become chairman of the 475-lawyer firm pending a vote of shareholders later this month.

At the time of the election in November 2003, Durbin says he had considered not running for the job, but was persuaded otherwise by some shareholders in the firm. But he has since reconsidered, saying, "I just think it was a good time for change." Durbin says nothing in particular changed his mind about the job —- other than a realization that someone else at the firm needed to implement some of the organizational changes he put into effect during his tenure.

During Durbin's tenure, the firm has been embroiled in a big dispute with the Internal Revenue Service. In August 2003, the government sued the Dallas-based firm to force it to disclose the names of clients who received tax advice from the firm's Chicago office. According to the suit, filed in federal court in Illinois, the IRS is investigating the firm's role in organizing and selling some "potentially abusive tax shelters," an allegation the firm denies.

Cantrill says some of the firm's shareholders were "discontent" with some of the organizational changes, and Durbin agrees that it would be better for someone else to oversee the firm. Durbin says the changes include a revamp of the structure of the firm and the structure of management.

Meanwhile, Cantrill says Roger Hayse, the firm's executive director, will leave Jenkens & Gilchristm and become a 30-hour-a-week consultant for the firm to give him time to work on a book on law firm mergers. Hayse did not, before presstime on Jan. 15, return two messages left at his office.

[billdustbin]

Originally posted by greedy
Is supposedly set for this Tuesday. Question though as to if returning board members who supported Durbin will stay on as well?

I, excuse me Bill, will still get part of his way by having some holdover board members remain. Also, the NY office's "extra" representation that I, excuse me Bill, negotiated is still in place.
There may even be one more of my, excuse me Bill's friends to fill the vacated seat by the coronation of Cantrill.

[Freakin' NA]

Any idea of what is going with the resignation of the Manager of the San Antonio office David Cibrian .... word is that SA was one of the most profitable
Odd since we know they were trying to make inroads into Latin America.
Waz UP?
Are the walls finally tumbling down on J&G?

Published Sunday, February 1, 2004

A Spotlight on Deutsche Bank's Tax Shelter Role

By LYNNLEY BROWNING
New York Times

THOMAS DENNEY, a property developer in upstate New York, got an unexpected telephone call one day at his office about a supposedly legal technique that would let him avoid paying millions of dollars in taxes. The call was from Mr. Denney's accountant at Pasquale & Bowers in Syracuse, which had prepared his tax returns for 15 years. The accountant suggested that Mr. Denney call BDO Seidman, a national accounting firm, which was working with a big Texas law firm, Jenkens & Gilchrist. Those two firms were collaborating on a tax shelter involving currency options that would be traded by Deutsche Bank A.G., the German financial powerhouse. Today, Mr. Denney, who lives in Cazenovia, N.Y., says he wishes he had never listened to the advice he received in that September 1999 call. Soon after he made the investments, which he says he believed were legitimate, the Internal Revenue Service decided that they were not, and he risks having to pay back taxes and interest on more than $2.3 million in income that he had sought to shelter. He and other taxpayers have filed suits against all the companies involved. His predicament sheds light on a little-noticed aspect of the multibillion-dollar world of tax shelters: the role of Deutsche Bank. Starting in the late 1990's, according to accusations in the lawsuits, the bank worked closely with accounting and law firms to carry out trading and lending for tax shelters set up and sold by such firms. Other banks, including HypoVereinsbank of Germany and First Union (now owned by Wachovia) of Charlotte, N.C., have been mentioned in other lawsuits or in a Senate finance subcommittee hearing last November as providing financing and trading for tax shelters. But no other bank, according to Mr. Denney's lawyer, David Deary of Dallas, comes up as often as Deutsche Bank in connection with questionable tax shelters. Deutsche Bank has not been accused by the government of any wrongdoing in relation to these tax shelters. The bank denies that it has violated any laws. And many tax experts support the bank's position, saying that because it did not actually set up and sell the shelters, as promoters do, it is unlikely to be punished by regulators. But Caglar Caglayan, assistant chief counsel at the California Franchise Tax Board, a state regulator that is trying to stop questionable shelters, said that if any of the lawsuits wind up in court, Deutsche Bank could find itself considered a promoter. That could make it subject to penalties or disciplinary actions by regulators. "A court will probably say, 'You knew what the transaction was, and yes, it was sold by an accounting firm, but your close proximity to the transaction makes you liable,' " she said. Because of the questions about shelters, some tax experts say the government should broaden its inquiry beyond front-line firms to include investment banks, such as Deutsche Bank. "They ought to target the counterparties as well," said Mark Gergen, a professor at the University of Texas at Austin School of Law. DEUTSCHE BANK has had its share of problems lately. Its chief executive, Josef Ackermann, and three telecommunications executives recently went on trial in Germany on charges that they approved improper payments to the chief of Mannesmann, a telecommunications company, during its takeover by Vodafone in 2000. Mr. Ackermann was then a Mannesmann board member. The bank is also under investigation for selling $446 million worth of Parmalat bonds last September, shortly before Parmalat, the Italian food company, was declared insolvent because of fraud. The bank owned as much as 5 percent of Parmalat last fall. Takeovers and bond sales are traditional lines of business for investment banks. But in the 1990's, a new area emerged for some of them, including Deutsche Bank: helping investors make the most of newfound dot-com wealth by working with accounting and law firms to handle highly aggressive tax-advantaged investments. In an amended class-action complaint, filed last August in the United States District Court for the Southern District of New York, Mr. Denney and five other people accuse Deutsche Bank and seven other parties of deliberately selling them sham shelters. BDO Seidman, Jenkens & Gilchrist and Pasquale & Bowers are among the co-defendants. BDO Seidman and Jenkens & Gilchrist are under investigation by the I.R.S. and the Justice Department over their role regarding shelters. Deutsche Bank declined to comment on Mr. Denney's complaint. Jerry Walsh, a BDO Seidman spokesman, said that the firm stood by the advice it gave. Jenkens & Gilchrist declined to comment. Pasquale & Bowers merged with another accounting firm, Dermody, Burke & Brown, in 2003. Virginia Limmiatis, director of marketing at Dermody, Burke & Brown, said, "We simply acted on behalf of our clients in terms of acting as a go-between." In the shelter Mr. Denney bought, known as a Cobra, for Currency Options Bring Reward Alternatives, Deutsche Bank bought and sold foreign currency options to generate gains and losses in equal amounts through partnerships and private corporations set up by Jenkens & Gilchrist. The options were held by one partnership, which was then dissolved and had its assets transferred to an S corporation, which has special tax advantages. In the transfer, only the losses were reported. The amounts of the trades canceled each other out, so there were no actual net gains or losses. Mr. Denney said in the lawsuit that he was told by BDO Seidman and Jenkens & Gilchrist that the losses could legitimately offset his total income for 1999. The cost of the shelter to Mr. Denney was $600,000 in fees to all parties, including at least $23,000 to Deutsche Bank. In an interview, Mr. Denney said he invested his money shortly after a November 1999 conversation with David Parse, a Chicago broker-dealer for the brokerage arm of Deutsche Bank. By late 1999, the I.R.S. was already questioning Cobras - something that Mr. Denney says no one told him. The agency effectively banned the Cobra shelter in September 2000 by declaring it a "listed transaction," meaning that investors must report their use of it to the I.R.S. and that its promoters must keep client lists. For listed transactions, the I.R.S. denies deductions claimed by investors and seeks out the shelters' promoters. Deutsche says it stopped selling the Cobra in early 2000. The I.R.S. loosely defines a promoter, or organizer, as any person who participates in the organization, management or sale of a questionable tax shelter, or any person connected to the organizer. Even if the courts decide that Deutsche Bank was not an organizer, the company could face other repercussions from its involvement in shelters if it had any doubts about their legitimacy, according to one tax expert. Daniel Shaviro, a law professor at New York University, said that it was not wise for a company to sell or carry out a shelter if it had any concern that it might not stand up if challenged in court. Losing such a case, he said, could damage a company's reputation. Mr. Deary, the lawyer for Mr. Denney, said that in exchange for carrying out the trading, Deutsche Bank received a share of the fees charged, as well as commissions from trades and loans. Some of the overall fees, Mr. Deary contends, were calculated as a percentage of the tax losses to be generated, which is one sign of a questionable shelter. Deutsche Bank executives denied that the bank ever received any fees as a percentage of losses generated. Mr. Deary initiated a similar suit last July, saying that Henry Camferdam, a Carmel, Ind., businessman, paid more than $3.5 million in late 1999 to various parties, including Deutsche Bank and Ernst & Young, for a Cobra shelter. Mr. Camferdam said Mr. Parse of Deutsche Bank had also advised him on which currencies to pick. Mr. Camferdam said late last month that he was told by Ernst & Young that the shelter would legally shield $70 million but that the I.R.S. refused his claim. A spokesman for Ernst & Young said that "Mr. Camferdam's lawsuit is without merit." Mr. Parse referred inquiries to his superior, who referred questions to the bank's spokeswoman, who declined to comment on shelter-related litigation. Another suit may be on the way. Mr. Deary said a client of his in Silicon Valley was telephoned in early 2001 by a Deutsche Bank employee trying to sell him a variation on a Cobra shelter, and that shortly thereafter, the client received a visit from two Atlanta-based bank employees pitching the shelter. The client, he said, bought the revised shelter in July 2001, nearly a year after the I.R.S. ruled that the original shelter was questionable. Deutsche Bank declined to comment. THE lawsuits are not the only source of accusations concerning Deutsche Bank and tax shelters. Dozens of internal company memorandums and other documents, made public by the Senate subcommittee in November, also suggest that Deutsche Bank worked closely with several law and accounting firms now under I.R.S. scrutiny, to handle perhaps a dozen or so types of questionable shelters in the mid- to late 1990's and 2000. According to e-mail messages released in the hearing, top executives at the bank, including John Ross, then the president of Deutsche Bank's American operations, approved of its work on at least some shelters. Consider Blips, the acronym for a shelter called the Bond Linked Investment Premium Strategy, which was designed by KPMG, Deutsche Bank's auditor, and by Presidio Advisory Services, an investment firm with offices in Denver and San Francisco. Both firms are under I.R.S. scrutiny over tax shelters. Deutsche Bank has said that it handled 56 Blips transactions over September and October 1999, making loans of $7.8 billion to companies. In an e-mail message in September 1999, John Larson, managing director and co-founder of Presidio Advisory Services, told KPMG executives that he "spent a day working out of DB's New York office" that month. That day, Mr. Larson wrote, enabled him "to troubleshoot very effectively" a backlog of loans that Deutsche Bank was set to process for the Blips. "This made me think that a temporary Presidio outpost at the bank might be very helpful," Mr. Larson concluded. Deutsche Bank declined to comment on the message or on whether such an outpost was ever established. There are other examples of Deutsche Bank appearing to work closely with Presidio and KPMG. An e-mail message in November 1999 from Robert Pfaff, a Presidio co-founder, to Jeffrey Eischeid, then a supervising partner at KPMG's tax shelter unit in Atlanta, and another KPMG employee, said that "both Deutsche Bank and KPMG have requested that we replace our existing Blips product with a new product in 2000." Mr. Eischeid, most recently KPMG's tax partner in charge of personal financial planning, was placed on administrative leave last month, one of three senior KPMG executives to be forced out amid mounting government criticism of KPMG's suspected role in questionable shelters. Another shelter involving the bank was an OPIS, for Offshore Portfolio Investment Strategy. Deutsche Bank made 62 OPIS loans totaling $3 billion from June 1997 to March 1999, earning fees of $35 million. Internal Deutsche Bank presentation materials from 1999 outline more than a dozen types of shelters, including Blips and OPIS. In a statement last month, the bank said it "did not design, market, sell, or promote either the OPIS or Blips transactions, but had a limited role providing ordinary financial services as a lender and counterparty." The statement called the actions "appropriate and in accordance with all applicable legal and internal standards." Deutsche Bank said its outside law firm, Shearman & Sterling, had approved of its participation in the deals. A spokesman for the law firm said it stood by its advice to the bank.

http://www.iht.com/articles/127871.html

[Freakin' NA]

San Antonio attorney will switch firms, but not goals
Tricia Lynn Silva
David J. Cibrian has a plan for the local office of Dallas-based law firm Strasburger & Price LLP.

"In both San Antonio and throughout Texas, Strasburger & Price will be as highly regarded in the boardroom as it has been in the courtroom," he says. "(The firm's lawyers) have tremendous respect Texas-wide as litigators. So the strategic plan -- over the next five years -- is to focus on making it a premier corporate law firm as well."

Cibrian certainly knows a thing or two about growing a law practice here. It was back in May 1993 that he came to San Antonio, joining the firm that ultimately became the local office of Dallas-based Jenkens & Gilchrist. He was the managing partner of the new office, the fourth lawyer in the firm -- which currently has 20 attorneys, says Cibrian.

And now -- just a few months shy of his 11th anniversary with Jenkens & Gilchrist -- Cibrian has made the move to Strasburger & Price -- which first came onto the local legal scene in 1998.

Cibrian will be, as he describes it, lucky number 13 for the office's growing legal practice. Cibrian joins Strasburger & Price as an equity partner -- a title similar to that which he held at Jenkens & Gilchrist, where he was a managing shareholder.

Both titles, he explains, signify an ownership position. Of course with ownership, the responsibility is greater, too.

"At that level of a firm, you are a spokesperson, a technician, a marketer and a lawyer -- all at once," he says.

As part of the move to Strasburger & Price, Cibrian will be selling his ownership stake in Jenkens & Gilchrist back to the firm.

Cibrian's first priority with Strasburger: to grow the corporate transactional side of the business.

He will hit the ground running on this task -- with plans to aggressively expand the legal firepower of this division of the firm by targeting attorneys who have already made a name for themselves here.

"There are some great transactional lawyers in San Antonio, many of which would be better served working off of the Strasburger national and international platform," says Cibrian. "I have practiced opposite a lot of good lawyers here. I'd like to have a chance to practice with them as my partners."

International interests
For Cibrian, growing the corporate division of Strasburger & Price means growing the firm's reputation within the area of international law -- including its work south of the border.

That has been one of Cibrian's core practice areas since he first became an attorney in the early 1990s.

He credits his interest in this field -- especially his focus on Latin America -- to his upbringing. He was born in Miami in 1963 -- two years after his parents immigrated to the city from Cuba.

Growing up with the language and culture of Latin America, Cibrian knew early on that he wanted to be a lawyer -- even as he studied accounting at Loyola Marymount University in Los Angeles, where he graduated with a bachelor of science degree in accounting in 1985.

Cibrian, however, was East Coast bound when it came to law school -- setting his sights on Georgetown University Law Center. The school, he notes, is renowned for its international studies program. He graduated cum laude in 1990.

While at Jenkens & Gilchrist, Cibrian participated in a wide range of international transactions. The move to Strasburger, he says, will allow him to take that expertise to the next level.

"I'll tell you about an experience I had recently," Cibrian says. "I met with the international practice group of Strasburger. You had 30 people in that room; that was 29 more than I had worked with at Jenkens. Strasburger has shown a level of support, a commitment to cross-border work."

The defining difference between the two firms is office presence. While Jenkens & Gilchrist has formed alliances with firms in Mexico City, Monterrey and San Luis Potosi, Strasburger & Price has had a Mexico City office for more than 14 years.

"It gives us a unique ability," says Charles J. Muller, partner in charge of Strasburger's San Antonio office, adding that the Mexico office has lawyers licensed in both the United States and Mexico. The ability to build a team in the know on both sides, adds Muller, "is the advantage we have over other groups that are trying to practice through affiliations."

Scott Rose, who succeeded Cibrian as the office managing shareholder at Jenkens & Gilchrist, describes Muller's assertion as "debatable." "(Cibrian) is a fine lawyer, and we will miss him," Rose adds. "But we have international work that will continue after his departure."

Competitive sparks aside, it does appear Cibrian's legal prowess has earned him a loyal following. "The relationships (Cibrian) has south of the border are outstanding," says Charles E. Amato, chairman of locally based financial-services firm SWBC.

And he's respected, says Amato, noting Cibrian's work to recapture the losses suffered by numerous investors -- many of them from Mexico -- as a result of the fiasco of the now-defunct investment firm InverWorld.

Cibrian will soon be traveling to Monterrey with one of SWBC's wealth management advisers -- providing the important business connections that could bring the investment firm some new clients.

Adds Amato: "We couldn't be successful (in Monterrey) without him."

Good mix
Over the next year or two, Muller expects to grow the corporate side of Strasburger & Price by as many as 10 lawyers. For Cibrian, however, the number of lawyers is less important than the network he can create among them at his new firm.

"It's less about the number of lawyers than it is the lawyer mix," he explains. "A firm that is too large will start stepping on its partners' feet.

The trick, says Cibrian, is to be able to cross-sell the partners of a firm. After all, they are the ones who secure and maintain the clients.

Cibrian recalls a recent incident in which he informed one of his clients of his move to Strasburger & Price.

"When I announced (the move) he said, 'We've been doing business with you, not the law firm. We don't care where you are.' My business is a relationship business," Cibrian concludes. "Clients continue to do business with lawyers first, and law firms second."

That is an adage that noted consultant Jean M. Rowan can also attest to. She is the owner of locally based The BottomLine, a firm that coaches and trains professionals in personal marketing and presentation skills. Cibrian has been a Rowan client for several years.

"A marketing plan for a firm is, in reality, a marketing plan for an individual," she says. "People buy people."

Muller agrees.

"We've been looking for the right lawyer to grow the international business in our San Antonio office," he says. "We talked with many lawyers, many legal groups. (Cibrian) is the one person that fits the bill.

"He's very ambitious, very knowledgeable," Muller continues. "We are confident that we are going to build a very strong (corporate) and international practice with (him)."

Adds Cibrian: "The local office of Strasburger has a lot of longtime San Antonio lawyers. They are going to be great partners for me to have."


...My question is who got paid back the best , the departing GP or Jenkens

A SA shareholder is leaving in next few weeks. Dallas to have some shareholder(s) to announce departures shortly as well. Other cities may have similar issue.

Also there is a rumor of follow up story in American Lawyer being possible, this time not tax slanted, but rather firm management's response (or as put by one who remains- the non response) to tax and significant size reduction in firm. Several support staff bailouts have also occured.

[Freakin' NA]

The SA S/H that is set to leave is a IP specialist. I guess he's been burned by the firm also and just want out - the SA office seems to losing all of their aother areas of law except for litigation and the Headhunters are poaching the attorneys.

Odd's are another firm will make a bid for the SA office or the Firms shuts down its SA ops

Judge Says Tax Shelter Suit Has to Go to Arbitration
By LYNNLEY BROWNING

Published: February 26, 2004


federal judge has dealt a setback to a lawsuit brought by an Indiana millionaire who accused the accounting firm Ernst & Young and others of selling him a tax shelter that has been barred.

Judge Barbara Jones of Federal District Court in Manhattan ruled on Feb. 13 that the lawsuit, brought by Henry Camferdam, would not be allowed to proceed to trial. Instead, she said the dispute must be resolved through arbitration.



The ruling appears to be a setback for Mr. Camferdam of Carmel, Ind., and three colleagues who are also plaintiffs in the suit.

The suit seeks $40 million in compensatory damages and $1 billion in punitive damages from Ernst & Young; from two law firms, Jenkens & Gilchrist and the former Brown & Wood, now part of Sidley Austin Brown & Wood; and from Deutsche Bank.

David Weisbach, a law professor at the University of Chicago, said yesterday that the judge's ruling could hamper efforts by lawyers and officials to deter promoters of questionable tax shelters.

"It's got to be a setback because all the remedies available in court are not available in arbitration," Professor Weisbach said, adding that in arbitration, "the tax shelter promoters will be less punished and most of these tax shelters may go unnoticed."

Unlike jury trials, arbitration produces few public documents and is often secretive. Congressional officials have relied on public documents in their attempt to crack down on abusive tax shelters, which themselves are often shrouded in secrecy. Arbitration agreements are usually a part of most tax shelter contracts, several lawyers said yesterday.

David Deary, a lawyer based in Dallas who represents Mr. Camferdam, said yesterday that he would appeal Judge Jones's ruling.

Mr. Camferdam's suit, filed by Mr. Deary in amended form last July after he inherited the case from another lawyer, accuses the defendants of working together to sell him a tax shelter known as Cobra, for "currency options bring alternative rewards,'' in November 1999. The shelter, the lawsuit says, was designed to shield from taxes $70 million in profit that Mr. Camferdam had made from selling his computer company.

By late 1999, the Internal Revenue Service was questioning the legitimacy of Cobra transactions and effectively barred them in September 2000. The I.R.S. is auditing Mr. Camferdam's return for 1999 and contends that he owes the agency millions of dollars in back taxes, plus interest and penalties.

Mr. Camferdam says he paid more than $3.5 million for the tax shelter, including more than $1 million to Ernst & Young and more than $2 million to Jenkens & Gilchrist. He said he thought the tax shelter was legal because Ernst & Young and the two law firms told him it was.

In a motion, Ernst & Young argued that Mr. Camferdam had agreed when he bought his tax shelter to resolve any disputes through arbitration.

Charles Perkins, a spokesman for Ernst & Young, said yesterday that "we are pleased that the court has supported our position and that this issue should be resolved through arbitration, as called for in Mr. Camferdam's agreement."

But Mr. Deary said that Ernst & Young had in fact not given Mr. Camferdam an arbitration agreement when he bought his tax shelter. "We do not believe the plaintiffs ever agreed with Ernst & Young to arbitrate," he said.

This may only deal with the accounting folks though.