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Lawyers in the San Francisco office of Kirkpatrick & Lockhart counseled the employee stock ownership plan of U.S. Investigations Services Inc., a provider of background checks for employees of the federal government, through a recapitalization of $545 million in employee benefits and stock ownership plans. “This ESOP [transaction] is a way of structuring ownership of the company so that employees have a bigger stake,” said Laurence Goldberg, the lead partner on the deal for Kirkpatrick. “The transaction allows the employees to realize the value they helped create in the business and to allow them to personally diversify their retirement assets and, provides USIS the financial support to continue to grow its capabilities,” he said. Goldberg added that the deal also gives USIS the ability to increase its services in response to an influx of business stemming from new homeland security initiatives. USIS began running background checks for the federal government in 1996, when some of the duties of the Office of Personnel Management were privatized. In addition to background checks, USIS also provides drug and alcohol testing programs and security services for the workplace. Kirkpatrick corporate partner Mark Davis said he thinks the firm will see more ESOP transactions this year, as majority stockholders of public companies decide to sell their majority stake in the company to employees instead of launching an IPO. “ESOP’s provided an alternative to the deal IPO market,” he said. Attorneys in the New York office of Davis Polk & Wardwell represented the lead underwriter of the recapitalization, Welsh, Carson, Anderson & Stowe. Lawyers in the Washington, D.C., office of Arnold & Porter represented USIS, the company in the deal. In addition to Goldberg and Davis, associates Katherine Aizawa and Jonathan Blum worked on the deal in Kirkpatrick’s San Francisco office. Albert Royas v. Mercedes-Benz Attorneys in the San Francisco office of Carroll, Burdick & Mcdonough successfully defended DaimlerChrysler AG and Mercedes-Benz USA in a product liability and personal injury lawsuit. In Albert Royas v. Mercedes-Benz USA, BC223738, the plaintiff sued both companies in Los Angeles Superior Court, contending they made cars with dangerous defects in their heating systems. The plaintiff argued that the material used by the companies in the construction of the heater core, a device that regulates the flow of heat from the engine into the car, could fail and cause injury. In addition, the plaintiff alleged the defendants were guilty of strict liability, failure to warn, negligence and fraudulent concealment. Carroll, Burdick partner Jeffrey Lyddan served as lead defense attorney. He argued that the failure of the automobiles’ heater core was due to poor maintenance and abuse of the product. Originally, the plaintiff made a $3.8 million dollar, non-negotiable demand at the start of trial. The demand was raised during the trial to $10 million. After a day-and-a-half of deliberation, the jury found for the defense. In addition to Lyddan, Los Angeles-based partner Melissa Force worked on the case. Solo practitioner Herbert Hafif represented the plaintiff.

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