X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
SACRAMENTO — State Treasurer Phil Angelides on Thursday named Orrick, Herrington & Sutcliffe the lead counsel in the $15 billion plan to bail the state out of its financial mess. The announcement came as no surprise. Orrick handled the previous version of the bailout — an $11 billion bond plan approved last year by Gov. Gray Davis and the Legislature. “It continues to keep us in the heart of the state financing programs, as we have done for decades,” said Orrick partner Robert Feyer. “It lets us put our expertise to work for the state in its most difficult time.” The $15 billion in bonds is the centerpiece of Gov. Arnold Schwarzenegger’s fiscal recovery plan and was on Tuesday’s ballot as Proposition 57. Angelides opposed the plan because he believes taking on more debt is not good for the state. Although some financial experts worry about the bond market’s reaction to the debt — it’s the largest issuance in state history — Feyer sees better sale value this go-round. “The fact that this bond has the clear legal benefit of voter approval makes it clearly a strong bond, and the key to its acceptance is the fact that it has a dedicated sales tax pledge,” said Feyer, who is lead counsel on the new deal. Besides Orrick, other members of the bond team are Lehman Brothers as lead banker, as well as the law firms of Quateman & Zidell, Sidley Austin Brown & Wood, Lofton & Jennings and Pillsbury Winthrop. Feyer said it hasn’t been decided whether Orrick will be paid for its work by the hour or by percentage. In the previous version, the firm was paid by the hour. Orrick has the most active bond practice in the nation and remains the de facto choice for general obligation bonds in California. The firm also has a lobbying practice in Sacramento and has been an active campaign contributor. It opposed the recall of Gov. Davis and has given hundreds of thousands to Angelides over the years, according to the secretary of state. Orrick did not donate to the Yes on Prop 57 campaign. The work on state bonds is not considered lucrative, though it does help the firm market itself to other government entities throughout California and the nation. The prior $11 billion bond issue had been the subject of litigation, and the new plan is already being disputed in court. Thirty-eight cities filed a suit in Alameda County on Thursday against the Board of Equalization, attacking the state’s redirecting sales tax revenue to finance the bond. Steven Mayer of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, who represents the cities, said his clients aren’t opposing the bond itself, but don’t trust the state to make good on financial tinkering that is supposed to protect cities’ tax revenue. Reporter Adri�enne Sanders contributed to this report.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.