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Conflicts can be great for business — when they’re someone else’s, of course. Cooley Godward picked up a new client when Latham & Watkins found itself representing both acquirer ArthroCare Corp. and its target, Opus Medical Inc., in what would become a $130 million deal. Latham & Watkins’ Northern California offices had worked with Sunnyvale-based ArthroCare, while its Orange County outpost counseled Opus, based in San Juan Capistrano. So Latham & Watkins tapped Palo Alto-based Cooley Godward to counsel Opus. Charles Ruck, an Orange County-based Latham partner, introduced Cooley and Opus. Ruck had worked previously with Cooley’s Suzanne Sawochka Hooper, who became the lead partner in the transaction for Cooley. No sooner did Cooley lawyers meet their new client than the deal kicked off. “We got to know them very quickly,” said Cooley associate Kathryn Walker Hall, who worked on the deal. ArthroCare Corp., a medical device company that develops minimally invasive tools for arthroscopic and other surgeries, will absorb Opus, a maker of soft-tissue orthopedic repair systems. ArthroCare will acquire all of the capital stock of Opus Medical for $90 million in cash and stock and $40 million of ArthroCare’s Nasdaq-traded stock payable in January 2006, according to Hall. In addition, former Opus shareholders may receive earn-out payments in 2006 if certain sales milestones are met in 2005. Hall said the earn-out agreements made the deal interesting. “Whenever you work with contingency payments, it raises a host of issues and makes it more complicated,” she said. The deal, which was announced earlier this week, is expected to close before the end of 2004. At that point, Opus will once again be a client of Latham’s — this time as part of ArthroCare. Along with Hooper and Hall, Cooley Godward’s team included partners William Morrow and Judith Hasko and associates Cara Franklin, Karla Galvez and Shane Albright. John Newell led Latham & Watkin’s team, which included Menlo Park-based associate Linda Lorenat.Adrienne Sanders EASY COME, EASY GO It looked good on paper. But nine months after Charles Schwab & Co. plunked down about $324 million for a securities research firm, the company had second thoughts about the purchase. Last week, the San Francisco-based brokerage firm announced that it was selling the business to UBS AG for $265 million in cash. The lawyers at Howard, Rice, Nemerovski, Canady, Falk & Rabkin who helped Schwab buy SoundView Technology Group Inc. were brought in to sell the business off. Partner Richard Canady, who led the team, declined to comment on the deal. Schwab purchased SoundView, an Old Greenwich, Conn.-based firm that provides institutional investors with research on technology, telecom and health care companies, in December. At the time Schwab said it expected the business, renamed Schwab SoundView Capital Markets, would provide an alternative to traditional Wall Street research and trading businesses. But in an Aug. 31 release, Schwab Chairman and CEO Charles Schwab said he had concluded there was “not enough synergy” between SoundView and Schwab’s core businesses to justify the company’s continued investment in the capital markets arena. “Our exit from capital markets reinforces our strategic focus on individual investors and independent financial advisers,” Schwab said. The Howard, Rice team included partners Stuart Lipton, Joseph Hershenson, Jennifer Blackman and J. Alex Moore and associates Edward Deibert, Tracey Luttrell, Maurine Murtagh, Celia van Gorder and Stephen Fronk. Schwab’s vice president and chief of staff Susan Stapleton and in-house counsel Mark Tellini also worked on the deal. Sullivan & Cromwell represented UBS on the transaction. The team included Palo Alto partner Matthew Hurd and New York partners Alexandra Korry, Frederick Wertheim, Ronald Creamer Jr. and Marc Trevino, as well as associates Scott Sonnenblick, Avner Ben-Gera, Nia Brown, Jennifer Palm, Sandra Cohen, David Passey and Joseph Ferraro. – Brenda Sandburg

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