As the seven-hour emergency board meeting neared its end on the second Sunday night of the new century, the directors of Time Warner Inc. still had a large ministerial matter to approve. What would they pay their banking and legal advisers for helping complete the largest merger in history — the $156 billion deal with Internet giant America Online, Inc.?

The bankers were easy: Morgan Stanley Dean Witter & Co. would take its customary cut if the deal went through. If it fell apart, the bankers would get nothing. For the lawyers, new Time Warner general counsel Christopher Bogart spoke up with a surprise: Rather than pay an hourly rate plus a hefty premium if the deal closed, Bogart announced that his lawyers at Cravath, Swaine & Moore had agreed to a contingency fee. If the AOL deal closed, the law firm would receive one of the biggest transaction fees ever — a staggering $35 million. But if the deal falls apart, say several sources familiar with the deal, Cravath’s lawyers, like Morgan Stanley’s bankers, could potentially go home empty-handed.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

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