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Mention asbestos litigation risk two weeks before the signing date on a $3.65 billion acquisition agreement, and some deal lawyers might get a little rattled. Add in a seller who was unwilling to retain any liability for that potential risk, and many lawyers would start to sweat. Not David Sorkin. The Simpson Thacher & Bartlett private equity lawyer has earned a reputation for a levelheaded and analytical approach to high-stakes dilemmas. And high-stakes this was. Sorkin was representing a consortium of private equity buyers, including The Blackstone Group Inc.; Hellman & Friedman; Kohlberg Kravis Roberts & Co.; and Texas Pacific Group, in a heated five-month pursuit of power company Texas Genco Holdings Inc., a subsidiary of CenterPoint Energy Inc. Ten different parties had submitted initial bids for Texas Genco after CenterPoint put it on the block in February 2004. By July, Sorkin’s consortium, GC Power Acquisition LLC, was one of two remaining bidders. The team was finalizing its proposed purchase agreement when the company revealed a history of asbestos-related settlements. Sorkin’s clients were concerned. The settlements were small (the principals declined to disclose their exact size), but the buyers didn’t know whether they represented the tip of an iceberg, says David Foley, a senior managing director at Blackstone. Sorkin maintained his cool, advocating a deeper investigation into the potential liability instead of treating it as a deal-breaker, Foley recalls. “David was always working to solve problems, not create them,” says CenterPoint counsel J. David Kirkland Jr., of Baker Botts. On July 21, GC Power signed a purchase agreement for Texas Genco. The transaction was the largest leveraged buyout of a power company to date. Read the full dealmaker profile and the complete corporate scorecard by subscribing to The American Lawyer.

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