Alan M. Utay had reason to have a few butterflies in his stomach the day he started work as general counsel at Alliance Data Systems Corp. in Plano. Sept. 17, 2001, wasn’t just his first day on the job at the credit-card processing and marketing company; it also was the day the U.S. stock markets re-opened following the Sept. 11, 2001, terrorist attacks on America.

During his first week or so at Alliance Data during that unsettling time, Utay says he dealt with a crisis at a work location after particles of a mysterious white powder wafted out of an envelope. He also fielded calls from the U.S. Secret Service about credit cards issued to individuals with the same names as suspected terrorists.

The white powder was harmless, and the credit-card customers of Alliance Data clients were not terrorists. But Utay says the events of his first week as GC taught him that little is predictable about his job responsibilities as executive vice president, general counsel and chief administrative officer for Alliance Data.

“I never know what a particular day is going to bring,” he says.

Utay ended up at Alliance Data in a typical way for GCs. Alliance Data was a major client for Utay at Akin Gump Strauss Hauer & Feld in Dallas, the firm he joined after graduating from the University of Texas School of Law in 1990. A corporate-securities partner, Utay worked on Alliance Data’s initial public offering in June 2001, and three months later, he accepted a position as general counsel at Alliance Data.

Utay says Alliance Data, founded in 1996, has three main lines of business: LoyaltyOne, based in Toronto, which operates the Air Miles Rewards Program, a coalition loyalty-benefits program in which 70 percent of Canadian households participate, earning points at a range of businesses to redeem for products; a private-label credit-card business based in Columbus, Ohio; and Irving-based Epsilon, which collects customer data for clients to help them market to a targeted audience.

Clients include Chico’s FAS Inc. of Fort Myers, Fla.; David’s Bridal Inc. of Conshohocken, Pa.; La Quinta Inns & Suites of Dallas; and Kraft Foods Inc. of Northfield, Ill., according to Alliance Data press releases. Alliance Data spokeswoman Shelley Whiddon says clients include AnnTaylor Stores Corp. of New York, Hilton Worldwide of McLean, Va., and Toronto-based Bank of Montreal.

Utay says his job responsibilities go beyond the legal function. As GC of the 16-lawyer department, Utay oversees acquisitions, divestitures and corporate matters, handles banking regulatory issues related to the credit-card business, and keeps up with privacy issues related to all lines of business. He also is the chief administrative officer for Alliance Data and, with that, oversees human resources, marketing and communications, administrative services, facilities and audit-compliance.

Calm and Collected

At present, Utay says Alliance Data isn’t facing any bet-the-company litigation, although there always is a docket of small suits involving credit-card accounts, such as disputed debts.

Two years ago, however, Alliance Data was involved in some major litigation as a result of a failed effort to take the company private.

In May 2007, Alliance Data announced that it had negotiated a definitive agreement to be acquired by Blackstone Capital Partners V LP, an affiliate of private equity company The Blackstone Group, for about $7.8 billion, including the assumption of some debt. However, in 2008, Alliance Data filed Alliance Data Systems Corp. v. Blackstone Capital Partners V L.P., et al., a breach of contract suit seeking a $170 million break-up fee because the deal did not close. In January 2009, Vice Chancellor Leo Strine Jr. of the Delaware Chancery Court dismissed Alliance Data’s suit.

“They won the case,” Utay says. “We all just moved on.”

John Finley, chief legal officer for the Blackstone Group, declines comment.

Joe Motes, a partner in Akin Gump in Dallas who is outside counsel for Alliance Data, says Utay handled the difficulties with the Blackstone deal in a calm manner. Motes says that about nine months after they started working on the deal, Alliance Data got word from Blackstone that it didn’t think the deal would close because of banking regulatory issues. Motes says that while many general counsel would have launched into panic mode with that news, Motes says Utay handled it well by asking him to pull together a team of lawyers from Akin Gump in various practice areas to discuss options to present to the Alliance Data board of directors.

“It was a classic example of a gigantic event happening and [Utay] taking it completely in stride,” says Motes, who met Utay when both were Akin Gump associates.

“He’s an incredibly thoughtful person. He can think through issues and come up with a sensible answer. He’s just got that steady calm that you like to work with,” adds Motes, who says he does mergers-and-acquisitions work and securities offerings for Alliance Data and has arranged for other Akin Gump lawyers to do employment work, litigation and lobbying for the company.

Leigh Ann Epperson, vice president and assistant general counsel at Alliance Data, says Utay is a hands-off boss.

“He trusts you to handle what you need to handle but also recognize when you need his assistance,” says Epperson, who worked for Utay at Akin Gump before Utay recruited her to join his legal department in June 2002.

“He isn’t one of those bosses who lavish praise or those who ever, ever raise his voice to you. If you are doing a good job, he will pile work on you, and if you aren’t, you will be bored,” she says.

Utay says his big concern lately has been privacy issues, because the company is involved in collecting marketing data for clients, and privacy laws seem to change on a regular basis. His job is making sure the company knows the privacy laws and can predict where those laws may go as Alliance Data develops new lines of business. [See Best-Practices Q&A.]

“Trying to counsel people when you don’t know what the law will be . . . it really brings a lot of strategy into play,” Utay says about the challenges of privacy law.

For example, Utay says, asking customers of Alliance Data’s clients to opt-in to e-mail marketing communications does not necessarily shield his company from future privacy issues.

Akin Gump is the company’s go-to outside firm, but Utay says the company uses Sidley & Austin for banking matters and Morrison & Foerster for privacy issues.

In his spare time, Utay says he enjoys spending time at his lake house on Cedar Creek Lake with his wife and 3-year-old son.

Brenda Sapino Jeffreys is on Twitter at www.twitter.com/BrendaSJeffreys.

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