It was a day before Hurricane Harvey was forecast to strike Texas, and with the deadline looming to complete a complicated transaction for a client, Haynes and Boone partner Ricardo Garcia-Morenoin Houston said he started to panic.
“To put it mildly, at about 2 o’clock on Thursday, I started to freak out. We were a week away from closing,” said Garcia-Moreno, who dealt with no power at home when Hurricane Ike hit Houston in 2008 and was worried he would have the same issue with Harvey.
Garcia-Moreno said he and Chad Mills, a Haynes and Boone partner in Houston also working on the deal, decided to send associate Valisa Berber-Thayer to Dallas because that’s where Akin Gump Strauss Hauer & Feld lawyers on the other side of the deal were.
Berber-Thayer flew out the next morning, and she spent the next week working long hours out of Haynes and Boone’s headquarters office as the point person in Dallas for Traxys in its acquisition of CMC Cometals from Irving-based Commercial Metals Co.
The deal closed on Aug. 31 as planned. Traxys North America and Traxys Europe purchased the CMC raw materials trading division for about $179 million.
“Haynes and Boone gets all the credit for positioning their assets where they needed to be so they didn’t affect the deal,” said Garrett DeVries, a partner in Akin Gump in Dallas who represented CMC on the transaction.
“It was a smooth closing,” he said.
Harvey made landfall on the Texas coast on Friday, Aug. 25, and over the next few days dumped 51 inches of water on Houston, causing widespread flooding throughout the area and prompting many Houston firms to close their offices for a few days. Garcia-Moreno said sending Berber-Thayer to Dallas turned out to be the right call, as he and Mills worked from home over the weekend and the following week as the rain inundated Houston and flood waters rose. “For the small price of paying for Val’s travel to Dallas, it was an insurance policy that paid off tremendously. I’m 100 percent sure that if she had not gone up there, the deal probably would not have closed,” Garcia-Moreno said.
“Valisa kept everyone organized. She kept the whole thing moving forward, even though we were dealing with a very big crisis back in Houston,” he said.
While working at home during the storm, Garcia-Moreno said he lost internet service from the morning of Aug. 27 through the afternoon of Aug. 30. He was trying to work from his cellphone, but his service was spotty and he had difficulty opening documents from his cellphone and couldn’t participate in all of the conference calls on the deal.
“We lost electricity for about 30 hours at the house. We were lucky we didn’t have issues with the flooding, but we couldn’t get anywhere,” Garcia-Moreno said. A house only three doors away from his in his southwest Houston neighborhood flooded.
“We were literally surrounded. It was like a moat,” he said.
Mills, meanwhile, who lives in the Heights area of Houston, didn’t lose power or internet service, so could pick up the slack from Houston.
Mills said the power was out at the firm’s office in downtown Houston, but the firm’s IT department kept systems running and lawyers had remote access.
The deal, which started back in February, was complicated even without Harvey, Garcia-Moreno said, because a number of jurisdictions were involved. “We were continuing to negotiate documents, dealing with a lot of logistical issues, getting consent from customers, at the same time trying to coordinate all of these moving pieces in Luxembourg, in Russia, in China, so there was constant communication with the company,” he said.
Mills said it wasn’t just the Houston deal team that had to deal with the impact of Harvey. He said one of the companies that needed to provide a consent is headquartered in Houston, and that document came through literally at the last minute. And they had to line up simultaneous closings in a number of jurisdictions and consents from a number of counter-parties, he said.
DeVries said it was a very busy transaction, and complex because it had parts in China, Europe and the United States. He worked on it along with Dallas counsel Nicholas Houpt and associate Alex Poor, and Paul Kirkpatrick, vice president, general counsel and secretary at Commercial Metals.
Mills said no lawyer wants to miss a closing date, even if the reason is a hurricane.
Berber-Thayer said that because of technology, she did not have any difficulty working out of the firm’s Dallas office on the acquisition. And on a personal level, being in Dallas was fortuitous. Berber-Thayer was scheduled to fly to Brussels on Sept. 2, two days after the deal closed, and with Harvey disrupting flights out of Houston, Berber-Thayer said she had the comfort of knowing she could change her flight and travel from Dallas.
She made her trip.
Senior reporter Brenda Sapino Jeffreys covers the business of law in Texas. Contact her at firstname.lastname@example.org. On Twitter: @BrendaSJeffreys.