Jeffrey B. Korn

On December 8, Willkie scored a major win for its longtime client, the NARCO Asbestos Trust, in a long-running dispute with Honeywell, resulting in court approval of a $1.325 billion “Buyout Agreement” with Honeywell and the Trust’s claimant fiduciaries.  This agreement resolves more than seven years of litigation and other disputes between Honeywell and the Trust. The payment will enable the Trust to continue to fully compensate asbestos victims, efficiently administer the Trust, and eliminate any potential future interference by Honeywell. Under the parties’ agreement, Honeywell will pay the Trust $1.325 billion in cash in exchange for a release of its “evergreen” obligation to fund the Trust.   U.S. Bankruptcy Judge Thomas P. Agresti in the Western District of Pennsylvania issued the final opinion and order. NARCO, which produced heat-resistant materials containing asbestos, filed for bankruptcy in 2002, and emerged from bankruptcy in April 2013, at which time a federally authorized trust was established to evaluate and resolve all existing NARCO asbestos claims (the “Trust”). Honeywell owned NARCO from 1979-1986 and, under an agreement, the company is obligated to fund the Trust in perpetuity as it pays out claims for asbestos injury related to exposure to NARCO's products. Those obligations currently include annual payments to cover claims as they come in (subject to an annual cap), and a separate obligation to pay the expenses for the administration of the Trust. In September 2021, Honeywell sued the Trust in the U.S. Bankruptcy Court for the Western District of Pennsylvania, alleging the Trust was paying too many asbestos claims in violation of the Trust’s governing documents.  In fewer than nine months, Willkie took or defended twenty-three depositions, filed and opposed numerous pre-trial motions, shepherded four expert reports, and received and produced voluminous document discovery.  During a one-week trial in May 2022, Willkie’s litigation team undermined each of Honeywell’s claims through pointed cross-examinations and affirmative testimony. After trial, Honeywell agreed to make an upfront, lump-sum payment of $1.325 billion to the Trust—nearly half a billion dollars more than Honeywell had offered the Trust before filing its litigation last year.  In a 92-page opinion granting the Trust’s motion to approve the Buyout Agreement, the Court meticulously analyzed and rejected Honeywell’s litigation claims, discounted testimony by Honeywell’s trial witnesses, endorsed the Trustees’ discretion, and repeatedly credited the Trust’s trial witnesses. The Court further noted in its opinion that “the Trust has had the benefit of excellent legal counsel every step of the way” in its long-running disputes with Honeywell. A multidisciplinary team of Willkie attorneys, led by partner Rachel Strickland and senior counsel Joseph Baio, and including partners Daniel Forman and Stuart Lombardi, and associate Philip DiSanto, has represented the NARCO Asbestos Trust since 2015.  The Willkie team also included partners Jeffrey Korn, Laura Acker, and Isaac Silverstein.

Dec 20

2 min

On February 20, Willkie secured a crucial victory in the New York Court of Appeals for PDV Holding, Inc. (PDVH), a CITGO U.S. holding company, along with Petrόleos de Venezuela S.A. (PDVSA), and PDVSA Petrόleo, S.A., which were represented by co-counsel Paul Hastings (the PDVSA Parties). The court ruled that Venezuelan law rather than New York state law governs the validity of bonds issued by PDVSA—which are valued at more than $1.9 billion and implicate ownership of a controlling share in the parent company of U.S.-based refiner CITGO Petroleum Corporation (CITGO)— in the  dispute involving an alleged violation of the Venezuelan constitution. In 2017, Venezuela’s state-owned oil company PDVSA, at the behest of Nicolás Maduro, purportedly issued bonds (the 2020 Notes) as part of an exchange offer to avoid defaulting on bonds coming due. To entice existing bondholders to enter the transaction, PDVSA sought to secure the 2020 Notes with a pledge of 50.1% of PDVH’s shares of its wholly owned subsidiary CITGO Holding, Inc., which in turn wholly owns CITGO. However, under Article 150 of the Venezuelan Constitution, Venezuela’s legislature, the National Assembly, must approve “national public interest contracts” prior to execution. The opposition-controlled and U.S.-recognized National Assembly never approved the issuance of the 2020 Notes. After the U.S. Government deemed the Maduro regime illegitimate in 2019, the opposition-controlled PDVSA defaulted on the invalid bonds. In October 2019, the PDVSA parties filed a declaratory judgment action in the Southern District of New York seeking a judgment that the 2020 Notes were invalid, illegal, null and void ab initio. The bondholders filed counterclaims and SDNY ultimately granted summary judgment in favor of the bondholders. On appeal, the PDVSA parties argued that the act of state doctrine required that U.S. courts defer to the official action taken by the National Assembly in rejecting the issuance of the bonds, and further that Venezuelan law applied to the question of the bonds’ validity. In October 2022, after oral argument, the Second Circuit issued its decision declining to rule on the act-of-state question and certifying questions to the New York Court of Appeals regarding whether a determination of the validity of the 2020 Notes is a question of New York or Venezuelan law. In this most recent ruling, the New York Court of Appeals agrees with the PDVSA Parties that New York’s UCC provisions require the application of Venezuelan law. The ruling sets forth an avenue for the PDVSA Parties to argue that Venezuela’s constitutional prerequisites render the bonds invalidly issued, as well as to reassert applicability of act of state deference to the National Assembly’s preemptive rejection of the bonds. With this key ruling in place, the case now returns to the Second Circuit, which will consider the New York Court of Appeals’ decision in determining whether to reverse the lower court’s summary judgment ruling. The decision is also important for the ongoing litigation concerning the ownership of a controlling share in CITGO’s parent company. The Willkie litigation team consists of partners Michael Gottlieb, Jeffrey Korn, Nicholas Reddick, and Kristin Bender, and associates Melissa Taustine, Amanda Payne, Tim Ryan, and Dylan Evans.

Feb 23

2 min

Willkie litigators recently obtained a total victory for Insight Partners (Insight) and its co-founder/managing director Jeffrey Horing in the Delaware Court of Chancery by securing the dismissal of a complaint challenging nCino Inc.'s $1.2 billion acquisition of SimpleNexus LLC in August 2021. According to the plaintiff, nCino’s purchase of SimpleNexus was unfair because Insight stood on both sides of the transaction and had caused nCino to overpay for SimpleNexus. Insight had previously been nCino's majority stockholder before nCino went public in 2020, and Insight was also SimpleNexus's majority stockholder. The plaintiff emphasized that nCino had purchased SimpleNexus for $1.2 billion even though Insight had purchased its majority stake in SimpleNexus just seven months earlier allegedly at an implied valuation of $169 million. Plaintiff sought more than $744 million in damages based on Insight’s profits from the transaction. Vice Chancellor Zurn rejected the plaintiff’s arguments, and decisively ruled in Insight's and the nCino directors' favor. The Court found that a majority of nCino's board of directors was disinterested and independent of Insight, and so the plaintiff had not shown that a stockholder litigation demand would be futile, as required to assert a derivative claim on behalf of nCino under Delaware law. Defendants prevailed by pointing out that only a single director on nCino's seven-member board was directly employed by Insight, that Insight's lone director had been walled off from the transaction process, and that Insight held only a minority stake in nCino at the time the complaint was filed. The Court also held that Insight's influence over the election of nCino’s directors as 32% stockholder—as well as the plaintiff's attempts to draw ties between Insight and the nCino directors—did not impair the nCino directors' ability to independently consider litigation against Insight. The Willkie litigation team consisted of partners Jeffrey Korn, Tariq Mundiya and Richard Li, and associates Ciara Sisco and John Catalanotto.

Jan 16

1 min

Willkie advised Acronis AG, a leading cybersecurity and data protection platform for managed service providers, in connection with a sale of a majority stake to the EQT X fund. On August 7, Acronis announced that EQT is acquiring a majority stake in the company, with founders, management and certain existing investors remaining as significant minority shareholders. Acronis is a global cyber protection company that provides natively integrated cybersecurity, data protection, and endpoint management for managed service providers, small and medium businesses, and enterprise IT departments. The Willkie team was led by partners Howard Block, Gavin Gordon and Jeffrey Korn and included partners Michael Katz, Andrew Gray and Rahul Saha and associates Alaric Green, Ethan Douglas, Ben Pearlman, Nayanika Ruia and Harry Buchanan.

Aug 9

1 min

Kaseya’s decision to cooperate with the DOJ and FBI in the hours and days following the cyberattack enabled law enforcement to identify and arrest the man allegedly behind the attack. Willkie’s Cybersecurity and Privacy team advised and represented Kaseya, an IT management and monitoring software provider, in the wake of one of the largest and most highly-publicized ransomware attacks in history. On November 8, the DOJ announced the arrest of one of the two men, a Ukrainian national, allegedly behind the attack. The incident, which took place in July, involved a Russian-associated group leveraging certain features in the Kaseya software to deliver ransomware payloads to approximately 800-1500 of Kaseya’s customers and downstream users worldwide. As part of Kaseya’s response and recovery efforts, Willkie advised the company on several fronts. The team led strategies for briefing and coordination with the federal government and other executive branch policymakers; conducted outreach to Congressional leadership; responded to inquiries from state AGs and other regulators; retained forensic consultants to identify the nature and scope of the incident and any potential fixes, and oversaw the investigation conducted by the forensic consultants, including the development of any relevant reports or other updates. The team also provided ongoing counsel on communications with Kaseya’s Board and developed vehicles and messaging to engage customers with potential fixes, updates, and decryption tools. As a result of Willkie’s efforts, DOJ officials praised Kaseya for cooperating with the government, which enabled the government to help victims of the attack and ultimately arrest the man who allegedly spearheaded it. The matter and Willkie’s representation were covered by The National Law Journal. The article can be found here. The Willkie team was led by partners Laura Jehl and Daniel Alvarez and counsel Richard Borden, and also included partners Jeffrey Clancy, Elizabeth Bower, Matthew Guercio, Jeffrey Korn and David Murray.

Nov 17

1 min