Company ownership changes affect counsel

While that’s generally good news for local commercial-transaction attorneys, it’s not all gravy. Some lawyers who have represented a business for years are retained by its new owners. Others are left with one less client.

Attorney David Agee of Blackwell Sanders Peper Martin said he feels an impending loss when one of his clients wants to sell a business.

“Obviously, your first thought and assumption is (that) you’re selling your client,” he said. “To the victor, or the buyer, go the spoils, and (buyers) usually have their own separate legal counsel.”

That was the case in 2001, when Agee helped Pat McKee sell Precision Stainless Inc., 501 N. Belcrest Ave., to ITT Industries, a multifaceted and multinational manufacturing firm that reached $6.8 billion in sales in 2004.

ITT had its own attorneys and had no interest in retaining Agee’s services.

Fortunately for Agee, McKee was one client he did hang on to, as McKee has several commercial properties for which he retained Agee’s services.

Also, McKee turned to Agee when he bought Holloway Machine Co., 1339 N. Cedarbrook Ave., from United Machinery & Supply Co. in October.

“We believe he’s one of the best transactions attorneys in the country,” McKee said. “We really enjoyed working with him.”

Agee has had plenty of opportunities to help clients buy and sell businesses in Springfield. National and multinational companies want a stake in the growing market.

“I get calls every week related to either a purchase or a sale,” he said.

Agee has handled business transactions ranging from $500,000 to $900 million, and he said both strategic buyers and investment buyers are targeting trucking, hotel, manufacturing and technology firms most. While Agee declined to talk about case specifics, he said the $900 million deal involved a publicly traded hotel chain that went private.

The Law Office of Neale & Newman LLP assisted in 50 mergers or acquisitions in 2005, according to attorney Dwayne Fulk, and he anticipates that that number will rise to 75 this year.

Fulk said local attorneys’ experience could be an asset for corporations that buy local businesses, even if the corporations have their own legal staffs.

“Typically, what’s happened is that companies have been purchased by out-of-state entities, and so they still need local counsel,” he said.

However, Agee said, conflict-of-interest issues can come into play.

“Your loyalty always stays with your first client,” Agee said.

Patrick Douglas, a partner in Bolivar’s Douglas, Haun & Heidemann PC, said many of the mergers and acquisitions he handles are through clients who only seek his services for the ownership change and don’t plan to retain his services anyway.

“I’m always here, looking out for the client’s interest and not mine,” Douglas said. “(Losing a client) doesn’t bother me at all.”[[In-content Ad]]