Arter & Hadden, a 160-year-old Cleveland-based law firm that has 10 officesaround the country and a half-dozen lawyers in the municipal securities area, will closeits doors on Tuesday.
The firm was a victim of a rapid expansion in the 1980s and 1990s that saddled it withmajor overhead expenses and left it with only about 240 of the 450 attorneys it hadbrought on board during its peak period in 1999, according to its attorneys.
"Much of our dramatic growth was unprofitable, which led to significant attrition incertain offices," said Dan Bailey, the firm's chairman.
At least two new law firms will rise from Arter & Hadden's ashes next week - BaileyCavalieri LLC, with about 45 lawyers, will open its doors in Columbus on Wednesday, andTucker Ellis & West LLP, with about 100 partners and associates, will set up shop inCleveland the same day.
But it is not yet clear whether any of Arter & Hadden's municipal securities lawyerswill be joining either of those two firms.
The firm had roughly 15 muni bond and tax lawyers in the mid-1980s, but only a halfdozen in recent years and they were all located in the Cleveland, Columbus, Washington,D.C., and Los Angeles offices.
At least two of the six muni lawyers have joined other firms, but it is not yet knownwhere David L. Miller and the other three will land.
Miller, a Washington-based lawyer with 20 years experience as special tax counsel andunderwriter's counsel in muni financings who has specialized in tax law controversycases in recent years, said he has several irons in the fire at the moment.
Miller was one of the lawyers that represented Santa Rosa, Calif., in a dispute that ledthe U.S. Tax Court in May to overturn a previous Internal Revenue Service decision andconclude that the city could issue tax-exempt bonds to finance a pipe that transportstreated wastewater to a geyser field where it is used by private companies to generateelectricity.He also represented the Marengo County, Ala., Port Authority in one of the longestrunning IRS audits of a muni bond deal. The authority reached a settlement with the IRSlast November over an alleged arbitrage-driven deal involving $3.9 million of zerocoupon bonds issued in 1989, with a maturity amount of $138 million. The settlementamount was undisclosed.
Francis R. Snodgrass, a colleague of Miller's in the Washington office who practices inthe municipal and corporate securities markets, said, "I don't have anything to reportat the moment."
Also unclear are the fates of Eugene M. Killeen and David S. Lu in the Cleveland office.Both practice in the corporate as well as municipal securities markets. Killeen has donea lot of work in the health care area, in particular.
Meanwhile, Harriet M. Welch has joined the law firm of Squire, Sanders & Dempsey LLP inLos Angeles. She had been a partner in Arter & Hadden's Los Angeles office, representingissuers, underwriters and other transaction participants in muni bond financings inCalifornia.
Thomas J. Onusko left Arter & Hadden's Cleveland office to join the firm of Vorys,Sater, Seymour and Pease. He is "of counsel" to the firm and is practicing in itscorporate office. He also has a great deal of experience in the health care area and hadparticipated in many hospital revenue bond and industrial development bond issues at theArter & Hadden firm.
Arter & Hadden's other offices were located in Dayton, Ohio; Dallas; Irvine, Calif.; SanDiego; San Francisco; and Woodland Hills, Calif. The firm also had a European affiliatein Geneva, Switzerland.
