Cravath Gains Favorable Ruling in Conflict of Interest Case

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Cravath, Swaine & Moore will be allowed to represent Air Products and Chemicals in its attempted takeover of rival Airgas Inc., a Delaware Court ruled Friday. The judgment came as the result of a conflict of interest suit filed against Cravath because the firm had previously represented both companies.

Delaware Chancellor William Chandler called a disqualification a “Draconian” measure because there was no evidence that any information Cravath gleaned while representing Airgas would be used in the buyout case, Reuters reports.

“Airgas here has not demonstrated…persuasively, let alone clearly and convincingly, that it would be disadvantaged by the presence of its former counsel as advocate for its opponent, Air Products,” Chandler said in his ruling.

  

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According to previous reports, Cravath has represented Air Products for at least 43 years. The firm also worked for Airgas from May 2001 until October 2009, but then resigned when it was made known of the pending offer.

Cravath told Reuters the decision “speaks for itself” and offered no further comment. Air Products said it intends to move forward in its proposed $5.1 billion acquisition, which Airgas has called grossly undervalued. Reuters reports the two companies would have about $13 billion in annual sales if the merger goes through.