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We cover the big stories your colleagues are talking about, digests of the day's big litigation and corporate news, salary/bonus/layoff developments and interesting law firm and law school news. We keep it topical and direct so that you can go back to billing.

In today's Lookzy:

• The inside story on some 4D chess moves in crypto M&A

• Litigating the definition of "beer"

• Who's involved in some recent big deals

• Latest on US law firm profitability

CRYPTO M&A: EAT OR BE EATEN

FTX, the princeling crypto exchange which just weeks ago was seeking to raise $1 billion at a $32 billion post-money valuation today announced that rival Binance, the largest crypto exchange in the world, agreed to buy it as it stands on the verge of collapse.

Here's the inside story.

Binance, led by a man who goes by "CZ", perhaps the richest man in the world, was an early seed investor in FTX. FTX, led by Sam Bankman-Fried ("SBF"), a brilliant, 29-year old billionaire, enjoyed a rapid ascent to become the world's #2 crypto exchange and, in the process, a direct competitor of CZ and Binance.

Due to its competitive position, Binance decided last year to exit its FTX position to the tune of $2 billion dollars, which is paid out in largely in FTT (FTX's own token). As the relationship fully breaks down (Binance believes FTX is lobbying regulators against it, SBF tweets negatively about CZ), CZ tweets that Binance will market dump its massive FTT stake over the coming months. He doesn't respond to a FTX offer of an OTC trade.

The price of FTT naturally dumps. FTX apparently attempts to maintain the price by throwing money at it, but Monday night it collapses.

Buy why is this existential for FTX? A key part of this is that there is a hedge fund called Alameda which is somewhat of a sister organization to FTX: largely controlled by SBF, a FTX market maker and just generally intertwined in the fate of the exchange. Alameda historically prints money and is viewed as a tier 1 fund.

Now that view has certainly changed. Although purely speculation for now, many assume that FTX may have lent customer funds to Alameda, and FTX and/or Alameda took on significant loans with FTT as collateral. With the FTT price collapsing, they were getting margin called. At the same time, public fears about the state of the exchange meant that users were withdrawing billions in funds. Together, this was the perfect storm for a liquidity crisis.

Things came to a head when it became clear that FTX had stopped processing user withdrawals. Within hours, SBF and CZ tweeted that FTX had come to Binance - its seed investor, then foe, then spark that kicked off this storm - for help. Binance and FTX signed a non-binding letter of intent for Binance to acquire FTX (not including FTX.US), subject to due diligence, likely for pennies on the dollar.

Given the circumstances, it will be interesting to see what comes of DD and whether antitrust (80% market share) or other concerns block the acquisition. Never a dull day in crypto.

ECON SNAPSHOT

The difference between special bonuses and layoffs.

THE VERDICT

Arguing today's litigation news

Twitter & Tesla. Some Twitter employees have filed a class-action lawsuit over Musk's layoffs, saying the company didn't provide enough notice under the WARN Act. Musk has experience fighting such claims; a federal judge just decided that former Tesla factory workers must arbitrate their mass layoff notice claims.

MoviePass. The CEO of MoviePass and the Chairman and CEO of Helios & Matheson Analytics Inc. ("HMNY"), its parent company, were indicted for defrauding investors through materially false and misleading representations relating to HMNY and MoviePass’s business and operations to artificially inflate the price of HMNY’s stock and attract new investors.

AI Lawsuits. Microsoft's GitHub Copilot and OpenAI are being sued in a class action lawsuit because of their use of open source and other licensed code in training their AI programs without credit.

More crypto. The US Attorney for SDNY announced that $3.36 billion worth of Bitcoin was seized in an arrest related to the Silk Road. Separately, the SEC charged the creator and three US promoters of an alleged global crypto ponzi scheme with a $295 million fraud.

Hacked, then enforced. SolarWinds warns of potential SEC enforcement action after a 2020 hack by Russian spies. Lesson? Don't get hacked. Or, at least don't mislead investors after you're hacked.

What is "beer"? Constellation Brands must face a lawsuit claiming that its Corona hard seltzer violates an agreement with AB InBev-owned Grupo Modelo, partially riding on whether seltzer falls under the umbrella of "beer".

Musk back in court. A Tesla shareholder claimed that Elon Musk's potential $55 billion Tesla pay package is rife with conflicts of interest, with the board setting easy performance targets. Musk again faces Judge Kathaleen St. J. McCormick, the same judge who oversaw the Twitter trial, starting November 14th.

LBRY a security. A first circuit federal judge ruled in favor of the SEC in a crypto case many expected crypto to do well in. The LBRY token, used at least partially for utility purposes, was deemed a security.

Theranos. Elizabeth Holmes' request for a new trial was denied by a federal judge on Monday.

Kirkland wants to get paid. Kirkland has requested more than $16 million in attorney's fees after winning a $40 million jury trial verdict for Comet Technologies in a suit against a rival company.

Fitness lit. Peloton and Echelon Fitness, a rival fitness company, announced they have settled all pending litigation between the two companies, more than three years after Peleton first sued Echelon for patent infringement.

THE DEAL

Wheelin' and dealin' today's corporate news

Healthcare. Walgreens' VillageMD agreed to acquire Summit Health in a $8.9 billion deal. Sheppard Mullin and Clearly represented VillageMD and Summit, respectively.

Salvage vehicles. Ritchie Bros., a Canadian company, agreed to acquire vehicle platform IAA in a $7.3 billion cash and stock deal. Goodwin Procter, McCarthy Tétrault LLP, Skadden, Cooley and Blake Cassels & Graydon LLP were all involved.

Hostile Kushner. Kushner Companies $4.3 billion unsolicited takeover bid for Veris Residential was rejected by Veris.

Haute M&A. Gucci's parent company Kering has been engaged in advanced talks to acquire Tom Ford over rivals like Estée Lauder.

Delisting. Commercial electric vehicle maker Arrival received a delisting warning from Nasdaq. Twitter was delisted from NYSE on Tuesday, Nov. 8.

ESG. US republican lawmakers issued a warning via a letter to 51 corporate law firms, including Skadden, Latham, Kirkland and others, regarding providing advice on ESG issues.

EU trust-probing. Microsoft's $68.7 billion potential transaction with Activision will be subject of an in-depth EU antitrust probe.

BUSINESS OF THE FIRM

Firm Moves: 

• Walter M. Norkin, the assistant US attorney responsible for indicting El Chapo, joined boutique firm Akrivis Law Group PLLC in Miami.

• Seyfarth hired Michael Herbst, Russel Robertson and Ryan Dumm from midsize firm Schwabe, Williamson & Wyatt in Seattle.

• Linklaters' GC, Michael Bennet, stepped down after one year in the role.

• Dentons' global chairman Joe Andrew stepping down after 10 years in the role. Dentons is now retiring the global chairman role.

• Gibson Dunn hired James Hays from Simpson as a partner in Houston.

• Winston & Strawn hired Larry Murphy from Mayer Brown as a partner in Houston.

• Steptoe & Johnson hired DOJ senior antitrust attorney Lee Berger as a partner in DC.

Industry News:

• US law firm profitability fell in the third quarter, continuing a downward trend that began at the start of 2022.

• Greenberg asked a federal court for permission to stop representing Kanye West in a copyright lawsuit.

• Twitter's Compliance Chief Jisha Dymond left the company and joined privacy software firm OneTrust.

• Great, more CLE requirements: beginning July 1, 2023, NY lawyers will need to complete one CLE credit hour of cybersecurity, privacy and data protection as part of their CLE requirements.

BOILERPLATE

Alright, back to billing. That's all, folks!