There is a bit of optimism in L.A.'s legal community that business will be back to something close to normal within several weeks. But they also forecast some grim legal ramifications.
Lawsuits regarding casualty and insurance, as well as business interruption, are very possible, said Mike Finnegan, chairman of the litigation department in the L.A. office of Pillsbury Winthrop LLP.
Claims also might be filed against the U.S. government for negligence, loss of life or property damage, said Ed Feo, managing partner of the L.A. office of Milbank Tweed Hadley & McCloy LLP.
One chief concern is the prospect of recession. Many investors already were waiting for better times, but after the tragedies in New York, they may wait longer even into the holiday season. That could force many more companies into bankruptcy.Client Calls
Perhaps the biggest impact for local law firm clients is destruction in the financial services industry. But few can really assess the short- or long-term damage.
"We'll find there may be entire businesses that are dramatically wiped out by this incident," Finnegan said.
Firms are also re-evaluating acquisition and financing deals by reading the fine print. "A lot of clients are calling, asking to interpret agreements in light of the potential uncertainties," said Marty Zohn, managing partner at Proskauer Rose LLP.
Among those uncertainties, in boiler plate clauses, are references like "impossibility of performance" and "events of war."Deal Interruptions
The terrorist attacks on the World Trade Center halted daily operations and deals among area law firms, leaving many unsure what to expect in the days ahead.
The initial shock on Sept. 11 sent many lawyers home and scrambling to reach friends, colleagues and relatives. But they were back the next day.
For New York-based firms, the tragedy hit closer to home.
Ed Feo, managing partner of the L.A. office of Milbank Tweed, said his office spent most of the week assisting the 300-person headquarters in New York, located three blocks from the World Trade Center. The firm moved its New York headquarters temporarily to a smaller midtown Manhattan office.
"We're supporting the entire domestic practice in word processing, secretarial services and the like because the lawyers in New York have work to be done," Feo said. The L.A. office employs 70.
O'Melveny & Myers LLP managed to close a deal last week that was originally supposed to be handled out of New York.
Staff Reporter Amanda Bronstad covers the legal community and can be reached at (323) 549-5225 ext. 225, or at firstname.lastname@example.org
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