Did Wachtell Really Get UBS a Good Deal?

Previously, we’ve asked how Wachtell did on a deal, but this time it’s the litigation side (or as the gone-but-not-forgotten Poison Pill blog called it, the “slip n’ fall practice group“).

Not too long ago, Wachtell was being lauded for getting a “good deal” by negotiating a $780 million settlement for its client.

To clarify: that’s a $780 million payment BY its client, UBS, in connection with defrauding the IRS of tax revenues on billions of dollars held in offshore bank accounts.

The latest developments after the jump (and we don’t give their co-counsel at Cravath a free pass, either).

The amount of the settlement wasn’t the “big win” – it was keeping the individuals’ names out of the government’s hands.

Now that is off the table, too.

As far back as February, AmLaw Daily found lawyers willing to go on record saying that Wachtell’s John Savarese (Harvard ‘77, JD ‘81) had negotiated a good deal for UBS because the bank wouldn’t be caught between Swiss bank-secrecy laws and the US DOJ, which brought the action.

Even in June, optimism was running high that the settlement would get UBS out of the middle and the DOJ would be forced to track down the names by a “John Doe” summons in Florida district court.

Then, UBS agreed in principle to a settlement that included disclosing the names. But now even that has hit a snag.

The Swiss government’s finance, foreign affairs and justice ministries are lobbying on behalf of UBS, illustrating how the lawsuit has evolved into a matter of state interest for Switzerland.

“The negotiation team of Swiss justice, foreign affairs and finance departments will continue to clarify the details for the settlement,” Justice Minister Eveline Widmer-Schlumpf said in a statement.

At the request of Zurich-based UBS and the IRS, U.S. District Court Judge Alan Gold in Miami again postponed proceedings in the case and scheduled a telephone status conference for Aug. 12, when the parties are expected to update him on the progress of negotiations.

UBS and the U.S. government announced last week that they had agreed in principle to settle the case. They had hoped that a deal would be finalized by Friday morning.

Absent a final settlement, Gold had been scheduled to begin hearing evidence in the case Monday. That court hearing is now scheduled for Aug. 17.

So now that the client agreed to a massive fine and isn’t even getting to keep the names private, did Wachtell and Cravath really get a good deal?

Related posts:

1. Deal Prof: Wachtell Did Fine
2. Quick Shucks – 8/12/09
3. Judge Wants Wachtell, Shearman Called on Carpet
4. Wachtell Dumped
5. Bad Blood Building Between Wachtell and Paul Weiss