Frederick J. Caspar

Experience

Represented an ESOP-Owned Client During a $70 Million-Plus Stock Sale

Client: The seller

We represented an ESOP-owned company engaged in the wholesale brokerage, distribution and sale of grocery merchandise. Our client sold its stock to a private equity buyer for a transactional value in excess of $70 million. This enabled the buyer to expand its operating territory and allowed our client’s operation to further grow and expand its operations under the new ownership.

Blackhawk Mining Acquires Patriot Coal Corporation

In October 2016, a transaction closed in which Blackhawk Mining (Blackhawk) purchased most of the assets of Patriot Coal Corporation (Patriot) out of bankruptcy. Dinsmore served as counsel to the acquirer, Blackhawk, who had previously purchased other portions of Patriot’s assets in 2014.

The acquisition resulted from Patriot filing bankruptcy for the second time in three years, which added several layers of complexity to the transaction. Many parties were involved in the deal, including among others, the sellers, lenders, creditors, lessors, suppliers, and the United Mine Workers of America, whose existing contract with Patriot was rejected and replaced with a new contract negotiated with Blackhawk. Blackhawk’s bid was selected as the stalking horse offer, but several other interested buyers submitted competing offers, and an aggressive auction process ensued.

The total value of the transaction approached $1 billion. In addition to a multi-tiered financing structure involving the issuance of new equity securities in Blackhawk and the restructuring of Patriot’s and Blackhawk’s prior loan facilities with over $900,000,000 in new debt, the deal involved the assumption by Blackhawk of substantial reclamation and other liabilities, the posting of new bonds with state environmental authorities, and agreements to perform reclamation work on mining sites purchased from Patriot by the Virginia Conservation Legacy Fund.

“This was a very large and difficult transaction, which took months of work by numerous attorneys and staff in many departments and office locations,” said Susan Zaunbrecher, Corporate Department Chair. “The team of Dinsmore attorneys worked cohesively for our client, and, in the end, beat out a lot of impressive competition.”

Most of the six active mining complexes in the acquisition are located in West Virginia, with additional properties and mines in Kentucky, Ohio, Indiana and Illinois. Blackhawk saw the Patriot acquisition as an opportunity to expand its presence in the metallurgical coal market, as a complement to its prominent position as a producer of thermal coal.

“The demand for all coal is down significantly,” said Chauncey Curtz, Chair of the Natural Resources Group. “As a result of this deal, our client is well-positioned to survive the downturn and enjoy continued success as a low cost producer of both thermal and metallurgical coal for many years to come. That’s the most important thing to us.”

Acquisition and Financing of Low Income Tax Projects

Handled over 20 transactions in the last 10 years, including closing real estate acquisition, tax credit investor transactions, construction and permanent financing and related financing.

Financing for Mixed-Use Development Project

Represented two well-known developers and an investment partner in a $75,000,000 mixed-use retail, office, entertainment and residential development project in Cincinnati. The deal included Bond, Tax Increment and New Market Tax Credit financing for construction of the University Square Project. In total, the transaction spanned three years, leveraged a multitude of financing vehicles including a blend of grants, bonds and tax credits and involved negotiations and coordination between three law firms, a public university, the City of Cincinnati and one of the area’s largest regional banks.

Multi-Step Tax Deferred §1031Exchange of Assets

Structured, for a communications tower company, a multi-step tax deferred §1031 exchange of assets. This transaction involved numerous "out of the box" aspects, including incorporating forward and reverse exchange structures, and the transfer and acquisition of multiple asset classes, both tangible and intangible.

Reorganization

Reorganization of a real estate company owning over $1 Billion in value of rental properties. This restructuring was designed to be completely tax free, and to allow for the tax-free award of ownership interests in selective properties to various key employees who have management or supervisory responsibilities with respect to those specific properties. The permutations of pairing such executive awards to specific properties were numerous, and the structure was designed to allow for such selective award of ownership interests in a manner that was not only tax free to the company and the executives, but to also allow for such ownership through a common holding company for maximum simplification, for retention of control in the hands of the majority owner, and for appropriate asset protection insulation among properties and from non-property creditors.

Sale and Leaseback of Assets

Structured the sale and leaseback of a large block of assets for the U.S. Subsidiary of a FTSE100 company. This transaction was effected through various Delaware Series Trusts. The transaction was structured to be treated as a sale and "true" lease for federal income tax purposes, but in a manner to minimize or avoid sales and other transfer taxes.

Sale of Technology Company

When Space Computer Corporation, a technology company that specializes in software for hyperspectral sensors, sought counsel to guide them through a merger with ITT Exelis, they turned to Dinsmore. Space Computer Corporation’s business includes the development and production of hyperspectral sensors, which are installed on satellites, manned aircraft and unmanned vehicles to detect hidden or obscure targets, cue other sensors, and downlink real-time data to analysts, including providing such services and products to the defense industry, U.S. military and government organizations. We were tax and transactional counsel, advising the clients on all aspects of the transaction, including tax structuring, negotiating terms, drafting the applicable documents, closing, and ensuring that our client’s interests were protected throughout the entirety of the transaction.

Syndicated Revolving Credit Facility

We assisted a long-time privately held client in negotiating, and on January 31, 2011, closing, a syndicated revolving credit facility of up to $125,000,000. In connection with obtaining the financing, we also assisted our client in a major and complex restructuring of its ownership and subordinated debt structure that had significant tax implications.

Tax Representation Related to Affordable Housing Projects

Representation of real estate developers, owners and operators, on an annual basis in excess of $100 Million in assets, in connection with numerous affordable housing projects under §42 of the Internal Revenue Code. This representation includes all tax aspects under §42, Subchapter K, and related tax planning, in connection with the acquisition, construction, development, syndication and operation of such projects.

Tax Structuring

Planned tax structuring in connection with the reorganization of a publicly traded manufacturing company in bankruptcy. Planning involved numerous domestic and foreign operations and subsidiaries, and included planning to maximize the use of all tax attributes and maximize basis step-up for the post-bankruptcy reorganization owners of the various business segments.