Happy Wednesday. Here’s what we’ve got today…

• A look at Kirkland & Ellis’ venue shopping exploits

• Plus, Roche may offload cancer data platform Flatiron Health

Shopping around:

Kirkland & Ellis is a dominant market leader in large corporate bankruptcy advisory, representing debtors in around 20 percent of major public company filings from 2011 to 2020 — more than double its nearest competitor.

As a result, the firm seems to command extraordinary influence over which bankruptcy courts become preferred choices for filers: a Bloomberg Law analysis of case filings, released earlier this week, details how Kirkland leverages this power to shape the bankruptcy landscape to its liking, strategically shifting its cases between favored venues and punishing those that fall out of line.

For decades, Delaware was the go-to venue for the firm’s major Chapter 11 filings. But in 2015, Delaware bankruptcy judge Christopher Sontchi harshly criticized Kirkland's tactics as debtor’s counsel for Samson Resources Corp. after counsel expressed a fear that lenders would “kill” the company if Samson didn’t get its way.

“I’m trying to remember if I’ve ever been this furious in my career,” said Judge Sontchi. “And you don’t want me to make a decision when I’m this angry, but you’re being pigs, hogs. You’re asking for something I don’t want to give you, and you’re saying you’re going to kill the company if I don’t.”

Kirkland's response: after filing a case in May 2016, the firm didn't bring another bankruptcy to Delaware until October 2017 — an unusually long absence for such a prolific filer.

For many districts, a steady stream of large filings influences the number of bankruptcy judge positions they can justify. And, for their own careers, judges understandably prefer their district be as high-profile as possible, creating an incentive structure that strongly favors the pursuit of greater case volume and significance.

A similar story to Delaware also played out in the Eastern District of Virginia, which Kirkland had almost single-handedly transformed into a bankruptcy hotspot through the late 2010s. With just two judges handling large cases, Richmond's court developed a reputation for predictability and had become a favored venue for major filings. One of those judges, Kevin Huennekens, was a former partner at local firm Kutak Rock, which Kirkland frequently brought in as co-counsel.

In January 2022, U.S. District Court Judge David J. Novak issued a scathing critique of Judge Huennekens' handling of the Ascena Retail Group bankruptcy, in which Kirkland represented the debtor. Judge Novak condemned the "shocking" breadth of third-party releases granted in the case, which he said "close the courthouse doors to an immeasurable number of potential plaintiffs."

After last filing in Richmond the month before Judge Novak's ruling, Kirkland has not brought a single new bankruptcy to the Eastern District of Virginia since.

In recent years, the Southern District of Texas has been one of the firm's most favored locales, driven in part by favorable rule changes enacted by former Judge David R. Jones. Like Delaware, Jones was one of two primary bankruptcy judges in Houston and had ties to Kirkland — the firm frequently partnered with local firm Jackson Walker, whose lawyers included former staffers of Jones.

In October 2023, Jones resigned amid a well-publicized ethics scandal involving his undisclosed romantic relationship with a Jackson Walker partner. Kirkland has not filed a single new case in Houston since, a venue whose cases had contributed more than $162 million in fees over recent years, according to court filings.

Critics say venue shopping tactics raise serious questions about the integrity and fairness of the bankruptcy process. Regardless of true impact, the optics of Kirkland's antics have invited criticism over possible violation of the integrity of the bankruptcy process and the perception of a two-tiered justice system.

The concentration of cases in a handful of courts also raises concerns about judicial independence and the potential for regulatory capture, particularly given the implicit pressure on judges to rule favorably or risk losing future filings.

Some districts have taken steps to address these concerns: both the Southern District of New York and Eastern District of Virginia now use random case assignment for large Chapter 11 filings, and a group of bankruptcy academics and industry organizations recently urged the federal judiciary to require random assignment of large bankruptcy cases among all judges within a district.

But, for now, it's business as usual for Kirkland. The firm has recently increased its filings in New Jersey, which may signal the next emerging hub for major Chapter 11 cases has been chosen.

Until something changes (such as random case assignment), the firm has positioned itself as the beneficiary of an enviable positive feedback loop. Venue shopping has the potential to help clients, and Kirkland appears best able to extract that benefit. Prospective clients will naturally hire the firm they believe will deliver the best outcome, further growing Kirkland’s market share and judicial sway.

• Cinven agreed to acquire Vitamin Well Group, a collection of functional drinks brands, from Bridgepoint at a valuation of around €3 billion.

• KKR & Co. offered to acquire Fuji Soft, a Japanese software developer, for around $4.1 billion, amid pressure from activist shareholder 3D Investment Partners.

• Veritas Capital agreed to acquire NCR Voyix's (NYSE: VYX) cloud-based digital banking business for $2.45 billion in cash plus an earnout of up to $100 million.

• KKR (NYSE: KKR) will become the majority owner of FGS Global, a communications and public affairs consultancy, after agreeing to acquire an additional stake from WPP Group (LSE: WPP) at a valuation of around $1.7 billion.

• Thoma Bravo has hired Goldman Sachs to run a sale process for Cority, a sustainability compliance software platform, which could be worth around $2 billion.

• Littlejohn & Co. agreed to sell alphabroder, a supplier of branded uniforms and corporate apparel, to S&S Activewear.

• Roche (SWX: ROG) is considering divesting Flatiron Health, a cancer data analytics provider it acquired for $1.9 billion in 2018, and has hired Citigroup to assess options, per the Financial Times.

• Cinven has hired Harris Williams and Morgan Stanley to sell National Seating & Mobility, a wheelchair maker, with plans to launch the process after Labor Day 2024, per PE Hub.

• Bernhard Capital Partners agreed to acquire New Mexico Gas Company, the state’s largest natural gas utility, from Emera for $1.252 billion.

• The Chernin Group acquired a majority stake in BiggerPockets, an online community for real estate investing.

• Orlando Health agreed to acquire Brookwood Baptist Health, a five-hospital system in Alabama, for around $910 million from Tenet Healthcare (NYSE: THC).

• Bansk Group agreed to acquire PetIQ (Nasdaq: PETQ), a pet medication company, for $1.5 billion in an all-cash transaction.

• Platinum Equity acquired ASP Global, an Atlanta-based distributor of consumable medical products, from Incline Equity Partners.

• DWS Group and OMERS agreed to acquire Grandi Stazioni Retail, which manages commercial leasing and advertising spaces in 14 major Italian railway stations, from Antin Infrastructure Partners, ICAMAP, and Borletti Group.

• Aurora Capital Partners acquired GenServe, a provider of generator maintenance and repair services.

• EQT agreed to acquire a majority stake in Acronis, a cybersecurity and data protection software platform for managed service providers.

• Anacacia Capital agreed to acquire a controlling stake in MGI Golf, an Australian manufacturer of electric golf pushcarts.

• Pinchin, a portfolio company of Keystone Capital Management, acquired CodeGreen Solutions, a New York-based sustainability and code compliance advisory firm, from Victor Capital Partners.

• Midland Garage Door, a portfolio company of LongWater, acquired Martin Door, a Salt Lake City-based manufacturer of residential and commercial garage doors.

• Cyber Advisors, a portfolio company of Goldner Hawn, acquired BAI Security, an IT security assessment firm.

• Ziff Davis agreed to acquire CNET, a tech news and reviews website, for over $100 million from Red Ventures.

• Cerberus Capital Management invested in Vivace International Corporation, a manufacturer of specialty propulsion tanks for space and defense applications.

• Saudi Arabia's Public Investment Fund invested an additional $1.5 billion in Lucid Group (Nasdaq: LCID), an EV manufacturer, through its affiliate Ayar Third Investment Co.

• Analytical Technologies Group, backed by Reynolda Equity Partners, acquired Tritech Field Engineering, a life sciences equipment manufacturer.

• SPE Capital acquired OMOA Group, a provider of payment services in West and Central Francophone Africa, from Adenia Partners.

Tech, Vertical SaaS, & Misc. Enterprise

• Abnormal Security, a human behavior security platform, raised $250 million in Series D funding led by Wellington Management, with participation from Greylock Partners, Menlo Ventures, Insight Partners, and CrowdStrike Falcon Fund.

• Placer.ai, a location analytics and foot traffic data platform, raised $75 million in new funding at a $1.45 billion valuation from WndrCo, MMC Technology Ventures, Fifth Wall Ventures, and Array Ventures.

• Riverlane, a quantum error correction startup, raised $75 million in Series C funding led by Planet First Partners, with participation from ETF Partners, EDBI, Cambridge Innovation Capital, Amadeus Capital Partners, the UK's National Security Strategic Investment Fund, and Altair.

• Seeq, an industrial analytics startup, raised $50 million in Series D funding led by Sixth Street Growth, with participation from Insight Partners, Altira Group, Second Avenue Partners, and Saudi Aramco Energy Ventures.

• Mechanical Orchard, a developer of AI-enabled tooling to modernize legacy enterprise software systems, raised $50 million in Series B funding led by GV.

• KNIME, an open-source data science platform, raised $30 million in new funding from Invus.

• Andrena, a decentralized wireless internet provider, raised $18 million in extended Series A funding led by Dragonfly, with participation from CMT Digital, Castle Island Ventures, Wintermute Ventures, 6th Man Ventures, and ParaFi.

• Aurascape AI, an AI-native cybersecurity startup, raised $12.8 million in seed funding led by Mayfield Fund, with participation from Celesta Capital, StepStone Group, and AISpace.

• Hyperspace, a managed database provider for genAI applications, raised $9.5 million in seed funding led by MizMaa, with participation from JVP and toDay Ventures.

Fintech

• Zoth, a developer of DeFi yield infrastructure, raised $4 million in new funding from Taisu Ventures, G20, Fat Cat Ventures, GemHead Capital, Foundership Ventures, DCI Capital, Absolute Digital VC, Gydra Capital, and AstraX Capital.

Consumer & Media

• Oats Overnight, a high-protein oatmeal brand, raised $35 million in Series B funding led by Enlightened Hospitality Investments, with participation from Sonoma Brands Capital, Impatient Ventures, Singh Capital Partners, Morrison Seger Venture Capital Partners, and BFG Partners.

• Curio, an on-chain game developer, raised $5.7 million in seed funding co-led by Bain Capital Crypto and SevenX Ventures, with participation from OKX Ventures.

Healthcare

• Spineology, a developer of ultra-minimally invasive spine surgery systems, raised $25 million in Series AA funding led by SV Health Investors, with participation from 1315 Capital and RC Capital.

• Guidehealth, an AI-enabled healthcare services provider, raised $14 million in seed funding led by Memorial Hermann Health System.

• HouseAmp, a Seattle-based home-financing startup, raised $12.4 million in funding led by Third Prime and Fortress Private Equity.

Industrials, Greentech, & Other

• Muon Space, a satellite manufacturer and operator, raised $56.7 million in Series B funding led by Activate Capital, with participation from Acme Capital, Costanoa Ventures, Radical Ventures, and Congruent Ventures.

• Branch Energy, a retail-focused clean energy provider, raised $10.8 million in Series A funding led by Prelude Ventures, with participation from Zero Infinity Partners.

• Stonepeak raised $3.15 billion for its infrastructure-focused Stonepeak Opportunities Fund, beating a $2.5 billion target.

• TPG raised $580 million for its TPG Life Sciences Innovations Fund.

• Flint Capital raised $160 million for its third venture fund.

• Vista Equity Partners is winding down its Vista Public Strategies Fund, citing a "structural shift" in markets toward private assets.

Interested in partnering with Transacted? If you’re a financial services firm looking to connect with an engaged audience, please reach out.

Got a tip or an idea for a story? Email [email protected], or Tweet/DM @transactedInc