Jenkens & Gilchrist
From Wikipedia, the free encyclopedia
Jenkens & Gilchrist, P.C. was a Dallas-based law firm. It was founded in 1951 as Jenkens & Bowens to service the various businesses controlled by Clint Murchison, Jr.. Another early client was the Dallas Morning News. Due to the extent of the Murchison family holdings, the firm soon developed expertise in corporate transactions.
In the 1980s, the firm faced liability and financial difficulties caused by its involvement in the Savings and Loan Crisis. Jenkens settled a number of malpractice lawsuits in 1987 for $18 million. In the 1990s, Jenkens embarked a period of intense growth, adding offices outside of Texas for the first time to expand from a regional into a national law firm.
The opening of a Chicago office with a team of tax attorneys from Altheimer & Gray in 1998 was the most fateful for the firm.[1] In 2000, the firm merged with Parker Chapin to launch in New York City. By 2001, the firm employed more than 600 attorneys and had reached its peak in size. In 2004, the firm advised Fossil, Inc. in its $173 million secondary securities offering managed jointly by J.P. Morgan, Jefferies & Company and CIBC World Markets.
[edit] Demise of the firm
Jenkens & Gilchrist's Chicago office began a lucrative practice of offering tax shelter advice to a variety of corporate and individual clients. This scheme involved writing opinion letters that the tax schemes were compliant with the tax code. The tax group in Chicago received some $267 million dollars in the period of 1998-2003. The group worked in coordination with tax advisers at Ernst & Young. The Internal Revenue Service began investigating Ernst & Young and several tax payers in 2002. Eventually it opened audits to many Jenkens' clients, who responded by filing malpractice lawsuits against the firm. In 2003, the IRS itself sued Jenkens & Gilchrist and amid the crushing potential liability of the lawsuits, the firm began to unravel.[2]
As negotiations about settling with the government and other plaintiffs dragged on, partners with portable business began to depart. In 2005, the 90-attorney New York City office from legacy Parker Chapin defected to Troutman Sanders LLP. In 2007, the Los Angeles office decamped to Baker & Hostetler. The remaining partners in the Chicago office switched to Nixon Peabody.
Finally, the firm agreed to settle its liabilities with the IRS and pay a $76 million fine, and agree to cease the practice of law effective March 31, 2007.
Some 100 attorneys in Dallas, Austin and Houston found a new home at Hunton & Williams. The San Antonio office moved to Texas firm Winstead, P.C..
