By John Ryan | September 30, 2019 | Lawyer Limelights, Bernstein Litowitz Features
Photo by Jay Gunning / Owl Bridge Media.
The most elite law firms stay on top by always getting better, and part of that process over the past decade for Bernstein Litowitz Berger & Grossmann has been strengthening the European side of its shareholder practice. That effort is led by Jeroen van Kwawegen, who also is co-head of the firmâ€™s Department of Governance that focuses on the conduct of boards and senior executives. Van Kwawegen was a natural choice to guide the European practice: He was born in the Netherlands and practiced in Amsterdam before joining Latham & Watkins in New York. Though he had earlier wanted to work as a prosecutor, his move to Bernstein Litowitz 10 years ago has enabled him to litigate for the public good on behalf of wronged shareholders in the U.S. and abroad.
Lawdragon: Letâ€™s start by discussing your current work. Can you describe your role within the firm and the types of matters you tend to focus on?
Jeroen van Kwawegen: As the co-head of our Department of Governance, I oversee all active litigation matters involving breaches of fiduciary duty by directors and executives, including in connection with mergers and acquisitions, shareholder voting rights and shareholder activism, and board oversight. I regularly represent shareholders in courts across the country with a track record of success.Â For example, last year, I led a trial that resulted in a $282 million judgment and with one of my other cases realized the largest class recovery in Delaware for the year. Â As the head of our European client practice, I also advise the firmsâ€™ institutional investor clients in Europe on all matters involving shareholder litigation, including securities litigation.
LD: Within your substantive focus areas, can you identify any trends or issues that are taking up more of your time these days?
JVK: Within the governance area, there has been a noticeable retreat of the courtsâ€™ scrutiny of executive and board conduct in connection with third-party transactions. This is true for fiduciary conduct in third-party mergers and in post-transaction valuation matters like appraisals. As a result, corporate fiduciaries are now subject to less judicial scrutiny and accountability, and corporate advisors have fewer tools to act as gatekeepers and rein in executives who contemplate abusing their fiduciary positions for personal gain. This judicial retreat is facilitating a transfer of wealth from shareholders to disloyal executives and directors.
Despite the judicial headwinds, I love my practice, including going to court and interacting with judges, clients â€“ including funds, banks, asset managers, merger arbs, hedge funds, etc. â€“ and opposing counsel on a variety of securities class actions and governance cases. The law is challenging, but our cases typically involve egregious disloyalty and corporate misconduct, and I believe deeply in the importance of this work. So we will continue to advocate for a rebalancing of the law.
Indeed, we have opened an office in Wilmington, Delaware, and I am proud to say that one of the leading corporate litigators in Delaware, Greg Varallo, has joined the firm to head that office and is now one of my partners. It is critical that Delawareâ€™s expert judiciary continues to hear more from shareholder lawyers because the pendulum of Delaware law has swung too far from the protection of basic shareholder rights, including with respect to the extent to which shareholder approval of a merger immunizes disloyal conduct, the judicial invention of a so-called â€śpassive market check,â€ť and the elimination of most shareholder appraisal rights without a legislative mandate.Â Not engaging with courts on these critical issues would be a disservice to our institutional shareholder clients and the corporations they own.
LD: How about the European angle â€“ please discuss the firmâ€™s evolution in terms of representing those types of institutional clients. How much of a focus is this?
JVK: Our firm operates on non-negotiable core values, including professional excellence, high ethical standards, and maintaining our and our clientsâ€™ reputations with courts, adversaries, and peers. Because of these values, our firm benefited from the passage of the Private Securities Litigation Reform ActÂ (PSLRA) in 1995, which encouraged institutional investors to retain professional counsel to lead securities class actions. BLB&G quickly became one of the few go-to firms for U.S. institutional investors.
After I joined BLB&G and became a litigation partner, the firm asked me to lead our efforts to expand our advice to European institutions while maintaining my case load. Although we were playing catch-up to some early movers, we had a strong foundation and reputation, and we made a long-term commitment to our European clients. We have been very successful. In my experience, all institutional investors understand and value the importance of such a relationship. It was also helpful that I was born and raised in the Netherlands and practiced as a commercial litigator in Amsterdam before obtaining a J.D. at Columbia Law School and then building my career as a U.S. litigator in New York. Meanwhile, the effects of the financial crisis, corporate scandals at Volkswagen and the Royal Bank of Scotland, and the rising importance of environmental, social and governance (â€śESGâ€ť) principles as part of shareholder mission statements, encouraged European institutional investors to become more active in overseeing litigation.
LD: What sparked your interest in becoming a lawyer? Once you became interested, what did you expect to be doing with your career?
JVK: I started working in the tulip fields at age 14 for $1 an hour and was the first person in my family to go to college and law school. I went to law school to become a criminal prosecutor. At the time, I was an instructor with the Dutch military police as part of my mandatory military service and I was committed to making the world a little safer and more just. While I was in law school, I had an opportunity to participate in an exchange program with Columbia Law School. This experience broadened my horizons, introduced me to the Socratic method and the active encouragement of critical thinking in American law schools, and allowed me to begin to consider a different, more adventurous life outside the Netherlands.Â As a prosecutor, I would be bound to the Netherlands.
To keep my options open for a different life, I began my training at a respected law firm in Amsterdam. I still have fond memories of my professional mentor, Diederik de Groot, who routinely had me over for dinner with his family while teaching me essential skills and preparing me for my first arguments.Â I later had a similar experience with the Hon. Huub Willems â€“ the former Chairman of the Enterprise Chamber of the Amsterdam Court of Appeals who oversaw proceedings concerning the takeover of ABN AMRO by Barclays, RBS, Santander and Fortis. He, too, became a close friend and trusted mentor.
LD: After you were already practicing in Amsterdam, why did you want to come to America to get your JD? What was your career plan at that point?
JVK: My desire to make the world a little safer and more just had not lessened when I returned to New York, so I inquired with the U.S. Attorneysâ€™ Office in the Southern District of New York as to whether Dutch citizens could join. The necessary security clearance made this impossible. Truth be told, student loans would have made this impossible, too. During law school, I could not work on my student visa and only had enough money for two meals a day.
After law school, I joined Latham & Watkins and quickly paid off my loans. I was fortunate to find Blair Connelly and Peter Rosen â€“ two litigation partners at L&W who took an interest in me and taught me the basics of being a U.S. litigator. In one of the matters that had the most impact on me, we represented the Westfield Group (the lessee of the shopping mall at the World Trade Center) against numerous insurance carriers who improperly denied coverage and held up payments under the policies after the 9/11 terrorist attacks. In these matters, we acted on behalf of a wronged plaintiff against corporate actors who acted in bad faith, laying the foundation for my move to BLB&G.
LD: What are some unique characteristics about BLB&G that you appreciate and have helped you to be successful? What do you feel is critical to the firmâ€™s continued success?
JVK: The combination of the firmâ€™s core values, our nimble and entrepreneurial culture, and the respect we have for everyone in the organization is unique among law firms and has allowed me to be successful. Our firmâ€™s reputation and the commitment of many people at BLB&G who supported me over the years have helped me seize new opportunities while developing my skills and practice, including by advocating for me to do important arguments and to take important depositions, and to be entrepreneurial in developing the European client practice.
I am very proud to be a part of our firm and culture. I am also proud that courts, peers, adversaries, and industry observers have recognized my work, and that I am the only European shareholder litigator on Lawdragonâ€™s prestigious list of the â€ś500 Leading Lawyers in America.â€ťÂ But I would not have received this recognition without the support of all the professionals throughout my firm who care first and foremost about our clients and the mission.Â I stand on the shoulders of many mentors and see it as my role at BLB&G to be a mentor and carry many future mentors on mine. I believe commitment to our people and their growth and success is critical to our culture and continued collective success.