June in Houston. Muggy. Pushing 90 degrees.
Pretty much par for the course for the attorneys accompanying Vinson & Elkins trial legend Harry Reasoner to court that morning in 1996.
Among the group was a summer associate who never looked back.
“Walking into the courthouse blew me away," Michael Holmes recalls of the moment he decided to become a trial lawyer. “I thought, ‘I like the way this feels.’ And I got hooked.”
Their client faced an uphill battle with long odds, but the challenges facing the team of lawyers that day was something that excited Holmes. He knew that being a trial lawyer was what he was meant to be.
Holmes joined the firm the next year following his graduation from University of Texas Law School and forged his own path as a trial lawyer – getting on his feet in Justice of the Peace outposts in rural Texas and working round the clock on savings and loan litigation in Washington, D.C. before going on to command his own trial teams in Houston, Dallas, New York and Delaware’s Chancery Court. He’s made a name for himself as a lawyer who wins the biggest cases – often against the odds. Whether helping Energy Transfer LP escape a bad $37B merger or enforcing Hexion’s $10.6B acquisition of his client, Huntsman, his teams find ways to win.
He was inspired to become a lawyer by his father, who grew up in a cotton farming family in Lubbock, Texas, and went to law school later in life. Holmes figures his fate was sealed as he was born during his father’s law school enrollment. His father had gone on to be a dealmaker, so Holmes had been thinking corporate before that pivotal summer.
“I famously once said when someone was trying to recruit me to Vinson & Elkins as a first year that I would never work for a big firm,” says the Dallas-based Holmes, who is co-head of the Complex Commercial Litigation practice and Vice-Chair Elect of the firm. “So I’m 0 for 2, because I also thought I’d be a dealmaker.”
Noted Vinson & Ekins trial lawyer, Charles ‘Tippy’ Newton led the firm’s recruiting from UT and was very persuasive to Holmes. “I feel so fortunate at the intersection of when I got to the firm and the partners I got to work for. They were great lawyers and they took an interest in my life and me as a human,” he says.
Not too long after he passed the bar, a partner walked into his office and asked if he was ready for his very own first trial. “He said there wasn’t much in controversy, and I said ‘I don’t care’,” and after figuring out how to get to Atlanta, Texas, Holmes found his way to a Justice of the Peace Court.
His client was an upstart credit card company, Capital One, intent on establishing a reputation for enforcing debt. It was being sued by two cardholders representing themselves and disputing how much they owed.
“I ended up handling a lot of Capital One cases in the state of Texas,” Holmes recalls. “Sometimes they were settled, sometimes they were tried. I learned a lot from that.”
He also spent a few months that fall in Washington, D.C., as the junior member of the team representing Bank United suing the federal government in the court of federal claims challenging capital requirements that limited how much money it could make.
“People would ask if I was on the night team, and I’d be like ‘morning, noon, night,’ but I loved all of it,” Holmes said. What he especially loved was being part of a large team and watching the adversarial process.
“By and large, people don't want to end up in litigation, but when they do and they have a dispute, I think the process that we have is a really good one,” he says. “Watching that from the very beginning to put together the puzzle from all the pieces and the amount of work that goes into it, I'm just very thrilled by that process.”
Vinson & Elkins is and was home of one of the great stable of trial lawyers in the United States, and Holmes learned from Reasoner as well as David Harvin, Walter Stuart, Max Hendrick, John Murchison and many others. “One of them told me, ‘You’re going to perfect your craft by training, watching and doing,’” Holmes recalls.
He handled the Bank United case with Stuart, whose lessons mirror what his peers see as trademark Holmes. “We had a situation as often happens in litigation, where it’s somewhat like a basketball game. Each side’s going to score points and there’s going to be some fouls,” he recalls. “And the way Walter approached the situation was calm, cool and collected and I remember thinking as an associate how important that was. Irrespective to what he was actually feeling, to project the sense of calm and ‘Hey, we got this. Don’t worry about it.’”
Through a decade of intense courtroom work, he also came to appreciate the paradox that while few cases go to trial, it’s the most difficult ones that do. And where they are most often litigated is in Delaware, which has become a sweet spot for Holmes and can be a bit of a Bermuda Triangle for his adversaries.
His opponents are impressed by Holmes’ uncanny ability to win. Bernstein Litowitz trial ace Mark Lebovitch says Holmes is odd-defying. “As trial lawyers, we accept that we will win some and we will lose some. Of course winning is always better. And I have to tip my hat to Michael, since he finds a way to win cases that I thought he’d surely lose.”
Holmes’ first significant experience in Delaware came in 2008 as a junior partner representing Huntsman seeking to enforce its $10.6B merger agreement with Hexion, which had agreed to buy Huntsman in 2007 but reconsidered after it reported disappointing earnings.
The backdrop was the financial crisis taking hold in U.S. markets that summer as Hexion obtained an assessment from valuation firm Duff & Phelps concluding the combined company would be insolvent; it claimed its lenders were unlikely to finance the transaction. Hexion sued Huntsman in Chancery Court, seeking a judgment that it didn’t have to complete the merger because of the likely insolvency, and seeking to limit its liabilities to a $325 million termination fee.
The case went to trial just three months later, in September 2008. “In between,” Holmes recalls, “we took 70-some odd depositions. There were millions of documents exchanged. “It was definitely an effort that needed to be orchestrated, and to watch their orchestration of it and how they collapsed what would otherwise have been 12 months of litigation effort into three months, organized and devised a plan, will always stick out in my mind.”
Thirteen years later, Holmes still remembers getting the call while in Florida on a family vacation.
“I had been fishing with my son who, at that point, was nine or 10, and I didn’t have cell service on the boat,” he says. “When I got off the boat, it was one of those situations where my Blackberry just wouldn’t stop loading.”
Huntsman countersued, claiming Hexion, controlled by Apollo Management and represented by Wachtell Lipton, was required to complete the deal. Hexion was contractually obligated to fulfill a number of requirements to obtain a solvency opinion, and had failed to do so, the V&E team claimed.
The trial lasted six days before Chancellor Stephen Lamb, who in mere days ruled in Huntsman’s favor. He rejected Hexion’s argument that “it can be excused from performing its freely undertaken contractual obligations simply because its board of directors concluded that the performance of those contractual obligations risked insolvency.”
Instead, wrote Lamb, “it was the duty of the buyer’s board of directors to explore the many available options for mitigating the risk of insolvency while causing the buyer to perform its contractual obligations in good faith. If, at closing, and despite the buyer’s best efforts, financing had not been available, the buyer could then have stood on its contract rights and faced no more than the contractually stipulated damages.”
The swiftness with which Lamb delivered his opinion typifies Chancery Court. “One of the things that always amazes me is that you get these opinions that synthesize a tremendous amount of evidence and testimony in short order,” Holmes says.
Vinson & Elkins’ success in the case, combined with the rise in formation of Master Limited Partnerships, created a groundswell of Delaware cases that made their way to V&E and Holmes.
Among them was a suit related to the merger between C&J Energy Services and Nabors Red Lion Ltd., a subsidiary of Nabors Industries, in which Chief Justice Leo Strine of the Delaware Supreme Court further delineated the responsibilities of corporate boards under Revlon v. MacAndrews & Forbes Holdings. That 1986 ruling determined that once the takeover of a company appeared inevitable - wanted or not - the board’s duties toward shareholders narrowed to obtaining the best price possible.
While Strine’s opinion didn’t alter boards’ Revlon duties, it elaborated upon them, pulling together varied elements of case law “about what Revlon does and doesn’t actually require,” Holmes says. “It synthesizes all of those components of what the Revlon obligation is when you’re a director and you’ve made the decision that you might be interested in the sale of control.”
Holmes and his team have had several Delaware trials over the past few years, and have amassed an impressive track-record against some of the biggest and best law firms. Perhaps none bigger than Williams v. Energy Transfer Equity, in which Holmes’s team pulled a Godzilla-sized rabbit out of their hat to prevent the closing of a $37 billion merger that had a fatal tax flaw. Like Huntsman, that case was tried on a highly-expedited schedule, with a two-day trial taking place a little more than a month after the case was filed. “Perhaps I’m a glutton for work, but expedited litigation is something I love and something our team excels at.” Energy Transfer General Counsel Tom Mason met Holmes at Vinson & Elkins not long after he joined the firm. Mason realized then, “I would want Michael on my team in about any circumstance as he was clearly smart and very competitive.”
He’s tapped Holmes to represent Energy Transfer in many matters, including the epic battle that killed the Williams deal. He was impressed how Holmes surrounds himself with other talented Vinson & Elkins lawyers, and spends “day and night thinking about the case, developing strategy with input from his team and executing the strategy with determination and hard work,” says Mason.
Noted trial lawyer Chris Duffy joined Vinson & Elkins from Boies Schiller in March 2020, and Holmes was a big reason. “He is an excellent lawyer on his feet with really extremely broad command of fiduciary duty issues and corporate governance issues and just general business litigation issues. I can’t think of anyone who’s at Michael’s level in that realm,” he says, noting the importance of Texas in this equation.
Texas has produced some of the best trial lawyers ever, and according to Mason that’s due to the amazing collection of high-quality businesses in Texas across multiple industries, including energy, telecommunications, insurance, banking, airlines, real estate and finance that have sophisticated legal needs and therefore the need to hire attorneys with the same degree of talent as attorneys from the elite law firms of New York.
“However, Texans being Texans, many of these companies preferred Texas attorneys who they could relate to in a way that New York attorneys may not,” says Mason.
The life of a top trial lawyer can be kaleidoscopic, pulled between the constant whittling required to prepare for and win complex business battles and the grand envisioning necessary to surmount global law firm competition.
Three years ago, Holmes became involved in strategy for Vinson & Elkins’ complex commercial litigation practice and in January, was named its co-head. In January 2021, he will become one of four members of an executive committee leading the firm, holding the title of vice chair alongside chair-elect, Keith Fullenweider; vice chair-elect Hilary Preston, who’s based in Austin and New York and specializes in tech, intellectual property and sports law; and vice chair-elect Jim Fox, a transactional lawyer based in New York.
It’s a new structure for Vinson & Elkins, which has been led by Chairman Mark Kelly and Managing Partner Scott Wulfe for the past 10 years and a single managing partner, Joe Dilg, in the decade before that.
“It’s exciting,” Holmes says. “It’s an incredible responsibility that I look forward to; I look forward to paying back everything, everyone who supported me.”
Holmes hopes to continue the deep bonds, mentorship and sense of purpose he was given by Vinson & Elkins litigators. “Getting the opportunity to watch all of my mentors and other people I worked with in different hearings or trials or, honestly, just on a phone call with a client, has been invaluable,” he says, “And I have been so fortunate that I have had really incredible lawyers come to work for us over the years. We have an incredible team.”
As the Vinson & Elkins team channels that enthusiasm into growth and expansion in the coming decade, one of its most rewarding opportunities may be in its historic sweet spot of litigation.
“One of the things we’ve realized is that in litigation, when our perception in the market is compared to reality, the reality is far higher,” he says. “There are some firms where the reality is not as high as the perception. That’s on us, but it’s a tremendous opportunity that we have.”
Vinson & Elkins has a well-established footprint in energy, but also handles a large number of arbitrations and trials in other industries. Currently, Holmes and his team are representing The Coca-Cola Company in a $100+ million tortious interference matter.
“What I’m looking forward to is making sure that we get the credit for that,” Holmes adds. “It's not just that we've handled them; we've been blessed to have this really - knock on wood - amazing run of victories.”
While the firm is pleased with its accomplishments in Texas, where it sees additional growth opportunities, “I think we’ll also be focused on New York, the West Coast, D.C. and London,” Holmes says.
No matter the locale, Holmes is well aware that the firm’s edge rests in collaboration and respect for the lessons passed down since the firm was established more than 100 years ago.
That’s probably why when Holmes asked Reasoner to help him out on the Energy Transfer case in idyllic Georgetown, Del.’s historic courthouse, he was on the first plane.
“We had a pretrial brief due on Sunday for a trial that started Monday,” Holmes says. “And Harry in his 50 some odd year of law practice was up at 3 a.m. going through a page flip with the associates.”
“We love what we do and we like working together as a team,” says Holmes.