Skadden Advises Intel On Trump Deal, Because What Are A Few Obvious Conflicts Among Friends? - Above the Law

"It's reportedly a common stock deal that binds the federal government to vote with the board unless the board is voting to undermine the deal itself. The deal is a payoff for the CHIPS Act, a $280 billion funding authorization to boost the domestic semiconductor industry. The Biden administration pushed for the funding, Trump pushed for the vig. Theoretically, the equity stake belongs to the government and not Trump personally, but we thought that about Air Qatari One too."

"The company needed lawyers to protect its interests in making such a consequential deal, so it turned to... a law firm that agreed to give Trump $100 million in free gifts in exchange for settling an attack on their ability to stay in business. It's the sort of fact pattern a professional responsibility professor couldn't put on an exam or they'd be laughed out of the academy: a sophisticated client, a well-heeled firm, and a high-stakes extortion effort."

"The federal government took an ownership stake in GM in exchange for its bailout during the Obama administration. As a consequence, when the manufacturer came back, taxpayers were much better off than when they went in. For all the scare-mongering over socialism, the American economic system already rests on capitalistic gains and socialized losses. Taking an equity stake lets the taxpayers in on the gains too."

Intel agreed to give the federal government roughly a 10 percent ownership stake via common stock tied to CHIPS Act support, with voting bound to the board except when the board would undermine the deal. The CHIPS Act authorizes $280 billion to boost domestic semiconductors. The transaction drew scrutiny because of links between political pressure and financial concessions, including a law firm reportedly agreeing to give Trump $100 million in exchange for settling an attack on its business. Historical precedent with the GM bailout shows equity stakes can let taxpayers share gains and mitigate pure subsidy outcomes.

Read at Above the Law