Trace Schmeltz is a partner in the Chicago and Washington, D.C., offices of Barnes & Thornburg LLP, where he is the co-chair of the firm’s Financial, Corporate Governance, and M&A Litigation Group and a member of the White Collar Crime Defense Practice Group. A trial attorney with experience in numerous forums including the Delaware Court of Chancery, he concentrates his practice on securities, commodities, mergers and acquisitions and white collar criminal litigation. In addition, he has pursued and defended claims on behalf of auditors, investment banks, corporate boards and corporations.
Mr. Schmeltz has served a variety of clients, including Fortune 500 companies, ranging from financial institutions, hedge funds and commodity trading advisors to communications firms and accounting firms.
Mr. Schmeltz was selected as an "Illinois Super Lawyer" in the 2013 edition of Illinois Super Lawyers®
for his work in Securities Litigation and Civil Litigation Defense. He serves as appointed vice chair of the Securities Litigation Committee for the American Bar Association.
Mr. Schmeltz’s relevant experience includes: Securities Fraud Class Actions and Shareholder Derivative Suits
Mr. Schmeltz has counseled clients in their successful defense of securities fraud class actions and shareholder derivative suits, including Fortune 500 companies, so-called Chinese reverse merger companies, and the officers, directors and auditors of such companies.
Mr. Schmeltz's experience includes securities litigation involving options, synthetics, auction rate securities, alleged accounting improprieties, missed projections, restatements, allegations of fraudulent business models, and the failure to meet Wall Street's expectations. He also has represented auditors with primary violation and aiding and abetting claims. Investigations and Enforcement Actions
Mr. Schmeltz has been involved in formal and informal investigations by the Securities and Exchange Commission, the Department of Labor, the United States Postal Service, the Internal Revenue Service, the United States Senate, the United States House of Representatives, the Federal Bureau of Investigations, the Chicago Board Options Exchange, the National Futures Association, the Commodity Futures Trading Commission and FINRA. He has represented individuals, hedge funds, brokers, chief compliance officers, directors, officers, and Fortune 100 companies in such investigations and related enforcement actions.
One example of the work Mr. Schmeltz has done in this area was his day-to-day responsibility for managing over 50 government investigations at Enron Corp., after its collapse. His work included responding to subpoenas, factual development, witness interviews, providing advice to business units as to how to respond to government inquiries, and coordinating the company’s efforts to cooperate with the Department of Justice and the Federal Bureau of Investigations.
In addition, Mr. Schmeltz has worked with the Securities and Exchange Commission and the United States Attorney’s Office for the Southern District of New York to investigate and identify individuals who should be targeted for prosecution or enforcement actions. Mr. Schmeltz performed this work on behalf of a court-appointed receiver in a case involving a private equity real estate firm that was operated as a Ponzi-like scheme. Mr. Schmeltz’s efforts included factual development and analysis, deposing individuals with the SEC, and pursuing affirmative claims for the receiver.
Finally, Mr. Schmeltz has helped companies ensure compliance with the Foreign Corrupt Practices Act, including assisting them in investigating possible violations and successfully formulating strategy for avoiding liability with either the Department of Justice or the Securities and Exchange Commission. Mergers and Acquisitions Litigation
Mr. Schmeltz has participated in all aspects of M&A litigation, including lawsuits to enjoin and enforce mergers, litigation and regulatory work related to hostile takeovers, and post-closing merger disputes. As a part of his litigation consulting work, Mr. Schmeltz has assisted in drafting proxy statements and deal documents, as well.
These cases include such significant matters as IBP, inc. v. Tyson Foods, Inc., one of the seminal cases considering the impact of an alleged material adverse change on a company’s obligation to close a merger. In addition, Mr. Schmeltz was the lead day-to-day lawyer for The Finish Line, Inc. in UBS Securities LLC and UBS Loan Finance LLC v. The Finish Line, Inc. and Genesco Inc. In that case, The Finish Line was able to successfully terminate its merger agreement with Genesco, Inc. on favorable terms. Finish Line’s stock price rose 52 percent on the announcement of the deal’s termination. The news media widely covered the case, including in The New York Times' popular DealBook blog, which called Finish Line's legal theories in the case 'a clever piece of work.' Finally, Mr. Schmeltz has been the lead trial lawyer in post-closing disputes, including indemnification and working capital disputes. Bankruptcies and Receiverships
Mr. Schmeltz has handled complex litigation, investigations, claims management, and debtor and creditor representation arising from bankruptcies and receiverships. For instance, he managed the investigation into the collapse of Wextrust Capital and its affiliates, including Wextrust Commodity Managers, LLC, and handled litigation relating to the claims process in the resulting receivership. He also has prosecuted and defended fraudulent transfer claims arising out of the bankruptcies of such companies as Global Crossing and Washington Group.
Mr. Schmeltz is admitted to practice in Illinois, Kansas and Missouri. Mr. Schmeltz also is admitted to practice before the U.S. Supreme Court and the U.S. District Court for the Northern District of Illinois, Trial Bar.
He earned a B.A. from Principia College in 1992. In 1997, he earned a law degree from the University of Kansas School of Law, where he was a member of the University of Kansas Law Review.