The longstanding association between Holland & Knight and
JetBlue, which recently paid a $69 million termination fee to
A source at Holland & Knight verified that the work the firm has done for JetBlue has been “declining year-over-year” for at least 10 years, so much so that it no longer merits a standard potential conflict of interest disclosure. A spokesman for the airline confirmed it remains a Holland & Knight client. Both parties claim they have crafted protocols to avoid conflicts.
Publicly traded companies in the US must detail certain “related party” transactions, such as if a vendor or business partner is related to a company’s board member or a senior executive, according to securities rules. Companies and their boards also enjoy some latitude in what they consider “material” information that must be disclosed to shareholders.
JetBlue first began disclosing what it paid Holland & Knight in fiscal 2018, the first year in which Geraghty was listed as one of its six highest-paid executives. JetBlue’s most recent proxy statement filed March 22 did not include what Holland & Knight received from it in legal fees during fiscal 2023.
From 2018 to 2022, Holland & Knight’s JetBlue work ranged from between .0025% to .18% of its annual revenue, billables that roughly add up to several million dollars. Holland & Knight’s gross revenue broke the $1 billion mark in 2020 and last year neared $2 billion, per reporting by The American Lawyer.
Securities regulations provide some disclosure exceptions, such as if the payments by a public reporting company do not exceed 5% of an external vendor’s gross revenue. JetBlue stated in past proxy filings that it voluntarily chose to disclose its ties to Holland & Knight.
In its 2022 proxy, JetBlue stated that Geraghty—then its president and chief operating officer—is married to a Holland & Knight partner. Multiple lawyers at Holland & Knight, including Geraghty’s husband, litigation section leader Christopher Kelly, have performed “various legal services for many years,” JetBlue said. The New York-based company said its relationship with Holland & Knight predated Geraghty coming aboard in 2005.
JetBlue said in its 2022 proxy that “Geraghty’s spouse did not have a material interest” in Holland & Knight’s relationship with JetBlue as “he was no longer involved in providing or supervising services” that the firm did for the airline.
Kelly also didn’t receive direct compensation from fees paid by JetBlue to Holland & Knight in recent years, according to disclosures by the airline.
New Flight Path
Geraghty, who began her legal career in the 1990s as an associate at aviation-focused Condon & Forsyth, spent nearly four years as a partner at Holland & Knight prior to joining JetBlue. She moved into JetBlue’s top leadership role last month.
Under JetBlue’s related persons transactions policy, the audit committee of its board reviewed its relationship with Holland & Knight. The company’s guidelines also require that its general counsel Brandon Nelson “review and pre-approve any engagement” of the firm for legal services.
Holland & Knight had a role on more than 20% of cases involving JetBlue in US federal courts since 2007, according to Bloomberg Law data. Kelly and others represented the company in disputes with passengers and labor-related affairs. Within the last decade, however, Holland & Knight’s work for JetBlue has tapered off as Geraghty’s duties expanded. Bloomberg Law records show that the firm’s handled only two federal court cases for JetBlue in the past five years.
Holland & Knight didn’t advise on JetBlue’s ill-fated bid to buy Spirit Airlines, which saw Shearman & Sterling take the lead on transactional and regulatory matters for the would-be acquirer. A federal court sided with the Justice Department in January by blocking the deal on antitrust grounds, and JetBlue abandoned its takeover efforts earlier this month.
Despite that turn of events, JetBlue’s five top executives saw their pay packages rise in 2023. Geraghty, who initially joined JetBlue as a director of litigation and regulatory and went on to hold key human resources and customer experience roles, earned almost $9 million in total compensation last year.
Geraghty’s remuneration was enhanced by a special equity award that requires her to remain with the airline through June 2026. She received it as part of the company’s long-term leadership succession plan and to cover a period in which it sought to integrate Spirit Airlines, according to JetBlue’s most recent proxy.
Nelson, who was promoted in late 2018 to take over from JetBlue’s former legal chief, saw his total compensation nearly quadruple last year to more than $4.9 million, up from a little over $1 million in 2022.
