(Reuters) – When all else fails in litigation – as it pretty much has for Dov Charney, the ousted CEO of American Apparel – the last resort is to sue your own lawyers.
(Reuters) – Under ordinary circumstances, according to former Watergate investigator Richard Davis, it’s not a problem for a single law firm to represent private equity investors and their portfolio companies simultaneously. That makes sense: When the portfolio companies do well, their private equity owners make money. But there is an important exception. If a portfolio company becomes insolvent, its creditors – typically noteholders – take precedence over the private equity sponsors, who are equity holders. Law firms have to be very, very careful when insolvency looms, according to Davis, and they attempt to represent both the private equity interests and the interests of the subsidiary. If those interests diverge, the law firm is conflicted.
(Reuters) – A juxtaposition of events this week raises tantalizing questions about the course of shareholder litigation against Volkswagen in Europe.
(Reuters) – Remember Robert Crowe, the Nelson Mullins partner and pre-eminent Democratic lobbyist who was targeted in a Securities and Exchange Commission fraud suit in January? The SEC, as I reported at the time, claimed Crowe felt so much pressure to hold on to State Street as a client that he illicitly steered $20,000 in campaign contributions to an Ohio official who controlled a contract State Street wanted to be awarded. The SEC characterized the arrangement as a pay-to-play scheme, accusing Crowe of securities fraud and aiding and abetting State Street’s fraud.
By Alison Frankel and Jessica Dye
(Reuters) – A major defendant in the 100,000-case pelvic mesh litigation has subpoenaed the mid-sized Houston law firm AkinMears, as well as several smaller law firms and a company that sells personal-injury claims, seeking documents and testimony related to AkinMears’ acquisition last summer of the smaller firms’ mass torts practices.
(Reuters) – It’s been just about a year since the U.S. Supreme Court said in Omnicare v. Laborers District Council Construction Industry that securities issuers can be liable to investors even if their misstatements are couched as opinions. But in a ruling Friday in In re Sanofi, the 2nd U.S. Circuit Court of Appeals held that despite Omnicare, issuers don’t have to tell investors about important information that may contradict the opinions they are expressing.
Apple and the dozens of Apple supporters who filed amicus briefs Thursday in federal court in Riverside, California, have left little doubt that ultimately, the Supreme Court will be called upon to decide whether the government may rely on the 1789 All Writs Act to compel Apple to help investigators access data from the phone of San Bernardino shooter Syed Farook.
(Reuters) – It is no exaggeration to call the theft of $230 million from the Russian Treasury in 2007 a life and death matter. The money was stolen in a complex tax fraud that began with the alleged misappropriation of the corporate identities of three companies in the Russian portfolio of Hermitage Capital, a U.S. hedge fund. A Hermitage lawyer in Moscow who helped expose the fraud, Sergei Magnitsky, was arrested in 2008, detained for nearly a year and ultimately died in custody at the age of 37. Russian authorities later charged Magnitsky posthumously. Hermitage’s American founder, William Browder, was convicted in absentia by Russian courts and faces the possibility of additional charges.
(Reuters) – U.S. Magistrate Judge James Orenstein of Brooklyn does not have the power to bind other courts. The 50-page opinion he issued Monday, denying the Justice Department’s application for an order under the All Writs Act to compel Apple to help the government unlock the phone of a convicted drug dealer, will not end the California federal-court showdown between Apple and the Justice Department over an iPhone belonging to San Bernardino shooter Syed Farook. Judge Orenstein’s decision isn’t even the last word in the Brooklyn case – the Justice Department told Reuters Monday that it will ask for the order to be overturned by a district court judge.