Litigation Wrap - Hughes Hubbard and Reed

Litigation Wrap
First Quarter
2015
Hughes Hubbard & Reed LLP
One Battery Park Plaza | New York, New York 10004-1482 | 212-837-6000
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1Q2015 Developments
$2.2B Lehman Distribution
On Feb. 19, Lehman Trustee Jim Giddens
announced a second distribution to
unsecured general creditors of the
former brokerage. With distributions that
began at the end of March, creditors will
achieve an approximately 27% payout
on their allowed claims. Giddens’ team,
led by Jim Kobak and Chris Kiplok, also
included Jason Benton on this matter.
Portigon High Court Win
Hughes Hubbard was victorious for
the third time in a $500 million fraud
case against a banking client involving
mortgage-backed securities and the
collapse of structured investment
vehicles when New York’s Court of
Appeals denied plaintiffs’ motion
for leave to appeal dismissal of the
plaintiffs’ complaint. New York’s
Appellate Division had previously
unanimously affirmed dismissal of the
case by the New York Supreme Court.
Chris Paparella led the defense team with
Marc Weinstein and Savvas Foukas.
Tobacco Settlement
HHR advised Lorillard in the first major
agreement reached by the nation’s three
largest tobacco companies to settle
Engle progeny lawsuits filed in Florida. If
all plaintiffs sign on, the deal will resolve
the more than 400 individual cases
that remain. Lorillard’s share of the
settlement amount is $15 million. Ted
Mayer led negotiations with assistance
from Charlie Cohen and Shep DiCesare.
Firm To Help FDIC in Doral Litigation
Hughes Hubbard is assisting with the
closure of Doral Bank, whose holding
company entered bankruptcy in New
York on March 12. First hired to sell the
bank’s assets, the firm has also been
retained for insolvency litigations in both
New York and Miami. The litigation team
is led by Scott Christensen, Aviva Wernick,
Chris Kiplok, and Jason Benton.
J M Smith Appellate Win
George Tsougarakis secured a second
victory for J M Smith Corp. when he
persuaded a Fourth Circuit panel on
March 13 to uphold a lower court’s
ruling that the drug distributor’s insurer,
Liberty Mutual, had a duty to defend it
in an action brought by West Virginia’s
attorney general involving alleged
participation in a “pill mill” scheme.
Sexual Harassment Dismissal
On Feb. 26, Ned Bassen won summary
judgment for Portigon and one of its
employees in a sexual harassment suit
involving a Euro Lloyd travel agent who
worked on-site at Portigon. Bassen
argued that Portigon was not her
employer, so could not be liable for
harassment under New York state or city
laws.
Work Product Protected
On Feb. 9, HHR won a significant
achievement for MF Global trustee Jim
Giddens when a U.S. magistrate rejected
an attempt by the defendants in the
multidistrict litigation against former
officers and directors of MF Global to
obtain the work product created by the
Trustee’s accounting professionals.
The Trustee’s brief was prepared by Jeff
Coleman.
Successful World Bank Settlement
Kevin Abikoff led a team in the
negotiation and completion of Alstom’s
three-year settlement with the World
Bank. On Feb. 21, the World Bank
concluded that Alstom had met its
obligations and several Alstom entities
were able to resume competing for
World Bank Group-financed projects.
The company was also spared a DOJimposed compliance monitor because
the DOJ recognized the work already
done by Alstom under the World Bankimposed monitorship. This allowed
Alstom to self-report to the DOJ on
compliance and remediation.
MGA’s $429M Fraud Suit Dismissed
Rita Haeusler won a long-standing legal
battle with MGA Entertainment Inc. on
Jan. 29, when a California U.S. district
judge dismissed the Bratz doll maker’s
$429 million fraud action in which our
client Société Générale was a defendant
along with other banks. MGA alleged the
banks had caused its failed investment
in the French toy maker Smoby S.A.
Summary Judgment Win
On March 6, a New Jersey Superior
Court judge granted summary judgment
to the New York Blood Center in a
suit alleging that the Blood Center
negligently caused the plaintiff’s death
by failing to provide plasmapheresis
services in a timely manner. The trial
court agreed with HHR that plaintiff
had not established a deviation
from an accepted standard of care
in the industry. Charlie Cohen argued
successfully for the Blood Center, with
Will Coronato and Bill Beausoleil also on
the brief.
Lorillard Win in Indiana
On Jan. 8 Jim Berger and Elizabeth Raines
won summary judgment for Lorillard
and Hollingsworth & Vose, the makers
of Kent cigarettes and their original
filter material, when an Indiana Superior
Court judge granted HHR’s motion for
summary judgment on plaintiff’s claims
for damages and demand for a jury trial.
Fresenius Medical Care Win
David Stern scored a victory for
Fresenius Medical Care on Feb. 26
when a California federal judge found
that a lawsuit over injuries and deaths
allegedly linked to Fresenius’ product
GranuFlo could be removed to federal
court as part of a larger mass action.