K&L Gates, Cleary Gottlieb, Cravath, Dewey: Business of Law
K&L Gates LLP must face a lawsuit over drink maker Le-Nature’s Inc.’s collapse, a Pennsylvania appeals court ruled in reinstating a $500 million case against the law firm.
Bankruptcy trustee Marc Kirschner sued K&L Gates in September 2009 in Pennsylvania state court, alleging the firm’s failure to detect fraud at the company resulted in losses of more than $500 million. K&L Gates was hired by Le-Nature’s to investigate allegations of improper conduct in 2003, according to court documents. The trial court’s December 2010 dismissal of the complaint was an error, the appeals court said.
“We conclude that the amended complaint avers a legally sufficient basis for concluding that K&L Gates owed a duty to Le-Nature’s and that K&L Gates’s breach of that duty proximately caused harm to Le-Nature’s,” the appellate court ruled May 14 in a 54-page opinion.
The court also concluded that Le-Nature’s had asserted a “viable cause of action” for holding the law firm “vicariously liable” for the negligence of Pascarella & Wiker LLP, a financial accounting firm.
Michael Rick, a spokesman for K&L Gates, and Carl Wiker, a partner with Pascarella & Wiker, didn’t immediately return phone calls seeking comment on the ruling.
Le-Nature’s, based in Latrobe, Pennsylvania, produced bottled water, tea and other flavored drinks in Latrobe and a plant in Phoenix. Creditors pushed the company into bankruptcy in 2006 demanding that its assets be sold to pay $1.4 million in debts, about two years before company officials were indicted in a $800 million fraud.
Le-Nature’s co-founder Gregory Podlucky was sentenced in October to 20 years in prison for fraud, tax evasion and money- laundering related to the company’s collapse.
The case is Kirschner v. K&L Gates LLP, No. 154 WDA 2011, Superior Court of Pennsylvania.
FDIC Counsel Krimminger Leaving to Join Washington Law Firm
Federal Deposit Insurance Corp. General Counsel Michael Krimminger, a senior adviser to former Chairman Sheila Bair during the 2008 financial crisis, is leaving the agency to become a partner in the law firm of Cleary Gottlieb Steen & Hamilton LLP LLP in Washington.
Krimminger, 54, worked in several roles at the FDIC since 1991, including as Bair’s deputy for policy, before becoming the top lawyer for the agency, which oversees depository institutions. After he leaves on May 25, his deputy, Richard Osterman, will fill in as acting general counsel while the FDIC decides on a replacement, the agency said in a statement.
“Mike has been instrumental in developing major policy initiatives during the most challenging time in the FDIC’s history,” Martin J. Gruenberg, the agency’s acting chairman, said in a statement.
Cleary Gottlieb’s banking and financial institutions practice spans 12 offices in the U.S., Europe, Asia and Latin America. The practice includes 15 partners and counsel in New York and Washington, the firm said. Cleary Gottlieb has about 1,200 lawyers worldwide.
Morgan Stanley Legal Chief Barron Rejoins Cravath
Francis P. Barron, former chief legal officer at Morgan Stanley, will rejoin Cravath, Swaine & Moore LLP as a partner on July 1 in the New York office. He will be a partner in the litigation department and a member of the board advisory practice.
Barron left the firm in July 2010 for Morgan Stanley, where he advised senior management on issues including the evolving legal and regulatory environment, the firm said.
Before joining Morgan Stanley, Barron was for 25 years a litigation partner at Cravath, where he advised corporations, financial institutions and accounting firms on securities, antitrust and commercial disputes and federal and state regulatory matters. He also was a member of Cravath’s board advisory practice, counseling boards, board committees and senior managers on issues including government and internal investigations, shareholder demands and derivative litigation, and accounting restatements.
In addition to Morgan Stanley, Barron’s clients have included CBS Corp., Citigroup Inc., DreamWorks Animation SKG Inc., General Electric Co., General Reinsurance Corp., Goldman Sachs Group Inc. and UBS AG, the firm said.
Ex-Bank of America Associate Counsel Joins Morrison & Foerster
Thomas J. Noto, former associate general counsel at Bank of America Corp., joined Morrison & Foerster LLP’s financial services regulatory, litigation and transactional practice as a partner. He will be in the Washington office, though he plans to transition to California.
At Bank of America, Noto provided legal support to Bank of America Home Loans, with responsibilities relating to mortgage and home equity lending, fair lending and neighborhood lending, the firm said. Earlier in his career, he worked for five years as a staff attorney at the Federal Reserve Board’s Division of Consumer and Community Affairs. He has also served as general counsel for mortgage lenders including Ameriquest Mortgage Co.
“Tom has broad knowledge of the many issues affecting mortgage lenders and mortgage servicers in the current fast- changing environment, including the mortgage regulations that have flowed from Dodd-Frank,” said Rick Fischer, co-chairman of Morrison & Foerster’s financial services group.
Morrison & Foerster has more than 1,000 lawyers in 15 offices in the U.S., Europe and Asia.
Dewey & LeBoeuf Sued by U.S. to Take Over Pension Plans
Dewey & LeBoeuf LLP, the failing New York-based law firm, was sued by the Pension Benefit Guaranty Corp. in an effort to take over pension plans covering 1,776 lawyers and staff.
The PBGC is seeking the termination of the law firm’s retirement plans and appointment as trustee, as well as the transfer of the plans’ records and assets. The government agency claimed in a complaint filed in Manhattan federal court yesterday that three Dewey pension plans were underfunded by $80 million as of May 11.
The move follows the PBGC’s announcement May 10 that it would take over Dewey’s pension plans. The agency said it will guarantee benefits up to limits set by the law, about $56,000 a year for a 65-year-old retiree.
The firm was sued last week by Vittoria Conn, a 55-year-old document specialist seeking to sue on behalf of employees she claims weren’t provided with the legally required notice before being fired. Conn is seeking 60 days’ pay and benefits for the fired workers.
The case is Pension Benefit Guaranty Corp. v. Dewey & LeBoeuf LLP, 12-CV-3833, U.S. District Court, Southern District of New York (Manhattan).
Dewey & LeBoeuf Italy Staff Form Firm With Rome, Milan Offices
Dewey & LeBoeuf LLP lawyers in Italy, led by Bruno Gattai, will form a new firm known as Grimaldi Studio Legale.
The firm will have 120 lawyers from Dewey, including 18 partners, at offices in Milan, Rome and Brussels, according to an e-mailed statement. The attorneys licensed the Grimaldi name from mergers and acquisition lawyer Vittorio Grimaldi, who will serve as honorary president.
The firm will focus on private equity, energy, competition, labor, corporate mergers and finance, according to the statement.
Ropes & Gray Expands in Asia on Private Equity Deals in China
Ropes & Gray LLP, the Boston-founded law firm with more than 900 lawyers, said it hired two partners from U.S. and U.K. firms in Hong Kong and plans to double its Asia-based lawyers by the end of the year.
Julian Chung, 51, will join on May 28, when Ropes & Gray becomes formally licensed to practice Hong Kong law, from London-based Norton Rose LLP, the Boston firm said. Gary Li, 36, joined as a partner from New York-based Paul, Weiss, Rifkind, Wharton & Garrison LLP, on May 10. Both lawyers will work on private equity investments in publicly listed companies, Ropes & Gray said.
“It’s a response to a specific request from our clients,” said Marcia Ellis, a Hong Kong-based partner at Ropes & Gray. She said private equity firms are increasingly investing in public companies in mergers and acquisitions and as cornerstone investors in initial share sales.
Ropes & Gray joins other U.S.-based law firms such as Kirkland & Ellis LLP in increasing the number of private equity and capital markets lawyers in Hong Kong. Wall Street firms, including Sullivan & Cromwell LLP and Simpson Thacher & Bartlett LLP, have also started advising on local law in the Chinese city, catching up to U.K.-founded firms that have offered local law advice since Hong Kong was a British colony.
The new Hong Kong and South Korean practices will contribute to an almost doubling of the number of lawyers the firm has in Asia, from 35 at the end of 2011 to more than 60 by the end of 2012, Ellis said.
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