Milberg LLP and Duane Morris LLP separately are representing these individuals, who years ago invested some of their savings in Argentine bonds but never exchanged them for restructured debt after the country’s 2001 default.
Their lawyers say the dispute has hurt these individuals financially and in their reputations.
“Argentina for so long has said that all of the debt holdouts are vulture funds and speculators,” Rudolph DiMassa, a partner at Duane Morris, said in a telephone interview yesterday. His clients, however, like those represented by Milberg, are individuals who “all paid 100 cents on the dollar for their bonds.”
DiMassa’s clients, with holdings “close to $200 million with interest,” weren’t parties to the most recent ruling of U.S. District Judge Thomas Griesa. The judge ruled Nov. 21 that Argentina had to pay $1.3 billion, the amount claimed by holders of the defaulted debt, into an escrow account by Dec. 15 if it makes the restructured debt payments.
DiMassa said that his clients will probably seek permission to file what’s known as an amicus brief in the appeal of the ruling to the U.S. Court of Appeals in New York.
Milberg joined the litigation directly, according to partner Michael Spencer, even though the claims of the so-called holdout hedge funds dwarf those of his clients. His clients’ investments are “in the range of $525 million” -- not including any post-judgment interest.
Known as the Varela plaintiffs in the litigation, his clients are siding with Elliott’s NML Capital Ltd. because “we thought joining with the funds was an effective way of getting paid,” Spencer said in a telephone interview yesterday.
Working with DiMassa on the case are partners Anthony Costantini and Gerard Catalanello and associate Suzan Jo. Working with Spencer at Milberg is associate Gary Snitow.
Argentina won a delay of Griesa’s ruling on Nov. 28 when the federal appeals court imposed a stay, postponing the effect of the rulings. The court, which is considering Argentina’s appeal, said it will handle the case on an expedited basis, setting Feb. 27 for oral argument.
Ex-Ernst & Young Lawyers’ Tax-Shelter Convictions Reversed
Two former Ernst & Young LLP tax attorneys, Richard Shapiro and Martin Nissenbaum, won reversal of their convictions for developing illegal tax shelters sold by the accounting firm from 1999 to 2001.
A three-judge panel of the U.S. Court of Appeals in New York ruled 2-1 that the convictions weren’t supported by sufficient evidence. The court yesterday also affirmed guilty verdicts against former Ernst & Young tax lawyer Robert Coplan and a former accountant at the firm, Brian Vaughn. The four were convicted after a 10-week trial in 2010.
Jurors found that the former Ernst & Young executives sold illegal shelters to wealthy clients based on fraudulent factual scenarios. That helped the clients reduce or eliminate tax liabilities on incomes of more than $10 million.
The scheme generated billions of dollars in paper losses used to offset taxes owed, prosecutors said. The government lost $2 billion in taxes in a scheme that involved about 40 people, the judge said.
The four were members of New York-based Ernst & Young’s VIPER Group, which stood for Value Ideas Produce Extraordinary Results.
In its decision, the court also affirmed a 15-month prison sentence imposed on a fifth man in the case, Charles Bolton, an investment adviser who pleaded guilty to a single count of conspiracy. The court threw out a $3 million fine against Bolton, sending the matter back to the trial court to reduce it to $250,000, which the court said was the maximum allowed under the law.
Ernst & Young, which wasn’t charged, said it cooperated with the government’s investigation.
Ellen Davis, a spokeswoman for U.S. Attorney Preet Bharara in Manhattan, declined to comment on the ruling.
The case is U.S. v. Coplan, 10-583, U.S. Court of Appeals for the Second Circuit (Manhattan).
Madoff Trustee’s Firm Seeks $61.7 Million in Five Months’ Fees
The liquidator of Bernard Madoff’s brokerage asked a judge to approve fees for himself and his law firm of $61.7 million for the five months from Feb. 1 to June 30, plus $1 million of expenses, for 179,055 hours of work, according to a federal court filing in Manhattan.
Trustee Irving Picard’s website says he has recovered or is due to receive a total of $9.2 billion, mostly from alleged participants in the fraud, to return to the con man’s investors who have filed claims for an estimated $17.3 billion in lost principal.
Two Arrested, Sued in Alleged IBM Deal Inside-Trading Scheme
Two ex-brokers accused of running a $1 million insider- trading scheme tied to International Business Machines Corp. (IBM)’s acquisition of SPSS Inc. were criminally charged and sued by U.S. authorities.
Thomas Conradt, 34, a Denver lawyer, and David Weishaus, 32, described by the government as longtime friends, were arrested yesterday by the Federal Bureau of Investigation, Peter Donald, an FBI spokesman, said.
The U.S. Securities and Exchange Commission alleged in a civil suit filed yesterday in federal court in Manhattan that the men learned that IBM had retained a law firm in connection with its possible acquisition of the software company before it was announced.
IBM and SPSS issued a press release on July 27, 2009, on IBM’s plan to buy SPSS for about $1.2 billion, or $50 a share.
The two men had learned of the deal two months earlier from a roommate of Conradt’s who got the information from an associate at a law firm that worked on the deal, the SEC alleges.
Conradt passed the information to Weishaus and at least three others who then traded in SPSS stock in July, the regulators said.
“Ultimately, the trades placed by Conradt, Weishaus and three registered representatives resulted in ill-gotten gains exceeding $1 million,” the SEC alleged.
The case is SEC v. Conradt, 12-cv-8676, Southern District of New York.
Law Firm News
Atlanta’s Smith Gambrell Merges With New York’s Hartman & Craven
Smith, Gambrell & Russell LLP merged with Hartman & Craven LLP, a New York law firm, as of Oct. 1, according to a statement.
Hartman & Craven’s attorneys will practice as the Hartman & Craven Law Group of Smith, Gambrell & Russell LLP until the end of 2013. Smith, Gambrell & Russell LLP will continue to be the firm’s name, with headquarters in Atlanta.
Stephen M. Forte, Smith, Gambrell’s chairman and managing partner, said in a statement that “Hartman & Craven’s real estate and corporate transactional capabilities, coupled with their experienced litigation and trusts and estates practices, greatly enhance SGR’s existing capabilities both in New York and firmwide.”
Two Employment Lawyers Join Baker Hostetler Chicago Office
Baker & Hostetler LLP said Joel Griswold and Melissa Siebert joined the firm as partners in its Chicago office in the employment and labor group. Both attorneys previously worked at K&L Gates LLP.
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