Tuesday, May 5, 2015

Law Firm Disqualifications (Pursued or Achieved) Making News


First up, the case of the "Cat Came Back" -- "North Carolina Business Court: What Part Of Disqualification Do You Not Understand?" --
  • "The disqualified law firm had asked Judge Bledsoe to clarify his Order disqualifying it from representing the Plaintiff Kingsdown.  That was due to the firm's past representation of Defendant Hinshaw (the corporation's CEO) on a personal basis in the transactions which were the heart of the lawsuit."
  • "The law firm was not giving up its representation of its corporate client easily.  The Court's disqualification Order said that the law firm was disqualified from "further representation of Kingsdown in this matter against the Hinshaws."  Op. ¶56.  How far did the prohibition of that Order really go? The law firm argued that it should be allowed to continue in its role as Kingsdown's regular corporate counsel and to advise Kingsdown on the litigation against Hinshaw without appearing as counsel of record, so long as it did not disclose any of the confidential information it had obtained in the course of its representation of Mr. Hinshaw.
  • "Judge Bledsoe shot that argument down quickly.  He said: 'To the contrary, the Court intended that the Firm would cease all representation of Kingsdown adverse to the Hinshaws in this matter, whether as litigation counsel or otherwise. The Firm’s failure to satisfy Rule 10(b) of the Rules of Professional Conduct and the appearance of impropriety created by the Firm’s representation of Kingsdown do not disappear simply because the Firm is no longer counsel of record – as corporate counsel, the Firm is still representing a current client (Kingsdown) adverse to a former client (the Hinshaws) in a substantially related matter, and the ethical concerns attendant to that representation, including the appearance of impropriety, remain.'"
  • "So it looks like this entire lawsuit is radioactive to the law firm, despite the law firm's protestations that its client is being deprived of the counsel of its choice.  The Court responded to that point by saying that: 'the right of one to retain counsel of his choosing is secondary in importance to the Court’s duty to maintain the highest ethical standards of professional conduct to insure and preserve trust in the integrity of the bar. Avoiding a conflict and the appearance of impropriety are the best solutions.'"
"Affiliate Representation, Advance Waivers, Appearance of Impropriety, and Purloined Documents" --
  • "In short, the court determined that 'the facts weigh in favor of the conclusion that [subsidiary] and [parent] are a unified client. Hogan Lovells has advised [parent] on strategic decisions in matters that impact the entire corporate family, [parent] and [subsidiary] share the same legal department, and the company considers Hogan Lovells to be both its and its subsidiaries’ top strategic firm.' The court’s conclusion that the law firm represented both parent and subsidiary meant that the firm was engaged in a concurrent conflict of interest in the litigation at hand."
  • "The court stuck to this conclusion even over the parent’s signed representation agreement with the firm in 2005 stipulating to 'Client Identification' as follows: ‘You agree that the person or entity identified as engaging us in the Transmittal Letter is our client for the specific matters on which we are engaged, and that we shall not be deemed to represent any of its parents, subsidiaries, or other affiliates unless we expressly agree in writing to do so.'"
  • "The court disregarded this agreement because “the behavior of Hogan Lovells, [parent], and [subsidiary] since 2005 implies that all three understood Hogan Lovells was more than just [parent]’s law firm. Hogan Lovells’s relationship with [parent] may have started with the parent company alone, but its later representation of [subsidiary] and at least one other subsidiary . . . shows the expansion of their attorney-client relationship."
"Caesars Creditors Try to Disqualify Kirkland" --
  • "The committee has asked a judge to disqualify Kirkland, claiming the firm is conflicted because it has represented the casino company’s majority owners, Apollo Global Management LLC and TPG Capital, on unrelated matters. The committee is also claiming that the firm improperly received almost $10 million in fees on the eve of the company’s Jan. 15 bankruptcy."
  • "Bankruptcy is costly, and the spat over Kirkland is running up the bill. The firm said in court papers that it spent almost $10 million in the first six weeks since Caesars filed for bankruptcy. The disqualification fight will add to the cost without moving the case closer to a resolution."

No comments:

Post a Comment