Sunday, June 4, 2017

When Conflicts Allegations Cut Deep (Or: From Russia... Again)




There's been a clear trend of the conflicts space becoming more of a "rough and tumble" kind of world. Here's a striking example of extreme, gloves-off escalation of allegation (and given the nature of the matter it's important to emphasize allegation), following our previous coverage of the underlying matter, comes:

"Former client says BakerHostetler lied to court to avoid disqualification"
  • "For nine months in 2008 and 2009, BakerHostetler represented the hedge fund Hermitage Capital Management in the investigation of a $230 million fraud scheme in Russia that began with the theft of the corporate identities of Russian companies in Hermitage’s portfolio. BakerHostetler earned $200,000 in the engagement."
  • "Now Hermitage is asking a federal judge to order its onetime lawyers to cough up $1.4 million in fees – not money Hermitage paid to BakerHostetler but legal fees Hermitage laid out to other lawyers in order to get BakerHostetler bounced from a U.S. government suit to recover some of the alleged proceeds of the Russian fraud. BakerHostetler represented the defendant in the forfeiture case, a Cyprus-based real estate holding company called Prevezon."
  • "In the fee motion filed Tuesday, Hermitage flat-out accused two prominent BakerHostetler lawyers of making 'repeated misrepresentations' to a federal trial judge and the 2nd Circuit in a misguided attempt to hold onto the firm’s Prevezon assignment. The motion, filed by Hermitage’s lawyers at Susman Godfrey, claims BakerHostetler partners John Moscow and Mark Cymrot falsely assured U.S. District Judge Thomas Griesa that the firm’s previous Hermitage assignment was related to a different Russian fraud scheme, not the fraud underlying the Prevezon case."
  • "And to compound the law firm’s betrayal, according to Hermitage, after it persuaded Judge Griesa to allow it to remain in the case for Prevezon, BakerHostetler demanded discovery from its onetime client Hermitage in order to portray Hermitage as the true villain of the story."
  • "Said BakerHostetler: 'We do not comment on pending litigation involving our firm. We will respond to the complaint - and our response will speak for itself.'"

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