REID COLLINS & TSAI LLP OBTAINS $12 MILLION SETTLEMENT FROM FORMER DURA AUTOMOTIVE EXECUTIVES IN BANKRUPTCY-RELATED LAWSUIT
- National trial firm Reid Collins & Tsai LLP represents the Chapter 7 Trustee for the estate of Dura Automotive Services, LLC in lawsuit against former Dura executives Lynn Tilton and Kevin Grady.
- Lawsuit alleges claims for breach of fiduciary duty against both Tilton and Grady including the failure to pursue a sale of the company to interested third parties.
- Settlement terms include $12 million payment, achieved before case had even entered discovery.
AUSTIN – September 12, 2023 (PRNewswire) – On Friday, the U.S. Bankruptcy Court for the District of Delaware approved a $12 million settlement of a civil litigation pursued by national trial firm Reid Collins & Tsai LLP (“Reid Collins”) on behalf of Jeoffrey Burtch, the Chapter 7 Trustee (“Trustee”) for the estate of Dura Automotive Services, LLC (“Dura”) against former Dura executives, including Lynn Tilton.
In April 2022, Reid Collins filed suit on behalf of the Trustee against Tilton and another former Dura executive, Kevin Grady. Dura, an automotive parts manufacturer, was a portfolio company of a group of funds called Zohar, also managed by Tilton.
The Trustee’s complaint asserts claims for breach of fiduciary duty against both Tilton and Grady for, among other things, failing to pursue the sale of the company to a group of interested third parties and instead pushing Dura into bankruptcy in an effort to allow Tilton to purchase the company herself at a sharp discount. The settlement was achieved quickly, before active discovery in the case had begun, even before Defendants’ motions to dismiss had been argued and adjudicated.
Reid Collins partner Craig Boneau, who leads the prosecution of the lawsuit, on the settlement’s significance:
“The settlement is an excellent result for the Trustee in a case that represents an important challenge to a common tactic designed to improperly take assets – pushing a company towards or into bankruptcy when a viable sale is possible. Our team expertly navigated numerous factual and legal complications related to Tilton’s Zohar funds and their parallel bankruptcy, and ultimately brought about a successful resolution quickly and efficiently.”
The case is captioned Jeoffrey L. Burtch, as chapter 7 trustee of the estates of Dura Automotive Systems Cable Operations, et al. v. Lynn G. Tilton and Kevin Grady, No. 2022-0343 (Court of Chancery, State of Delaware).
Press coverage of the settlement:
REID COLLINS & TSAI LLP RECOVERS $175 MILLION SETTLEMENT FROM FORMER INSYS DIRECTORS IN OPIOID-RELATED LAWSUIT
On April 14, 2023, Reid Collins & Tsai LLP, representing the Insys Liquidation Trust, announced a $175 million settlement agreement with certain former directors of Insys Therapeutics, Inc. partially resolving civil litigation arising from the company’s bankruptcy case.
Insys, a former public company, marketed and sold a highly addictive and inherently dangerous fentanyl spray to millions of people. The Trust, as the successor to Insys, alleges in its lawsuit that the company’s executives engaged in a multi-faceted unlawful scheme involving off-label marketing of the drug (non-FDA approved uses), titration of drug dosages (higher than FDA-approved doses), and payment of bribes and other kickbacks to doctors who prescribed the drug.
Due to the alleged misconduct, Insys and its executives became the target of multiple criminal proceedings, class actions, and other civil cases, as well as intense media scrutiny, including an HBO documentary and feature stories on 60 Minutes, Frontline, and NBC News. Ultimately, several of the company’s executives were convicted of racketeering charges, and the company agreed to a $225 million settlement with the federal government before collapsing into bankruptcy.
The Trust, as the successor to Insys in its bankruptcy action, then brought a lawsuit against the former directors of the company, alleging that their failures of oversight enabled this unlawful sales and marketing scheme. The Trust has settled its claims with the company’s former outside directors— Patrick Fourteau, Pierre Lapalme, Steven Meyer, and Brian Tambi. The settlement includes a $175 million judgment against these former directors, a partial payment from their personal assets, and assignment of their claims to recover the balance from XL Specialty Insurance Company and other insurers that issued D&O policies to Insys and its directors.
Reid Collins partner Eric D. Madden, who leads the prosecution of the lawsuit, on the settlement’s significance: “The alleged misconduct by defendants in this case contributed to the opioid crisis in this country and the demise of the company. The $175 million settlement, a substantial portion of the damages sought by the Trust, is an excellent result for the company’s creditors, the culmination of hard-fought litigation and extensive negotiations, and comprised in part from personal assets of the defendants.”
Madden further stated: “This settlement is also noteworthy as a successful resolution of a Caremark claim, which Delaware courts have described as ‘possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment.’”
Reid Collins was retained as special litigation counsel to investigate and pursue claims on behalf of the Trust in early 2021, after an extensive interview process. The Insys bankruptcy case is captioned In re Insys Therapeutics, Inc., No. 19-11292 (Bankr. D. Del.), and the Trust’s lawsuit is captioned Henrich v. Kapoor, et al., C.A. No. 12696-JTL (Del. Ch.). The Trust’s claims in that lawsuit remain pending against John Kapoor and Michael Babich, the company’s former Chairman and CEO, who were convicted on racketeering charges.
Click here to view the motion to approve the settlement.
Ex-Insys Directors Agree To $175M Ch. 11 Settlement (Law360)
Ex-Insys Directors Agree to $175 Million Opioid-Sale Accord (Bloomberg Law)
Bankruptcy Trust Reaches $175M Settlement With Insys Board of Directors (Law.com)
REID COLLINS FILES HISTORIC EMPLOYMENT DISCRIMINATION AND SEXUAL ABUSE LAWSUIT AGAINST FOX NEWS BASED ON NEW “ADULT SURVIVORS ACT”
On January 25, 2023, Reid Collins & Tsai LLP filed a groundbreaking employment discrimination and sexual abuse complaint against the Fox News Network, LLC, Twenty-First Century Fox, Inc., and former Fox News Co-President Bill Shine, on behalf of Laura Luhn, a former Fox News employee.
As alleged in the complaint, Ms. Luhn was subjected to a decades-long campaign of discrimination, manipulation, threats, and sexual abuse by former Fox News Chairman and CEO Roger Ailes. The rampant abuse at Fox News has been the subject of multiple films, exposés, and news coverage many of which covered portions of Ms. Luhn’s alleged experiences working at Fox News under Ailes.
The Complaint includes new factual allegations as well as causes of action revived under the recently passed New York State Adult Survivors Act. This new law provides a “lookback window” for survivors of sexual assault, allowing claims previously time-barred by statutes of limitation to be brought. The law’s one-year window went into effect as of November 24, 2022.
The Complaint asserts unlawful discrimination and negligence by Fox News and Twenty-First Century Fox that allowed Ailes to continuously abuse Luhn for years, as well as claims against Shine for aiding and abetting those illegal practices.
Reid Collins partner Barbara Whiten Balliette, counsel for Ms. Luhn, emphasized the firm’s commitment to vindicating her saying: “The abuse that Ms. Luhn suffered was some of the worst imaginable. People knew, but no one at Fox News stepped in to stop it. Her career and her life were destroyed. The Adult Survivors Act was created to redress wrongs exactly like these.”
The case is captioned Laura W. Luhn v. Fox News Network, LLC, Twenty-First Century Fox, Inc. & William Shine, Index No. 950003/2023 (N.Y. Sup. Ct.).
To view the Complaint, click here.
To view media reporting on the case, click on the links below:
• NBC: Former Fox News employee sues network, alleging Roger Ailes sexually abused her
• Bloomberg: Fox News Sued by Ex-Booker Over Negligence in ‘Decades-Long’ Abuse Campaign
• Los Angeles Times: Former Fox News employee sues over sexual abuse under New York state survivors law
• The Hollywood Reporter: Ex-Fox News Employee Laura Luhn Sues Network Over Roger Ailes’ Sexual Harassment and Blackmail
• The Daily Beast: Roger Ailes Accuser Sues Fox News and Trump’s Ex-Comms Director Bill Shine
• New York Daily News: Former Fox News employee files bombshell lawsuit claiming ‘severe’ sexual abuse and blackmail by late CEO Roger Ailes
• Vanity Fair: Ex-Fox News Staffer Sues Network, Former Executive Bill Shine Over Roger Ailes’ Alleged Sexual Abuse
• NPR: Ex-staffer sues Fox News and former Trump aide over sexual abuse claims
• Insider: A former Fox News staffer said Roger Ailes told her she was his ‘sex slave’ and took videos of the abuse to use as ‘blackmail,’ but the network would dismiss claims with ‘boys will be boys,’ lawsuit says
• The Hill: Fox News sued by former booker Laura Luhn over alleged ‘decades-long’ abuse
• Law360: Ex-Fox News Staffer Sues Under Sex Assault Lookback Law
• Huffington Post: Fox News Sued By Ex-Staffer Alleging ‘Decades-Long’ Abuse, Blackmail By Roger Ailes
• The Wrap: Laura Luhn Sues Fox News, Alleges ‘Decades-Long’ Sexual Abuse, Blackmail by Late CEO Roger Ailes
• Patch: Fox News Faces New Lawsuit Over Roger Ailes Sex Abuse Accusations
• Deadline: Laura Luhn Files New Lawsuit Against Fox News Claiming Sexual Abuse
• AdWeek: Former Fox News Staffer Laura Luhn Sues Network, Claims Sexual Harassment and Abuse by Roger Ailes
• Epoch Times: Former Fox News Employee Sues Network Over Sexual Abuse Allegations