In April 2014, following a two-week jury trial in Texas state court, RCT obtained a judgment in favor of its client, Petroleum Wholesale, LP, a full-service gasoline distributor with operations in nine western states. RCT prevailed on its client’s breach-of-contract claims and successfully defended against counterclaims that its client breached a fuel supply agreement. The court awarded $740,000 to RCT’s client and nothing to the defendants on their $10 million counterclaim. RCT tried the case against Chris Bell, a former U.S. Congressman and Texas gubernatorial candidate.
On April 2, 2014, RCT filed a $64 million petition in Travis County District Court on behalf of The Texas County and District Retirement System against numerous investment banks, including J.P. Morgan Securities, Merrill Lynch, and Morgan Stanley, which knowingly misrepresented residential mortgage-backed securities. The Texas County and District Retirement System is a multibillion-dollar governmental entity created by the Texas Legislature that serves more than 655 Texas county and district employers, ranging from sheriff’s offices to water and hospital districts.
Read Article Here
On March 24, 2014, the Second Circuit reversed the trial court’s summary judgment ruling in an interpleader action, United States v. Barry Fischer Law Firm, LLC, et al., holding that the long-standing penal law rule barred Federative Republic of Brazil from asserting rights arising from a Brazilian criminal judgment. RCT represents the Joint Official Liquidators of Trade and Commerce Bank, a claimant in the interpleader action seeking the approximately $7 million in interpleaded funds.
On March 31, 2014, RCT filed a lawsuit in New York State Supreme Court against Alphonse “Buddy” Fletcher, Fletcher Asset Management, and others related to their alleged mismanagement of various offshore funds whose claims were pooled pursuant to a confirmed plan of reorganization that was approved by the bankruptcy court on March 27, 2014.
In December 2013, RCT filed a lawsuit in New York state court against DLA Piper alleging that the law firm assisted an investment manager in defrauding two Cayman hedge funds. As alleged in the lawsuit, DLA Piper helped the investment manager misappropriate tens of millions of dollars from the Cayman hedge funds to make margin payments on behalf of a CDO that the investment manager also managed.
Read Article Here
RCT, special counsel to Yann Geron as Chapter 7 Trustee of Pali Holdings and Pali Capital, a defunct securities firm, obtained court permission to settle a suit commenced against 13 former officers and directors of Pali as well as one company. The settlement provides for an overall recovery in excess of $5.7 million. The settlement also provides other benefits to the Pali estates, including the disallowance of various related claims filed against the Pali companies.
RCT, as special counsel to the Trustee of Thelen LLP, settled overcompensation, fraudulent transfer, and other claims against 44 Thelen partners and former partners. RCT commenced 11 new actions against partners and former partners based on similar claims. Pending actions are subject to a motion to consolidate that will be heard next month.
On August 26, 2013, RCT announced that trial lawyers Eric D. Madden and J. Benjamin King have joined the firm as partners. They will launch the firm’s new office in Dallas.
Read Article Here
On July 16, 2013, RCT filed two lawsuits against Credit Suisse seeking damages in excess of $600 million related to failed “dividend recapitalization loans” syndicated by Credit Suisse from 2005 to 2007. As alleged in the lawsuits, Credit Suisse marketed and sold the loans based on false appraisals, which grossly overvalued the real estate that collateralized the loans. Eventually, every deal soured, and the borrowers ended up in bankruptcy.
An Ohio arbitrator has ruled in favor of RCT’s client, a former KeyCorp employee, in an arbitration against KeyCorp. The arbitrator held that the employee’s separation agreement, in which he purported to waive all claims against KeyCorp, was void for lack of consideration. As a result of the arbitration victory, RCT is now proceeding with a multimillion-dollar breach-of-contract claim against KeyCorp in Texas federal court.
The Hong Kong High Court appointed RCT to assist JLA Asia, the Hong Kong liquidators of Smart Union Mining, in pursuing claims arising from the judgment against a NY resident who was party to a mining contract. The claims arise from the default on an obligation to acquire a mining company incorporated in the BVI. RCT has commenced a lawsuit in New York Supreme Court to enforce the multi-million Hong Kong judgment.
Judge Robert E. Gerber of the Bankruptcy Court for the S.D.N.Y. granted foreign main recognition to the Joint Official Liquidators of two ICP Strategic Credit Income Funds. The ICP Funds are Cayman Islands exempted limited liability entities that invested in the RMBS market. In addition to recognition, the Court granted several forms of additional relief to assist the Liquidators in commencing potential actions in the U.S.
On July 22, 2013, the Grand Court of the Cayman Islands authorized the JOLs of two offshore ICP Funds to hire RCT to pursue third-party litigation claims against a U.S. law firm and a European Bank, as well as to investigate claims against insiders and other third-party service providers.
RCT has settled on confidential terms a lawsuit in Dallas state court against CBRE, Inc. The lawsuit alleged that CBRE issued a fraudulent or negligent appraisal that caused a group of funds to invest and lose more than $250 million in a $540 million refinancing loan made to the developers of the Lake Las Vegas master-planned residential and resort community in Nevada.
RCT filed suit against Corey Ribotsky and The NIR Group, LLC in New York Supreme Court on behalf of the Joint Official Liquidators of the AJW family of funds alleging fraud and breaches of fiduciary duty against the former managers of the AJW funds. The lawsuit alleges defendants artificially inflated the value of the AJW funds, which once reported assets under management of $800 million, for the purpose of collecting tens of millions of dollars in unjustified management and performance fees.
On behalf of the Joint Official Liquidators of the AJW Funds, RCT has sued Edward Bronson and several of his companies to collect more than $85 million owed under promissory notes and personal guaranties. Former management of the AJW Funds sold convertible debentures to Bronson’s companies in return for the notes, which were never repaid. RCT moved for immediate summary judgment on the notes and guaranties in New York Supreme Court.
RCT has filed suit against T. Boone Pickens III, CEO of Austin-based Astrotech Corporation, and the company’s board of directors. The derivative lawsuit alleges that Astrotech’s staggering 89 percent decline in share value is attributable to Pickens’s mismanagement and self-dealing, and seeks to hold Pickens and his hand-picked board personally responsible.
Read Article Here
RCT and its co-counsel, Fox Rothschild have filed a lawsuit in the S.D.N.Y. on behalf of Yann Geron, as chapter 7 trustee of Pali Capital and Pali Holdings. Prior to its liquidation, Pali Capital was known as a highly profitable securities firm. The suit seeks damages from Pali’s former directors and officers for breaches of fiduciary duty leading to the ultimate demise of the company as well as recovery of fraudulent conveyances and on a note.
Judge Alan Trust of the E.D.N.Y. granted foreign main recognition to the Joint Official Liquidators of the AJW family of funds. The AJW funds were Cayman Islands exempted limited liability funds that invested in PIPES. The Court found that the center of main interest of the funds was in the Cayman Islands and that the Official Liquidators should be recognized so that they could commence actions in the U.S.
RCT sued MF Global, Inc. for fraudulent transfers of $27 million in the Agape bankruptcy. After MF Global, Inc. sought bankruptcy protection, Agape’s lawsuit was eventually transformed into a $15 million proof of claim, which the Agape Trustee auctioned for $13.5M. EDNY District Judge Eisenberg granted RCT’s subsequent fee application, saying that RCT had “done an excellent job” and could “be proud of the work you’ve done.”
On December 24th, the Grand Court of the Cayman Islands authorized the JOLs of four offshore AJW Funds to hire RCT to pursue third-party litigation claims. Separately, the JOLs also act as liquidators for 6 onshore funds. The AJW funds were a failed PIPE investment fund that once had a NAV in excess of $800 million that has turned out to be almost entirely worthless. RCT is investigating claims against insiders and third-party service providers.
RCT has settled on confidential terms a legal malpractice lawsuit brought by a group of funds against Orrick Herrington & Sutcliffe LLP. The lawsuit sought damages of $95 million for Orrick’s failure to advise the funds that their extension agreements with Royal Bank of Scotland, PLC allowed the bank to unilaterally terminate a proposed $400 million CLO transaction.
Read Article Here
RCT obtained a ruling in the U.S. Court of Appeals for the Fifth Circuit that reversed a federal district court’s dismissal of a breach of contract claim brought by Highland Capital Management, LP against Bank of America, NA. The central issue is whether the parties’ oral agreement to trade bank debtwas binding under the Loan Syndications and Trading Association Standard Terms and Conditions.
Read Article Here
RCT has filed a lawsuit in federal court in Texas against KeyCorp on behalf of a former employee for breach of contract and fraudulent inducement. The lawsuit alleges KeyCorp failed to pay the employee a multi-million dollar bonus contractually owed in connection with the sale of the former asset manager, Austin Capital Management.
The U.S. District Court for the Northern District of California denied a motion by former directors and officers of Asyst Technologies to dismiss breach of fiduciary duty claims asserted by RCT’s client, the trustee of the Asyst Technologies Liquidation Trust. In a matter of first impression under California law, the court ruled that directors and officers can be held liable for a breach of fiduciary duty for authorizing a payment by an insolvent company on an existing contract. Preferential payments can give rise to D&O liability in California.
RCT has settled several fraudulent transfer claims it is pursuing on behalf of FTI Consulting, Inc., trustee to the Centaur LLC Litigation Trust. Centaur LLC and its subsidiaries, some of the country’s leading horse racing, off-track betting, and casino operators, filed for bankruptcy in 2009 and 2010. The lawsuits seek to recover fraudulent transfers totaling over $40 million that were made in connection with the development of a race track and casino in Pennsylvania. RCT recently resolved one such claim, brought in the Delaware bankruptcy court, for $3.7 million.
Prior results do not guarantee a similar outcome.