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October 8, 2008 2:38 PM

Allen & Overy's Patricia Hynes to Fuld's Rescue

Posted by Vivia Chen

Hynes_patricia1_2 We've just learned from crisis manager extraordinaire George Sard that Lehman Brothers's beleaguered CEO Richard Fuld is being counseled by Allen & Overy litigation senior counsel Patricia Hynes.

No surprise, given Hynes's creds. A former name partner at Milberg Weiss (once known as Milberg Weiss Bershad Hynes & Lerach) and a onetime assistant U.S. attorney in New York's Southern District, Hynes led several major cases against brokerages and investment houses like Drexel Burnham Lambert and Paine Webber through the eighties and nineties, according to a profile in Am Law Daily sibling publication New York Law Journal. She left Milberg in 2006, the highest-profile partner to defect after the firm was indicted in May of that year.

This past May, the seasoned litigator assumed the presidency of the Association of the Bar of the City of New York.

Now, Sard also mentioned that Lehman is being represented by Simpson Thacher & Bartlett's Michael Chipega. No surprise here given that Lehman is a longtime client of the firm. But, interestingly, Hynes is married to Simpson Thacher partner Roy Reardon, who once upon a time led Simpson's litigation department.

Could it be that Simpson had a hand in Fuld's hiring of Hynes? Well, things could get interesting should Fuld's and Lehman's interests ever diverge.

We left a message for Hynes but have not heard back. In the meantime, we also checked in with white-collar defense lawyer Robert Morvillo.

Morvillo, a dean of the white-collar crime bar whose clients have included Martha Stewart and former AIG CEO Maurice "Hank" Greenberg, isn't representing anyone embroiled in the spectacular financial turmoil, at least not yet. But with so many fallen masters of the universe running loose on the streets, it's unlikely that the Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer name partner will be idle for long.

We talked to Morvillo on Tuesday and asked him about this week's congressional hearings into what caused the current credit market crisis and about Fuld's testimony.

Fuld said in his testimony, "I feel horrible about what happened," but he never admitted any fault for Lehman's collapse. Were you surprised he wasn't more contrite?
I was not surprised. No one gets on national television to say, "I violated the securities regulations and defied the public's trust."

If Fuld had said, "Yes, I've sinned and contributed to this mess," would that admission make him vulnerable to criminal charges and civil suits?
Not necessarily. Some situations call for being defiant; some contrite. He could have had a good-faith belief that it was not his fault. He wasn't the only one caught in all this. There's a whole bunch of people at the helm at the time of the companies' demise--at Freddie Mac, Fannie Mae, Wachovia, Merrill Lynch, AIG.

Do you think he got immunity for his testimony?
I haven't read anything that suggested that. Congress has been very wary of granting immunity since Oliver North's testimony [in the Iran-Contra scandal].

So was it risky for him to testify before Congress?
When your client is testifying under oath, you have to analyze the facts and decide whether it's a plus or minus. Some testify under oath and the case goes away; others testify, and they are prosecuted. Whoever is representing him must have thought that he has a good defense.

Well, you don't really expect that Fuld's testimony will make it all go away?
I have no idea. [But] various enforcement agencies will likely scrutinize Fuld for the next two years--the SEC, FBI, U.S. attorney's offices in the Southern and Eastern districts. We know that Bob Morgenthau of the New York D.A.'s office isn't shy, nor is Andrew Cuomo. And he could also face civil charges.

Wow, it sounds like he needs a platoon of lawyers.
Guys with that kind of wealth will have more than one lawyer.

Are you waiting by the phone for Fuld's call?
No. [But] a lot will happen in the next six to 18 months. Lawyers of my ilk will be making a good livelihood.

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