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February 20, 2009 8:17 AM

Madoff Victims' Lawyers Establish Global Alliance in Madrid

Posted by Brian Baxter

Madoff Alliance  

UPDATE: 6:00 p.m., Feb. 20. Baker & Hostetler partner Irving Picard, court-appointed trustee for Madoff's broker-dealer, told a meeting of creditors that no securities had been bought for clients in 13 years. "There wasn't any stock bought or sold," fellow partner David Sheehan told a packed auditorium at U.S. bankruptcy court in Manhattan. "It was all just made up . . . You got somebody else's money."

While Bernard Madoff has the able counsel of Ira Sorkin, the savvy Dickstein Shapiro litigator recently profiled in The New York Law Journal, lawyers for many of the disgraced investment manager's alleged victims are in the process of organizing an international network to coordinate future legal actions.


On February 17 the first such meeting of the "Global Law Firm Alliance" was held at the offices of leading Spanish firm Cremades & Calvo-Sotelo in Madrid (the photo above is of the participants at that meeting). The firm's founding partner and executive director, Javier Cremades, was appointed president of the alliance. McCarter & English international practice group chair Gaytri Kachroo was named vice president.

The alliance also appointed a permanent secretariat sitting in Madrid in Henning Wegener, a former German ambassador to the United Nations and current vice secretary of NATO.

Cremades said in a statement that the group was formed to "evaluate the scope of damage caused and to articulate the right to defense" of those defrauded through the Madoff scandal. Cremades said that the meeting of 34 law firms from more than 20 countries is thought to be among the first where an international response is sought to an alleged fraud with global implications.

"This is even more important in a case like [Madoff], as it escapes the traditional reach of national jurisdictions," said Cremades, estimating that the group would try to serve more than 3 million Madoff victims.

Kachroo says she cannot recall a fraud of Madoff's magnitude ever having occurred as long as she's practiced law, so she feels it's natural to devise an appropriate international response to consider the various permutations of a Ponzi scheme that's puzzled many with its complexity.

"This is obviously happening at a time where there are many other organizations--both informal and formal--that are coming up as technological and other means make it possible for us to have global coalitions," says Kachroo, who did not attend the conference in person but spoke to Cremades by phone.

The alliance includes three Am Law 200 firms--Goodwin Procter, McCarter & English, and Sonnenschein Nath & Rosenthal--as well as plaintiffs firm Labaton Sucharow. Firms that are part of the group represent banks, hedge funds, public institutions, and individuals.

Cremades's firm became involved in the Madoff mess in late January when it joined Labaton in a class action suit filed against Spanish banking giant Banco Santander in U.S. district court in Miami.

Santander acknowledged that its clients had nearly $3 billion in exposure via a bank fund that invested with Madoff. Subsequent to the class action filing, Santander, represented by Hunton & Williams commercial litigation chief Samuel Danon, offered a settlement to clients with Madoff losses valued at roughly $1.8 billion. It remains the only Madoff-related settlement offer by a financial institution so far.

The New York Times reported on Thursday that roughly 70 percent of Santander's clients have agreed to the settlement. It's not known how many Cremades and Labaton clients have accepted the offer. (Lead Labaton partner Javier Bleichmar, listed as a member of the Global Alliance, did not respond to a request for comment.)

The alliance hopes to serve as a "point-of-contact" for exchanging non-privileged information and expertise, says McCarter & English's Kachroo.

"There's going to be some sort of cooperation between folks as they're going forward to figure out appropriate strategies to deal with this," says Kachroo, who represents Boston-based financier Harry Markopoulos--widely hailed as the chief whistleblower in the Madoff matter. "While we're representing similar interests, we don't want to be acting in conflicting ways."

Kachroo also represents the team that, with Markopoulos, spent 10 years investigating Madoff. The team includes senior research analyst Neil Chelo of Ocean Ridge, Fla.-based Benchmark Financial Services, Frank Casey of London-based hedge fund Fortune Asset Management, and former financial journalist Michael Ocrant. (We caught up Kachroo once before in early January, before Markopoulos testified before the House Committee on Financial Services.) As a result of the work, she says, she's forged relationships with congressional counsel and SEC Inspector General David Kotz.

"My input would come as cocounsel to hopefully many of these [Global Alliance] firms because of the inside knowledge that I have of the investigation," she says. In March, Kachroo will be in Washington, D.C., with Cremades, Wegener, and other members of the alliance for a gathering that will include meetings with federal officials like SEC chair Mary Schapiro.

Sonnenschein bankruptcy and restructuring partner Carole Neville also plans to be in D.C. that week.

"There are a lot of issues that have to be dealt with--client confidentiality, privilege, and joint events," says Neville, whose firm is representing investors directly involved with Madoff's broker-dealer Bernard L. Madoff Investment Securities.

Neville says she has no cases to file because the broker-dealer's trustee--Baker & Hostetler's Irving Picard--has the right to all causes of action. (Picard will preside over the first meeting of the broker-dealer's creditors on Friday in Manhattan.) Still, she's grateful for the support of her colleagues abroad, especially in light of other evolving international scandals like that at Stanford Financial.

"I think this Global Alliance is going to have more than one fraud to handle," she says.


The following is a list of lawyers and law firms that comprise the Madoff Global Alliance:

Argentina

Marcelo Gebhardt at Aguirre Saravia & Gebhardt in Buenos Aires.

Julián Martín Obiglio at Estudio Borda in Buenos Aires.

José Ignacio Vocos at Vocos, Monfarrell, Casas, Castro & Associates in Córdoba.

Austria

Gabriel Lansky at Lansky, Ganzger & Partner in Vienna.

Brazil

Renato Faria Brito at Brito & Associates in Sao Paulo.

Chile

Paulo Montt at Ferrada Nehme in Santiago de Chile.

Michael Grasty at Grasty, Quintana, Majlis & Cia in Santiago de Chile.

Ecuador

Javier Robalino at Pérez Bustamante & Ponce in Quito.

France

Yves Ardaillou at Bersay & Associates in Paris.

Michel Pitron at Gide Loyrette Nouel in Paris.

Daniel Kahn at Kahn & Assoicates in Paris.

Sophie Scemla at Orrick Rambaud Martel in Paris.

Germany

Eckhart Schleifenbaum at Nörr Stiefenhofer Lutz in Munich.

Walter Späth at Rohde & Späth in Berlin.

Israel

Gadi Ouzan at Shibolet & Co., in Tel Aviv.

Jeremy Benjamin at Goldfarb, Levy, Eran, Meiri, Tzafrir & Co., in Tel Aviv.

Solo practitioner Jacob Sabo in Tel Aviv.

Italy

Luca Pardo at Coccia De Angelis & Associates in Rome.

Velia Leone at Studio Legale Leone & Associates in Rome.

Lithuania

Mindaugas Vadapalas at Eurolex in Vilnius.

Luxembourg

Laurent Fessmann at Noble & Scheidecker in Luxembourg City.

Lex Thielen at Thielen & Stroesser in Luxembourg City.

Malta

Henri Mizzi at Camilleri Preziosi in Valletta.

Mexico

José Marín Meza Sánchez at C&M Lawyers in Mexico City.

Carlos Alberto Martínez at IDN Consultoría de Negocios (consulting firm) in Mexico City.

Luis Manuel Guadarrama Díaz at Pontones, Guadarrama, Lopez Malo & Guerra in Mexico City.

Ulrich Richter Morales at Richter Ramírez & Associates in Mexico City.

Netherlands

Fee von Maltzahn and Mijke Sinninghe Damsté at Loyens & Loeff in Amsterdam.

Jurjen Lemstra at Pels Rijcken & Droogleever Fortuijn in The Hague.

Panama

Jaime Ingram at Mossack Fonseca & Co., in Panama City.

Spain

Juan Manuel Díaz Guerrero at Cremades & Calvo-Sotelo in Bogotá, Colombia.

Juan Pablo Gallego at Cremades & Calvo-Sotelo in Buenos Aires, Argentina.

Luís Nobre Guedes and Hugo Ramos Alves at Cremades & Calvo-Sotelo in Lisbon, Portugal.

Javier Cremades at Cremades & Calvo-Sotelo in Madrid.

Switzerland

Daniel Fischer at Fischer & Partner in Zurich.

Jean-Marie Vulliemin at Froriep Renggli in Geneva and Madrid.

United Kingdom

Geoffrey Gauci at Bristows in London.

David Greene at Edwin Coe in London.

Patrick Giles at Rawlings Giles in London.

Nick Gibbons at Speechlys Bircham in London.

Uruguay

Agustín Etcheverry at Blanco & Etcheverry in Montevideo.

Andrés Mariño at Di Bello - Reino in Montevideo.

Joaquín Reyes at Reyes Rius in Montevideo.

Solo practitioner Arturo Caumont.

United States

Charles Grice and Michael O'Keefe at CRI Compliance (consulting firm) in New York.

Brenda Sharton at Goodwin Procter in Boston.

Thomas Hefferon and David Permut at Goodwin Procter in Washington, D.C.

Javier Bleichmar at Labaton Sucharow in New York.

Gaytri Kachroo at McCarter & English in Boston.

Carole Neville at Sonnenschein Nath & Rosenthal in New York.

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