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June 17, 2009 3:59 PM

Patton Boggs: Baker Botts Should be Disqualifed from Stanford Case

Posted by Zach Lowe

Ah, the Allen Stanford case. It's almost too hard now to keep track of all the strange legal issues Stanford's alleged $8 billion phony certificates of deposit scheme has brought up: The allegedly inappropriate conduct of Thomas Sjoblom, a Proskauer Rose partner who is being sued by a former Stanford official (chief financial officer Laura Pendergest-Holt) whom Sjoblom represented during her testimony before the SEC--at the same time he was representing Stanford's company; an allegedly illegal search of Pendergest-Holt's home, including her underwear drawer; and the arrest of an SEC attorney investigating Stanford for allegedly disobeying a police officer's order

It's been a strange case, and we're just getting off the ground. But add a new twist to the list: Patton Boggs (the latest in a string of lawyers representing Stanford) has teamed with Stanford's local counsel to request that Baker Botts be disqualified from advising the receiver collecting Stanford's assets. Why? Because Baker Botts apparently advised Stanford while he was building his offshore banking empire in the 1980s. Only Baker Botts disagrees, saying they did only about $850 for a party that has some link to Stanford and his banks, according to this nice story in Bloomberg

The Patton Boggs motion, which you can download below, says Baker Botts advised Stanford and his father for at least two years in the mid-1980s, and that it is therefore inappropriate for Baker to be involved in organizing Stanford's assets and winding down his businesses. The money quote: "It is unconscionable that Baker Botts could turn on its former client to dismantle and disembowel the very corporate structure and product lines the law firm created, likely using privileged information in the process." The motion says that Baker Botts might be more interested in tearing down Stanford's empire rather than preserving assets for creditors and victims. 

Baker Botts shot back by saying they had no record of ever representing Stanford, other than about 5-1/2 hours of work two lawyers did for a "related party" in the mid-1980s, Bloomberg says. Those two lawyers are long gone from Baker's offices. 

The receiver in the case, Dallas-based attorney Ralph Janvey, did not respond to Bloomberg's requests for comment. 

Christina Sarchio, the Patton Boggs partner who cosigned the motion to DQ Baker Botts along with his local counsel, Ruth Brewer Schuster, did not respond immediately to a request for comment. (But her firm profile does contain this gem: "Described by her peers as 'charming in person, deadly in the courtroom,' Ms. Sarchio has received a number of awards.")

This one will be interesting to watch; Baker Botts has already submitted bills for nearly $6 million worth of work since the SEC filed charges against Stanford in February. 

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