December 17, 2008 9:00 AM

The Am Law Litigation Daily: December 17, 2008

Posted by Ed Shanahan

Edited by Andrew Longstreth

SECURITIES
Potential Madoff Litigation Ropes in More Lawyers
Inside The American Lawyer newsroom, there's a running bet about how many Am Law 200 firms will get a piece of the Bernie Madoff pie. The over-under is 75. Any takers? Before you put your money down, check out Brian Baxter's latest installment of Who's Repping Whom in Madoff. (Check our the first installment here.)

Dechert's Andrew Levander, for example, is representing GMAC chairman J. Ezra Merkin, whose Ascot Partners hedge fund reportedly entrusted all its money to Madoff. The fund has tapped Schulte, Roth & Zabel. Skadden, Arps, Slate, Meagher & Flom has reportedly been retained by Rye Investment Management to look into potential Madoff claims for its losses. And Boies, Schiller & Flexner partner Stuart Singer tells Baxter that he, too, has been hired by "a number of individuals and groups" in South Florida, New York, and possibly elsewhere, but he's not naming names.

Most ambitiously, Susman Godfrey announced yesterday in a press release that its Financial Fraud Task Force has launched a "comprehensive investigation" into the collapse of Madoff Investment Securities, on behalf of several unnamed clients. The task force has already gathered "extensive information" on Madoff and funds that invested in his firm, such as Ascot Partners and Rye Select Funds, it stated.

"Not all of the Madoff claims are the same," partner Harry Susman said in a press release. "Some will be direct claims where the liability will be easy to prove but collection will be a real issue. Some will be indirect claims against a third party who entrusted their money to Madoff. These will be much more complicated and will require litigants to proceed very carefully, but they have a better home of recovery because there are solvent third party managers and auditors to hold accountable." In other words, deep pockets, look out.

We need to make a quick correction to the Litigation Daily. Andrew Levander
of Dechert represents Ezra Merkin (not Schulte). Schulte represents Ascot.

(CORRECTION: The original Am Law Daily post incorrectly identified Schulte Roth as representing GMAC's Ezra Merkin. The firm represents Merkin's fund, Ascot Partners.)

BANKRUPTCY
New York Judge Questions Dewey's Fee Application
Is it possible for a law firm to bill $100,000 a day on a matter? Apparently so.

If you don't believe it, check out the fee application submitted by Dewey & LeBoeuf in its work on the receivership of WexTrust Capital, an investment firm that targeted Orthodox Jewish investors. Another surprised person: federal district court judge Denny Chin, who on Monday questioned a $2.1 million fee application made by Dewey & LeBoeuf partner Timothy Coleman, who is the receiver for WexTrust.

Dewey's request covered work performed between August 11 and August 31, a total of 20 days. Dewey attempted to make its fees seem reasonable by noting that Coleman, who usually bills at $850 an hour, reduced his rate to $250. The firm also added that it capped its blended hourly rate for nonlegal services at $200 per hour. Still, Judge Chin noted that some partners billed as much as $950 an hour, and a handful of associates had rates of more than $600 per hour. Objections to these fees had been raised by lawyers at Sullivan & Worcester, who represent WexTrust investors.

In his order requesting more information, Judge Chin wrote that "without knowing anything about [the lawyers'] backgrounds, it is difficult for the court to determine whether the requested hourly rates are reasonable."

Coleman declined to comment to the Litigation Daily. He is expected to file an answer to Judge Chin's order this week.

WHITE-COLLAR
California Judge Denies Motions Challenging Indictments of Broadcom Defendants
Lawyers at Williams & Connolly and Skadden, Arps, Slate, Meagher & Flom are not known for minimalism in their motions practice. Challenging indictments against two former Broadcom executives for options backdating, they took the kitchen-sink approach. They filed motions challenging the sufficiency of the indictment, alleging prosecutorial misconduct, and requesting information on the sufficiency of the indictment. Sometimes sheer effort is not enough. The National Law Journal reports that Los Angeles federal district court judge Cormac Carney denied most of their requests in an order Monday. Read the order here.

Former Broadcom CFO William Ruehle (represented by Richard Marmaro of Skadden) and former CEO Henry Nicholas III (represented by Brendan Sullivan and Barry Simon at Williams & Connolly) were indicted in June, accused of seeking to "disguise, conceal, understate, and mischaracterize compensation expenses Broadcom was required to recognize in connection with its stock options." The NLJ reports that the defense teams have questioned a plea deal prosecutors reached last year with Nancy Tullos, Broadcom's former vice president of human resources. She pled guilty to obstruction of justice and is cooperating with the government. The defendants argued that prosecutors misrepresented to the court the factual basis for her guilty plea, and contended that Tullos pled guilty to a crime that doesn't exist.

Following the Supreme Court ruling in the Arthur Andersen case, Skadden's Marmaro argued that because Tullos destroyed documents before an investigation began, she cannot have committed a crime. Judge Cormac disagreed, focusing on Tullos's intent.

"Here, unlike Arthur Andersen, there are not competing explanations as to why Ms. Tullos ordered the document to be destroyed, and her intent is not in dispute," he wrote. "Ms Tullos admitted that she ordered the destruction of a document, not pursuant to a document retention policy, but solely to prevent its availability for use in a official proceeding."

IP
Momma's Boys Get Their Way
We didn't catch the premiere of the reality show Momma's Boys last night. Featuring overbearing mothers and their sons vetting a stable of ambitious potential brides, the show isn't exactly our usual fare. (Newsday called it "soul-sucking junk.")

But yesterday morning we made sure to tune in to federal court to witness our kind of "must see" drama: Gibson, Dunn & Crutcher's Orin Snyder beating back a last-minute effort by the creator of the Turkish hit Perfect Bride to stop NBC from airing Momma's Boys.

The battle that took place in Judge George Daniels's courtroom in U.S. district court for the Southern District of New York was pretty one-sided. Snyder, known for representing folks like Bob Dylan and Jennifer Lopez, spent most of the hearing sitting calmly while his adversary, Newark lawyer Evans Anyanwu, was grilled by the judge. It took only an hour and a half for Judge Daniels to side with Snyder and refuse to enjoin NBC from broadcasting the show. At the defense table, Snyder was joined by Daniel Kummer, NBC's vice president for litigation and content protection.

The plaintiffs are Luftu Murat Uckardesler, whose reality show Perfect Bride has been a massive hit in his native Turkey, and Global Agency Ltd., a British licensing company. Uckardesler claims to own a U.S. trademark on the Perfect Bride title and to own the copyright to a reality television format centering on mothers and sons and their attempts to find the perfect bride. He alleged that NBC capitalized on the success of Perfect Bride by using that phrase in marketing materials, and asserted that the airing of Momma's Boys endangers the plaintiffs' ongoing negotiations with an unnamed NBC competitor. Along with a 45-day injunction to stop NBC from airing the show, the plaintiffs are seeking punitive and other damages.

In his bench ruling denying the injunction, Judge Daniels castigated the plaintiffs for waiting until the day before the show aired before filing their complaint.

--David Bario

REGULATORY
Holder Bares Almost All in Questionnaire
How well do you know President-Elect Barack Obama's nominee for attorney general? To test your knowledge, check out the 47-page questionnaire Eric Holder, Jr., filled out for the Senate Judiciary Committee (which our colleagues at Legal Times flagged for us). Did you know, for example, that his middle name is Himpton? How about that his compensation at Covington & Burling for 2008 was $2.1 million? Holder also discloses his biggest cases, his clients at Covington, his pro bono work, his total net worth, and a whole bunch more.

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