A volatile regulatory landscape, rigorous enforcement practices, and an increasing focus on board composition have made effective governance, compliance, and public disclosure more important than ever. Our litigators represent directors and officersin federal, state, and bankruptcy courts concerning a broad range of claims, including securities and common law fraud, breach of fiduciary duty, negligence, insider trading, usurpation of corporate opportunity, disclosure issues, fraudulent transfer, conflicts of interest, wrongful termination, and whistleblower actions. We also lead clients through sensitive internal investigations as well as investigations initiated by the SEC, Department of Justice, and other federal and state government agencies.
Fiduciary Duty Disputes
Fiduciary duty takes many forms, from one party granting another control of certain financial affairs to the sharing of business secrets or technology or an agreement to jointly pursue a business opportunity. Because a breach of duty can have devastating effects on the parties involved, counsel must take a nuanced, proactive approach to reduce damages and recover assets.
McKool Smith’s track record in this area includes cases and appeals that have established some of the basic principles of modern fiduciary duty law. We represent plaintiffs and defendants—such as trustees, corporations, individual executors, guardians, beneficiaries, and others—in a broad spectrum of fiduciary-related disputes involving legal, financial, and tax matters.
Our attorneys' corporate governance litigation experience includes the following matters, among others:
- Fontainebleau D&O Suit. Secured settlements totaling more than $115 million on behalf of a group of investment funds in connection with a lawsuit filed against Jeffrey Soffer, the billionaire owner of the Fontainebleau Miami, and other directors, officers, and executives involved in the $2.9 billion failed Fontainebleau Resort and Casino project in Las Vegas, Nevada.
- FDIC D&O Litigation. Lead counsel for more than 30 outside directors for the two largest Dallas banks in massive litigation brought by FDIC against bank officers and directors.
- Bear Stearns. Represented directors and officers in connection with claims asserted by bankruptcy trustee involving responsibility for company problems, the role of Ernst & Young, and the accounting for inter-company transactions.
- Robert Holly v. DDH Corporation. Represented certain directors in connection with claimed accounting, tax and fiduciary duty issues arising from related companies and the accounting for inter-company transactions, allocation of expenses and public reporting of executive compensation.
- Search Capital. Represented certain directors of Search Capital in connection with claimed securities fraud relating to the use of PB 47 and the accounting for collections in the sub-prime auto lending industry.
- Affiliated Computer Services (ACS) Derivative Litigation. Represented inside directors and officers in connection with multiple matters relating to alleged option backdating.
- EDS/HP Shareholder Litigation. Represented EDS and certain officers and directors in class action alleging misrepresentations and accounting irregularities in connection with purchase of EDS by Hewlett-Packard Company.
- In re BearingPoint, Inc. Represented BearingPoint, Inc. Liquidating Trustee, John DeGroote Services, LLC, in the investigation and pursuit of claims against former directors and an officer of BearingPoint, Inc. for violations of corporate governance obligations. The matter settled on confidential terms.
- In re Seven Seas Petroleum, Inc. Represented bankruptcy trustee in the investigation and pursuit of claims against the former directors and officers of Seven Seas Petroleum, Inc., an exploration and production company with assets in Columbia. The case settled on a confidential basis, for insurance policy limits.
- In re Bank of New England. Represented bankruptcy trustee against former directors and officers of Bank of New England, leading to settlement for insurance policy limits.
- In re Deep Marine Technology. Represented the Liquidating Trustee for the Deep Marine estates in an adversary proceeding against the company’s former insiders based on allegations of fraud, breach of contract and other claims stemming from the bankruptcy. We successfully obtained a multi-million dollar compromise with the former shareholders that resulted in a distribution to non-insider unsecured creditors of over 75 percent.
- In re Gulf Fleet Holdings, Inc. Representation of the Liquidating Trustee for the Gulf Fleet estates in litigation against the company’s former insiders.