Legal News

Here Come the Suits! Headaches Not Over for Former Milberg Lawyers

By Dan Slater

The WSJ editorial board — none too happy with what it sees as Congress’s lack of response to tort bar transgressions — today applauds prosecutors for their take-down of Milberg LLP, which on Monday inked a $75 million settlement agreement with the government. If there’s a moral to the story, writes the WSJ ed board, it’s this: “Prosecutors should keep digging into tort-bar practices.”

If prosecutors don’t, it’s becoming clear that private plaintiffs might. Earlier this week, two former Milberg antitrust partners, Douglas Richards and Michael Buchman, filed suits against Milberg founder Mel Weiss and the three other former firm leaders — Bill Lerach, David Bershad and Steven Schulman — recently convicted of participating in a scheme that paid kickbacks to class-action plaintiffs, claiming their illegal conduct constituted a breach of their fiduciary duty to their fellow Milberg partners. Click here for an NYLJ story from Tony Lin; here for Richards’s suit; and here for Buchman’s suit.

In an email to the NYLJ, Richards, one of the two ex-partners to sue, wrote: “Private litigation by those injured by the misconduct is just beginning.”

In Buchman’s suit, he named all four of the former name partners as defendants but Richards excluded Bershad. Richards declined to discuss this aspect of the case, but the NYLJ says the exclusion is presumably to preserve diversity jurisdiction, as both Richards and Bershad are New Jersey residents. Both suits, which argue that the defendants owed a duty to their innocent partners to come clean to the government about their activities, asks for $3 million in damages. Lawyers for Weiss, Lerach and Schulman did not return calls for comment Tuesday.

Richards and Buchman are now partners at the New York firm of Pomerantz, Haudek, Block, Grossman & Gross.

Full post as published by Law Blog - WSJ.com on June 18, 2008 (boomark / email).