Legal News

Billionaire loses request for documents in Milberg kickback case

By Richard Binder

Texas billionaire Sam Wyly, who is suing Milberg LLP for malpractice over a CA Inc. shareholder lawsuit settlement, lost his bid to force the law firm to preserve sealed documents related to a criminal investigation. U.S. District Judge John Walter, at a hearing Monday in Los Angeles, denied a request by Wyly to intervene in the criminal case

Wyly was seeking to preserve documents related to the criminal case that are now under a protective order. In that case, prosecutors alleged that Milberg and several of its partners obtained more than $200 million in attorney fees by paying kickbacks to name plaintiffs. Four of the firm's former partners, including Melvyn Weiss and William Lerach, and several other defendants, have pleaded guilty to charges related to the case and are serving prison sentences.

Wyly has filed a motion for relief from a prior class action settlement involving shareholders of CA Inc. and a malpractice lawsuit against Milberg and the other law firms that negotiated the settlement. In a Jan. 20 motion to intervene in the government's criminal case against Milberg, Wyly said the firm and its co-counsel failed to reopen the settlement discussions after it was revealed that CA's most senior executives had covered up massive accounting fraud. As part of the settlement, Milberg had obtained the equivalent of $40 million in attorney fees, he said.

Prosecutors said in a Jan. 26 filing that the protected information, including grand jury testimony and exhibits, isn?t relevant to Wyly?s lawsuit against Milberg and doesn?t include evidence that paid plaintiffs were involved in the CA shareholder cases.

See here and here for details.

Full post as published by Legal Pad | LA on February 11, 2009 (boomark / email).