In-House Counsel

Here Come the Suits

By Hanna

A week after Wall Street was forced to change its  “evil ways”  the first law suit was filed by broker-dealer Ameriprise Financial Services Inc. against mutual fund manager Reserve Fund for allegedly alerting institutional investors that Reserve Fund was holding close to $800 million of Lehman Brothers Holdings Inc. debt.

According to an article penned by Matt Miller, the tip-offs were made the same day Lehman filed for bankruptcy and Ameriprise now claims those tip-offs led to par-value redemptions while other investors were left holding the bag.

Statistic show that law suits tend to increase during tough economic times.  It doesn’t take a bankruptcy for the finger pointing to start and your business does not need to be circling the Wall Street drain before it too could be affected. 

Skyrocketing fuel costs, for example, may cause a supplier to pass along the increases even though there is no provision in the contract to do so.  A disagreement ensues, leading to a contract default that later escalates into a suit.  Falling orders, for example, can lead to employee layoffs that if not done properly can result in claims of age discrimination or wrongful discharge.  A bad economy can boomerang in a number of ways.

Unfortunately, tough times encourage people to look for someone to blame and sue.  Leveraging foresight and anticipating problems before they happen will therefore help protect your backside.

Full post as published by Legal Literacy on September 26, 2008 (boomark / email).