U.S. District Court Washington

G&E currently represents a group of institutional investors who collectively purchased over $600 million of senior and junior subordinated notes issued by WaMu Bank in a securities fraud action against WaMu Bank’s bankrupt parent company WaMu Inc.  Following the seizure of WaMu Bank by the FDIC, our clients were left with no ability to pursue claims directly against the Bank for their substantial losses and G&E filed claims against WaMu Inc., alleging that false and misleading statements made by WaMu Inc. induced our clients to purchase WaMu Bank notes at artificially inflated prices.  The Firm is currently engaged in litigation with WaMu over its clients’ claims and an objection to the WaMu plan of reorganization that challenges the plan’s proposed payment of prepetition interest as inconsistent with the language of Bankruptcy Code Section 510.

Delaware Chancery Court

On behalf of various institutional, charitable and other investment fund clients, G&E has commenced litigation in connection with the wind-up and liquidation of the Highland Credit Strategies and Highland Crusader funds, and the funds’ administrator JPMorgan.  G&E has alleged fraud and negligent misrepresentation against the Highland funds and their manager in connection with its clients’ investments in the funds, and has challenged aspects of the funds’ windup plans as inconsistent with governing Delaware law.

G&E attorneys filed claims on behalf of numerous clients in the chapter 11 case of Lehman Brothers, principally for amounts due under derivative contracts with various Lehman debtors, as well as representing a hedge fund client in defense and settlement of a turnover action initiated by the SIPA Trustee of Lehman Brothers, Inc.

Southern District of New York

The Firm recently concluded litigation (Rahl v. Bande, et al.,) for the court appointed Litigation Trustee for the Flag Litigation Trust, involved allegations that former officers and directors of Flag Telecom Holdings, Ltd., breached their fiduciary duties, and concealed and deepened the company’s insolvency to enhance their personal wealth.  The litigation trust was created as a result of the bankruptcy and subsequent reorganization of Flag, to house and pursue causes of action against Flag’s former directors and officers on behalf of Flag’s creditors.  The matter has settled with an eight-figure recovery for the Trust.

Southern District of New York

In re Parmalat Securities Litigation, G&E won a ground-breaking ruling in the Southern District of New York, which rejected the parent auditor’s attempt to deny responsibility for the misdeeds of its foreign “affiliate.”  The U.S. parent accounting firm advanced an argument, successful in many other cases, that it had no responsibility for the deficient audit (and resulting securities fraud liability) conducted by its foreign member firm.  The Parmalat decision, the first of its kind, held that the global accounting firm, through its U.S. parent, could be vicariously liable for the actions of its foreign member firms.  Further, as part of G&E’s lead counsel role in the case against Tyco, the Firm brought claims against Tyco’s former auditor PricewaterhouseCoopers for failing to detect fraud in the company’s financial statements over a multi-year period.  Ultimately, G&E was able to recover $225 million from PwC to settle claims, which marked the largest payment ever by an accounting firm in a securities class action.  And in In re Global Crossing Ltd. Securities Litigation, the Firm secured settlements from Global Crossing’s former auditor and former outside counsel.  And, in a case against KPMG relating to Oxford Health Plans, Inc., G&E recovered $75 million, one of the largest settlements ever by an accounting firm.

G&E represented funds managed by Franklin Advisers, Inc., Conseco Capital Management, Inc., Credit Suisse Asset Management, Pilgrim American Funds and Oppenheimer Funds, Inc. in a securities action against Styling Technology, asserting both federal (1933 Act) and state claims brought in the Superior Court of California.  At the time of the suit, Styling Technology was under Chapter 11 bankruptcy protection.  G&E was able to settle the case for a recovery representing more than half of its clients’ losses.