In 2002, a private customer of Bank of America entered into a “cashless collar” transaction with the bank on 500,000 shares of Dreyer’s Ice Cream, Inc., at the time a publicly traded company of which the customer’s beneficiary was a senior executive and major shareholder. Just a few months later, Dreyer’s was acquired by Nestle in a share-for-share transaction and the bank’s derivatives traders adjusted the strike prices of the embedded options to reflect the decreased volatility of the Dreyer’s shares as a result of the Nestle deal. The customer sued the bank in New York state court alleging that the adjustment breached the collar transaction agreements.
During a two-week bench trial in June of 2006, the judge heard extensive testimony from both sides, including expert testimony on the interpretation of ISDA documents governing the derivatives transaction called a “cashless collar.” In its November 13, 2008, opinion, the Court concluded that our client, Bank of America, had acted within the scope of the discretion granted by the transaction documents to make adjustments to the strike prices of the options in the event of such a merger, and it dismissed the customer’s claims in full.
The Davis Polk trial team was lead by partner Robert F. Wise Jr. and included former associate Thomas Childs, associates Hayward H. Smith and Ciaran P.A. Connelly, and former summer associates Elyse Jones Cowgill (now an associate), Russell Maxwell and Nicole Vanatko (now an associate).
Davis Polk & Wardwell, in conjunction with the Asian American Legal Defense and Education Fund (“AALDEF”), won a judgment in excess of $4.6 million on behalf of 36 current and former employees of Saigon Grill, a popular Vietnamese restaurant with locations on the Upper West Side and near Union Square. The judgment, which follows a five-day bench trial in June in the US District Court for the Southern District of New York, holds Saigon Grill and its owners and managers responsible for failing to pay its delivery workers in compliance with federal and state labor laws over the last decade.
The plaintiffs—35 delivery workers and one employee who packed delivery orders—are all immigrants from China’s Fujian Province whom Davis Polk is representing pro bono. Without knowledge of their legal rights, the workers were paid well below the minimum wage, in some cases less than $2.00 an hour, and did not receive overtime compensation for workweeks that lasted as long as 80 hours. Twenty-two of the delivery workers were fired in March 2007 in retaliation for planning to bring this lawsuit. In addition to awarding plaintiffs approximately $4.6 million for wage-and-hour violations, the court also found that defendants illegally retaliated against the 22 plaintiffs who were fired from their jobs as delivery workers when the defendants learned that they were planning to bring this lawsuit. Damages on these retaliation claims will be determined in a later proceeding.
“Today’s ruling vindicates the rights of some of New York’s poorest and most vulnerable individuals to be treated justly in the workplace,” said Ronnie Abrams, Special Counsel for Pro Bono at Davis Polk. “We’re proud to have obtained a measure of justice for these mistreated workers.”
“We are thrilled with the court’s decision,” said Sharon Katz, a partner at Davis Polk and co-head of the firm’s Pro Bono Committee. “This is not only a well-deserved victory for the workers at Saigon Grill, but also will serve as an important precedent for future cases brought on behalf of underpaid workers.”
The Davis Polk trial team included associates Jonathan L. Adler, Matteo J. Rosselli, Edward Sherwin and William R. Miller Jr. These lawyers received assistance before and during trial from partner Brian S. Weinstein, Special Counsel for Pro Bono Ronnie Abrams and Kenneth Kimerling of AALDEF. Summer associates Matthew Jacobs and Gerald Moody, legal assistants Charles Seidner, Jonathan Reiss, and Christina Chang, and summer legal assistant James Giampietro also assisted throughout the trial. Associates Brenda Chen and Jessica L. Freese also assisted before trial. All members of the Davis Polk team are based in the New York office.
The US District Court for the Western District of Texas dismissed a consolidated securities class action against our client PricewaterhouseCoopers (PwC) with prejudice. This suit stemmed from a 2006 SEC investigation into Dell accounting irregularities, escalating into a formal investigation a few months later, including one by Dell’s Audit Committee. As a result, Dell restated four years of its financial statements and numerous securities class action lawsuits were filed against Dell, its officers and directors, as well as PwC, Dell’s outside auditors during the entire period.
In dismissing plaintiffs’ claims against PwC, the court accepted all of the arguments Davis Polk lawyers put forth as to why the consolidated complaint was deficient as to PwC. The court held that neither the restatements, the allegations regarding various GAAS and GAAP errors, the claims about PwC ignoring red flags, the alleged independence violations, nor allegations regarding PwC’s pattern of misconduct, either individually or taken together, satisfied the standard for pleading scienter against an auditor. In addition, the court held that the complaint failed to plead loss causation as to PwC. Finally and importantly, the court accepted Davis Polk’s argument that the case should be dismissed with prejudice and that leave to amend should be denied because plaintiffs failed to identify what additional facts they would assert if given that opportunity.
The team who worked on the motion included partners Michael P. Carroll and Michael S. Flynn, counsel Gina Caruso and associates Russell Capone, Kathryn Carney Cole and Alex Reisen. Other members of the larger Dell-related team, associates Sheldon L. Pollock, Sheila Vera Barrett and Matteo J. Rosselli, also provided assistance. All Davis Polk team members are based in the New York office.
Davis Polk achieved a significant victory in California state court for its client, AstraZeneca LP, and on behalf of 16 other major pharmaceutical companies and PhRMA, the pharmaceutical industry trade association. In Clayworth v. Pfizer, the California Court of Appeals answered a previously open question of California antitrust law: “Whether the pass-on defense is available to defendants accused of price fixing.” In a 41-page opinion, a unanimous panel of the First District Court of Appeals in San Francisco held that it is, and affirmed summary judgment for AstraZeneca and the other defendants. Davis Polk partner William J. Fenrich argued on behalf of all defendants at both the trial court and the Court of Appeals.
In its decision, the court adopted virtually all of the arguments advanced by the defendants. Perhaps most importantly, the court did not limit its ruling to cases where the plaintiffs have admittedly absorbed no overcharges. Thus, in the future, defendants who are accused of price fixing in California by anyone other than ultimate consumers (who do not pass-on) should be able to rely on Clayworth’s holding to reduce the amount of damages for which they can be held liable.
The Davis Polk team included partners Arthur F. Golden and William J. Fenrich as well as associates Daniel J. Schwartz, Sandra West, Ronja Bandyopadhyay, Amitabh Chibber, former associate Nicholas William Haddad and legal assistant Leah K. Edwards.
Today the Court of Appeals for the Second Circuit issued a decision affirming District and Bankruptcy Court decisions granting a petition by the board of directors of Telecom Argentina under former Section 304 of the Bankruptcy Code. In the face of a national economic crisis in Argentina, Telecom Argentina had commenced reorganization of its US$3.3 billion of unsecured financial debt, some of which was registered in the US. Telecom Argentina ultimately filed an acuerdo preventivo extrajudicial, or APE, insolvency proceeding in Argentina that resulted in approval of a reorganization plan that addressed all of its unsecured financial debt and was approved by most of its holders. However, one holder contended that it was entitled to payment in full of debt registered in the US. Telecom Argentina commenced a proceeding under Section 304 seeking enforcement in the US of its APE plan. Recognition of the plan was granted after a trial in the Bankruptcy Court. The Bankruptcy Court's decision that the APE proceeding was fair and entitled to recognition as a matter of comity was affirmed by the District Court, and ultimately by the Second Circuit. The Second Circuit firmly rejected the claim that the US Trust Indenture Act requires payment in full to holders of debt registered in the US.
Telecom Argentina is the fixed-line operator of local and long-distance services in northern and southern Argentina.
The Davis Polk litigation team, for both the trial and the appeal, included partner Karen E. Wagner and associate Jordan Leigh Smith, both from the New York office. Partner Julia K. Cowles of the Menlo Park office handled Telecom Argentina's complex corporate reorganization.
As reported in the March 4, 2008 Securities Law Daily, Davis Polk achieved a victory on behalf of its client, Credit Suisse, in a case relating to analyst research coverage. In In re Credit Suisse First Boston Corp. (Lantronix, Inc.) Analyst Securities Litig., 03 Civ. 2467, the plaintiff alleged that a research analyst issued allegedly false and misleading analyst reports regarding Lantronix, Inc.
Although the US District Court for the Southern District of New York certified a class last year, Credit Suisse moved for reconsideration in light of the Second Circuit’s decision in Miles v. Merrill Lynch, which held that courts must consider and resolve merits issues to the extent that they are necessary to making the required certification determinations under Federal Rule of Civil Procedure 23.
After a full-day evidentiary hearing, the district court granted defendants’ motion for reconsideration and decertified the class. Largely tracking Credit Suisse’s arguments, the court held that the plaintiff had failed to make a sufficient showing that the relevant research reports had any impact on Lantronix’s stock price and, even if they had, such effect had dissipated long before the close of the proposed Class Period.
The Davis Polk team included partners Lawrence Portnoy and Avi Gesser, associates Willow D. Crystal, Daniel J. Schwartz, Anna Thea Bridge, Dharma Betancourt Frederick, George Sirignano, Nicholas William Haddad, Melissa Oliver, former associates Catherine Lifeso and Erik M. Zissu, and legal assistant Kaitlin Harvie.
 |
 |
