Since its inception Susman Godfrey has handled complex securities litigation. The cases would include, but by no means be limited to, dozens of shareholder class actions and derivative suits. The firm's decade-and-a-half of managing and trying complex securities cases clearly places it among the country's preeminent firms in this arena.
Susman Godfrey has handled several securities cases that resulted in substantial judgments for the plaintiff. For example:
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In August 2007, Susman Godfrey successfully represented a certified class of shareholders in a securities fraud action against Genzyme Corporation challenging the propriety under the federal securities laws of its elimination of the "tracking stock" of one of its divisions. The case settled in August 2007 with Genzyme agreeing to pay $64 million to the class. Susman Godfrey served as co-counsel for the class along with Boies, Schiller & Flexner and Kaplan Fox. Susman Godfrey partner, Vineet Bhatia, was lead trial counsel for the class.
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On November 29, 2005, Hon. T. John Ward entered an order and final judgment finally approving settlements in the Fleming Securities Class Action Litigation. Kenneth S. Marks of Susman Godfrey L.L.P. is Co-Lead Counsel in that litigation, along with Sherrie R. Savett of Berger & Montague, P.C. Johnny W. Carter of Susman Godfrey L.L.P. has also worked extensively on this litigation. The settlements total $94 million, or $73 million net of attorneys' fees. In late 2002, 15 securities class action lawsuits were filed against Fleming Companies, Inc., which at the time was one of the largest food wholesalers in the United States. In December 2002, Judge Ward appointed Mr. Marks and Ms. Savett to be Co-Lead Counsel, and the Judicial Panel on Multidistrict Litigation (JPML) subsequently transferred all cases to the Eastern District of Texas. In April 2003, Fleming Companies, Inc. declared bankruptcy and thereafter was liquidated. Plaintiffs pursued claims against former directors and officers of Fleming, Fleming's auditor, and underwriters of one of Fleming's public offerings. In June 2004, the Court largely denied motions to dismiss brought by several defendants, and the case subsequently was set for trial in March 2006. Over the course of 2005, Counsel for Plaintiffs negotiated separate settlements with each of the defendants.
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In February 2005, settled a securities fraud case against Waste Management, Inc. on behalf of shareholders who opted out of a federal class action settlement. We filed suit in Texas state court and developed theories of liability and evidence that had evaded the federal class plaintiffs and every other group of opt out plaintiffs in the country. A few weeks before trial, we settled the case for more than 40 times what our clients would have received in the class action settlement. At Waste Management's insistence, the actual amount of the settlement is confidential.
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In August 2003, Susman Godfrey won a $27.8 million award from a panel of arbitrators for its clients, James P. Hunter, III, and the James P. Hunter, III Family Partnership Limited. The award came in a securities arbitration against Service Corporation International, and certain of its current and former officers. Hunter's securities claims against Service Corp. arose out of the January 1999 merger of Service Corp. and Equity Corporation International. James Hunter was Equity Corporation International's CEO before the merger. The arbitration followed several years of jurisdictional challenges, in which Susman Godfrey handled separate appeals to both the United States Court of Appeals for the Fifth Circuit and the Texas Supreme Court. As Service Corp. disclosed in its SEC filings, the arbitrators ruled in favor of Susman Godfrey's clients on their claims under the Texas Securities Act and awarded them $27.8 million.
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In 2002 and 2003, Susman Godfrey obtained settlements in federal court in Chicago involving now-bankrupt wire distributor Anicom, Inc. Susman Godfrey was lead counsel for a joint prosecution group -- the State of Wisconsin Investment Board (on behalf of a shareholder class), the Anicom bankruptcy estate, and Anicom secured lenders. PricewaterhouseCoopers LLP agreed to pay $21.5 million to resolve lawsuits accusing the accounting firm of acting recklessly by certifying Anicom's financial statements during the years leading up to its January 2001 bankruptcy-court filing. According to the October 29, 2002, Wall Street Journal, the "payment is among the larger settlements to date over an alleged audit failure by PricewaterhouseCoopers." Certain officers and directors agreed to settle the case against them with over half of the amount paid by individual defendants -- not merely from D&O insurance.
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In October 2002, PricewaterhouseCoopers LLP agreed to pay $21.5 million to resolve lawsuits by Anicom Inc. shareholders and creditors who accused the accounting firm of acting recklessly by certifying the company's financial statements during the years leading up to its January 2001 bankruptcy-court filing. According to the October 29, 2002, Wall Street Journal, the "payment is among the larger settlements to date over an alleged audit failure by PricewaterhouseCoopers."
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On January 18, 2002, a $75 million settlement became final in the Alcatel securities litigation. The settlement was negotiated by Susman Godfrey L.L.P. and its co-lead counsel on behalf of a class of Alcatel shareholders. Susman Godfrey and its co-counsel aggressively pursued the case through discovery.
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With trial set for November 5, 2001, a settlement was reached in October 2001. Alcatel agreed to pay $75 million to the class. The Court approved the settlement and entered final judgment on December 18, 2001. The Court awarded attorneys' fees of $14,280,314.40 to counsel for the plaintiffs. Pursuant to an agreement with co-counsel, Susman Godfrey recovered $5,407,503.39 in fees. The settlement became final on January 18, 2002 because there were no appeals from the final judgment. Attorneys from Susman Godfrey representing the Alcatel class included Stephen D. Susman, Kenneth S. Marks, Barry Barnett, and Johnny Carter.
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In August 2001, Bergen Brunswig Corporation retained Susman Godfrey to bring Arthur Andersen LLP into litigation pending in Los Angeles Superior Court. The claims of Bergen Brunswig, one of the nation's largest drug wholesalers, arise from more than $200 million in losses sustained in connection with Bergen's acquisition of Stadtlander Drug Co., for which Arthur Andersen served as auditor.
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In January 2001, a federal court in Las Vegas, Nevada, granted final approval to settle a securities class action. The case involved allegations that Equinox International Corporation and its affiliates functioned as an illegal pyramid scheme. It settled after three weeks of trial. The settlement also imposes on defendants a permanent ban on operating any multi-level marketing company, rescission of all distributorship agreements with past and current Equinox distributors, and pro rata restitution to the class members of the funds they paid to Equinox.
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In November 1994, a jury in federal court in New York City awarded our client, investment banker Frank A. Benevento II, $14.2 million in damages against RJR Nabisco, Inc. The case involved a fee dispute arising from the largest corporate takeover in history, the 1988 leveraged buyout of RJR Nabisco that was the subject of the book and movie "Barbarians at the Gate."
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In 1992, the Delaware Supreme Court affirmed a $38 million award for 20,000 former shareholders of Shell Oil Company in a class action. As lead counsel, we tried the case in Delaware Chancery Court, which found that Shell's parent company breached a fiduciary duty in connection with the disclosure materials sent to the class as part of a cash-out merger.
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In 1989, after a jury trial, a federal judge awarded $37.7 million in damages against the accounting firm Laventhol & Horwath. The National Law Journal called this one of the 25 most significant verdicts of the year.
The firm has also obtained many pretrial settlements in excess of seven figures, including:
In derivative cases, the firm has often served as co-lead counsel in litigation resulting in settlements as high as $19 million in the General Electric litigation. Susman Godfrey attorneys have also participated in many appellate court arguments, from the early case of Paul F. Newton & Co. v. Pressman, Frohlich & Frost, 630 F.2d 1111 (5th Cir. 1980), which established the validity of the respondeat superior doctrine in securities cases, to Rubinstein v. Collins, 20 F.3d 160 (5th Cir. 1994), which affirmed the viability of the 10(b) cause of action even where defendants peppered their misleading statements with cautionary language.
WE'VE SUCCESSFULLY DEFENDED SECURITIES CASES, TOO
Although the cases mentioned above highlight only the plaintiff's side, the firm has also successfully defended many securities cases. For example, in In re Worlds of Wonder Securities Litigation, 814 F. Supp. 850 (N.D. Cal. 1993), aff'd, 35 F.3d 1407 (9th Cir. 1994), the firm obtained a summary judgment on behalf of a former director and others. Similarly, the firm obtained the dismissal of securities fraud allegations involving hundreds of millions of dollars against a major oil company.
PROXY CONTESTS, CONSENT SOLICITATIONS, AND BATTLES FOR CORPORATE CONTROL
In October 1995, Susman Godfrey obtained for its clients a preliminary injunction from the United States District Court for the Virgin Island (St. Croix) returning its clients to the Board of Directors and management of Atlantic Tele-Network, Inc., the holding company for the telephone companies in the Virgin Islands and Guyana. Susman Godfrey's clients had been ousted from the Board and management following another director's secret consent solicitation for control of the $150 million a year company.
*Results obtained depend on the facts of each case. Every case is different. Similar results may not be obtained in your case. Nothing on this web page is intended to represent that Susman Godfrey currently represents any particular clients mentioned because matters and client relationships naturally terminate from time to time.
Nothing on this web page is intended to represent that Susman Godfrey currently represents any particular clients mentioned because matters and client relationships naturally terminate from time to time.
The information contained herein is revised frequently and is only accurate and current as of the date printed above. Please call us for the most recent edition.
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