A lawsuit brought in New York State Court by Schlam Stone & Dolan lawyers John M. Lundin and Samuel L. Butt on behalf of victims of a Ponzi scheme is gaining international press coverage. The Complaint in the lawsuit accuses almost 40 defendants located in Europe, the Far East, the Middle East and the United States of a variety of wrongs, including racketeering, fraud, unjust enrichment, fraudulent transfers and conveyances, breach of fiduciary duty and breach of contract. The focus of the lawsuit is a family of entities named Montague Morgan Slade, MMS and Mo-Mo Mama operated by Britons Anthony Heald and Gordon Spedding and American Michael L. Brown.
A motion to dismiss Schlam Stone & Dolan client AXA's lawsuit against ING Insurance International was denied by New York County Commercial Division judge Eileen Bransten. AXA alleges that ING misled it about the financial condition of a Mexican insurance company AXA bought from ING for $1.5 billion in 2008. Although AXA’s claim for punitive damages as well as another minor claim were dismissed, the lawsuit's core allegations of misrepresentation and breach of contract survive, as does AXA's request for a declaratory judgment concerning potential future losses. Schlam Stone & Dolan's AXA team is lead by partners Jeffrey Eilender, who argued the motion, John Lundin, and Erik Groothuis. AXA is also represented by attorneys from Mayer Brown, LLP.
Middleweight Marco Antonio Rubio filed an official protest against the result of his February 4, 2012, WBC championship bout. Rubio requests that the bout's result be set aside based upon the WBC's failure to drug test either boxer despite suspicious circumstances, specifically Julio Cesar Chavez, Jr.'s 22 lb weight gain in the 24 hours between the weigh-in and the fight. Rubio argues that such a large weight gain is evidence of use of prohibited diuretics. The protest has attracted media coverage in both the U.S. and Mexico.
Schlam Stone & Dolan partner David Katz was cited in a December 20, 2011 blog post in Truth On The Market written by Professor Larry Ribstein, the nation's foremost academic expert on the law of LLCs and other closely held entities. The article reports on the New York Court of Appeals' decision involving the fiduciary duties owed by organizers of New York LLCs to those they solicit to invest in the LLCs. Mr. Katz successfully convinced the Court of Appeals not to adopt a sweeping ruling reached by the lower appeals court holding that organizers of New York LLCs always owe fiduciary duties to those they solicit to invest in the LLCs based solely on their status as "promoters" of the LLCs.
Schlam Stone & Dolan partner Elizabeth Wolstein represents independent journalist Sergio Hernandez in a Freedom of Information Law (FOIL) action that seeks to shed light on the process used by New York City Mayor Michael Bloomberg to select publishing executive Cathie Black as New York City Schools Chancellor. The Mayor's Office denied a request by Mr. Hernandez, who at the time wrote for the Village Voice, for emails exchanged between the Mayor and Ms. Black (or their respective representatives) before the Mayor announced Ms. Black's selection in November 2010. Upon Schlam Stone & Dolan's filing of the case, Mr. Hernandez recounted in the Village Voice his efforts to obtain the records and the City's repeated and unexplained denials of his request.
On April 27, 2011, Schlam Stone & Dolan partner David J. Katz participated in an oral argument before the New York Court of Appeals, the state's highest court. The case is likely to redefine and clarify a significant issue in business law: the circumstances under which a fiduciary can void, on public policy grounds, a general release executed in favor of said fiduciary. In this case, Mr. Katz argued, the fiduciary failed to comply with his duty of disclosure prior to the execution of the release, and that voids the release. This is an issue that has divided New York's lower courts and that will have significant ramifications for the enforceability of settlements executed by New York fiduciaries. To view the twenty-minute oral argument, click the hyperlink below.
The American Muslim community's fears about stereotyping lie at the center of a recent landmark court case, Tabbaa v. Chertoff, involving 40 Muslims who were detained at the Canada – U.S. border when they tried to return from a conference. Exploring this case as part of its coverage of the atmosphere surrounding current Congressional hearings on the radicalization of Muslims, NPR's Dina Temple-Raston interviewed Schlam Stone & Dolan partner Mike Battle. Mr. Battle, who was United States Attorney for the Western District of New York, served successfully as prosecutor when the U.S. brought its landmark case against the Lackawanna Six in 2002. He has followed with interest the evolution of law and government policies affecting persons swept up in the politics of anti-terrorism. The Tabbaa case was brought by an American citizen and Muslim who crossed the border in December 2004 to attend a conference in Toronto. When he attempted to get home, Mr. Tabbaa and 39 others were detained at the border by U.S. border authorities and, they assert, illegally mistreated. Mr. Tabbaa lost the case and an appeal, but further related legal action, backed by the ACLU, is pending.
After an eight-day hearing, Schlam Stone & Dolan Partner Michael Battle, who had been appointed by the Mayor of Buffalo to preside over a removal hearing for Buffalo's Commissioner of Human Resources, issued his report and recommendation to the Mayor. Mr. Battle's report found that payment of insurance premiums on behalf of 170 dead retirees, at a cost of $839,688.18, constituted sufficient cause for firing the Commissioner. The Mayor adopted Mr. Battle's recommendation completely, and removed the Commissioner from her position. Schlam Stone & Dolan Counsel Vitali S. Rosenfeld and Schlam Stone & Dolan Associate David G. Abrams assisted Mr. Battle in this matter.
Three Schlam Stone & Dolan victories were in the top ten New York business divorce cases of 2010, according to www.nybusinessdivorce.com, a respected web blog on New York law regarding disputes between business owners. These were: (1) a New York County Commercial Division case where the judge dismissed a lawsuit brought by a former managing member of a New York LLC, finding as a matter of law that the plaintiff had been properly expelled for cause; (2) an Appellate Division Second Department case holding that courts may not expel a New York LLC member unless language in the LLC's operating agreement permits; and (3) an Appellate Division First Department order granting leave to appeal to the Court of Appeals on issues relating to the fiduciary duties of LLC organizers, and to New York's Martin Act.
When AXA Mediterranean Holding, a French unit of Spain's AXA SA, bought a Mexican insurance conglomerate, Seguros ING SA de CV (which it renamed AXA Seguros), from Dutch ING Groep's ING Insurance International for $1.5 billion in 2008 it didn't expect anything to go wrong. Nevertheless, the stock purchase agreement covering the deal prudently included clauses to protect the buyer . . . just in case. As things turned out, the just in case became a legal case when AXA sold one of Seguros' constituent businesses, the bond company AXA Fianzas (formerly ING Fianzas) to Afianzadora Sofimex. As the sale went forward, due diligence conducted by Sofimex exposed substantial misrepresentations by ING regarding Fianzas. In 2007, ING stated that Fianzas had been valued at $118 and $16