SGS specializes in complex commercial disputes involving securities, corporate governance, contracts, intellectual property (including patent infringement), land use, real estate and construction matters. Our attorneys prosecute and defend claims with a strategic, service-oriented approach. We work with our clients to develop the most effective litigation strategy for the dispute, whether the matter is before a court (federal or state), an arbitration panel, a government agency, or (as is often the case) some combination of these forums.
Representative Securities Litigation
The Outcome: SGS and co-counsel Husch Blackwell obtained a $24,850,000 settlement on behalf of a class of 94 investors in Curran et al v. Philadelphia Financial Life Assurance Co., et al. (Boulder District Court). The Case: Our clients, mostly retirement-aged individuals, exchanged conventional annuity investments for leveraged hedge fund instruments on the advice of an investment advisor and the Philadelphia insurance company involved in the instruments. The investments became worthless in 2008, as they were concentrated in Ponzi schemes such as the Madoff funds. The case was litigated for four years, and the defendants filed three interlocutory appeals during the process. The case settled on the eve of an eight-week jury trial.
The Outcome: A jury returned a unanimous verdict exonerating SGS’s clients of securities fraud. The Case: SGS defended a promoter of joint ventures and its chief executive officer in several private actions brought on the heels of enforcement actions by the Colorado Attorney General and other state regulators. In the first of these cases to be resolved, Barnhill v. HEI Resources, Inc., Charles Reed Cagle, Baker & McKenzie law firm, et al., the plaintiffs sued SGS’s clients (HEI and Cagle) and HEI’s former counsel (Baker & McKenzie) alleging that the joint ventures fraudulently offered unregistered securities. After a six-day jury trial, the jury returned a favorable verdict after deliberating less than three hours.
The Outcome: Successful settlement and completion of the merger between Qwest Communications and CenturyTel, Inc. The Case: SGS, working with the New York office of Wachtell, Lipton, Rosen & Katz, represented CenturyTel in the seven consolidated federal court putative class actions and six consolidated state court actions, all challenging CenturyTel’s then-pending $10.6 billion merger with Qwest. Plaintiffs alleged that CenturyTel aided and abetted Qwest’s board of directors in making inadequate and misleading disclosures in merger-related proxy statements. The matter was successfully settled, and the merger completed.
Representative Corporate Governance & Partnership Litigation
The Outcome: An American Arbitration Association panel dismissed all claims and awarded attorney’s fees to SGS’s client. The Case: SGS defended the manager of an energy partnership in a series of claims brought by a former co-manager and partner alleging fraud and breach of fiduciary duty under California and Delaware law in connection with a prior distribution, various rounds of investments in excess of $150 million, and the preparation for an initial public offering of a successor company on the New York Stock Exchange. SGS arbitrated the matter before a AAA panel in San Francisco in two phases over an eighteen-month period.
The Outcome: A Denver-based arbitrator dismissed all claims and awarded attorney’s fees and cost of special litigation panel inquiry to SGS’s client. The Case: SGS represented a limited liability company in this arbitration proceeding where the claimant alleged breaches of fiduciary duty and fraud against another member of the LLC. SGS prevailed in seeking a stay, the appointment of a special litigation panel, and the eventual dismissal of the action based upon the special litigation panel’s conclusions. Further, the arbiter ordered the claimant to pay to SGS’s client the legal fees for representation and for the work of the special litigation panel.
Representative Commercial Litigation
The Outcome: The Supreme Court in Manhattan denied SGS’s opponent’s motion for a $22.6 million prejudgment attachment and granted SGS’s motion to dismiss in a case involving New York’s version of the Uniform Foreign-Country Money Judgments Act. The Case: The plaintiff had obtained a $500 million order of reparation against the never-served co-defendant of SGS’s client through an in absentia criminal proceeding in the Czech Republic. Plaintiff then sought to have the New York court domesticate the Czech judgment, and to enforce it against SGS’s client on the alleged ground that it is the co-defendant’s alter ego. Among other things, the court held that genuine questions exist whether the Czech judgment is recognizable in New York, hence the plaintiff did not show that it probably would succeed on the merits of its action.
The Outcome: SGS obtained a significant judgment in favor of its client in a breach of contract claim involving a commercial real estate partnership. The Case: The general partner was obligated by the terms of the partnership agreement to buy out the interest of SGS’s client, yet the general partner engaged in a manipulative appraisal process that undervalued the partnership. The court awarded actual damages and prejudgment interest.