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For many years, we have built an international reputation for handling director and officer liability, professional liability, and insolvency-related cases. We have prosecuted these cases around the world, including courts in New York, Chicago, San Francisco, Los Angeles, Miami, Las Vegas, Dallas, Austin, San Antonio, Houston, the UK, Canada, Mexico and the Cayman Islands. Most of these cases began with an investigation into the collapse of a business entity, so we long ago began describing them as "who-killed-the-company" cases.
Since our formation, we have been involved in some of the largest insolvency matters in the world. Currently, we act as lead counsel for the liquidators of three Cayman Islands companies wiped out by the collapse of the multi-billion-Euro Parmalat consumer foods empire, headquartered in Italy. We have brought multiple cases against Bank of America and Grant Thornton International in various jurisdictions. These cases have been consolidated with a variety of other cases against these defendants and others in a Multidistrict Litigation before the U.S. District Court for the Southern District of New York. Collectively, these companies seek over a billion dollars in damages.
Additionally, we were recently hired to act as special litigation counsel for the Trustee of the Post-Confirmation Liquidating Trust of the USA Commercial Mortgage, which involves an alleged $900 million ponzi scheme. Over the past several years, we have been involved in Bayou Funds, Enron, Southeast Bank, Inverworld, Livent, and other prominent cases in the insolvency arena. We also are involved in a variety of projects relating to the recent collapse of the sub-prime market.
In all of these cases, we help our clients discover what went wrong, whether any persons or groups (including officers, directors, accountants, lawyers, and investment advisors) acted improperly to cause that collapse, where the money went, and what recourse our clients may have as casualties of a corporate collapse. If our investigation determines that genuine liability and collectible damages are present, we help our clients recoup their losses. If not, we are the first to tell them they would be better off using their (often fiduciary) funds in other ways.
We have repeatedly achieved multi-million dollar recoveries for our clients. And although the complex nature of the legal challenges we take on means we can never guarantee a result, our lawyers’ nearly two decades of experience in complex insolvency and business litigation helps steer us to the cases where we can best help our clients. The following are a few examples of our significant representations in this area, all of which resulted in substantial recoveries for the estates in question and their creditors:
Zale/Jewel Recovery
Diamond McCarthy lawyers represented the Trustee for Jewel Recovery, L.P., the Zale Jewelers post-confirmation litigation entity. We handled all post-confirmation litigation brought in connection with the Zale bankruptcy, and also were involved in the structuring of the litigation trust itself. Zale was (and remains) one of the world's largest jewelry companies. This engagement involved the management of hundreds of suits in bankruptcy and other courts in the U.S. and Canada, and the resolution of complex questions of liability and damages relating to company officers and directors, the Big-4 auditors and Wall Street law firms who served them, and their D&O and E&O insurers. Most of these suits were brought in the Northern District of Texas.
Southeast Bank
Diamond McCarthy represented the Chapter 7 Trustee for Southeast Banking Corporation, the parent of what was once the largest bank in the Southeast. We handled the investigation and prosecution of all civil claims against the former officers and directors of Southeast Bank, as well as the claims against its Big-4 auditors and national law firms. The bulk of these suits were brought in the Southern District of Florida.
Inverworld
Diamond McCarthy represented the Chapter 7 Trustee for Inverworld, one of the largest providers of brokerage and securities services in Latin America, in connection with litigation against the company’s former officers and directors, along with the professionals that advised them. We simultaneously represented of a group of 1,100 Inverworld investor/creditors against the same parties, to the extent they held individual claims against such defendants. The litigation primarily was conducted in Texas state and federal courts in San Antonio, but also involved parallel proceedings in the Cayman Islands. The cases involved the investigation and prosecution of claims relating to an international ponzi scheme, and also concerned misrepresentation and negligence claims against Inverworld’s Big-4 auditors and national law firms. In addition to director, officer and professional claims, the cases also included actions against various international banks with connections to Inverworld’s alleged activities.
Livent
Diamond McCarthy represented the Creditors Committee of Livent, Inc., along with various institutional investors, in connection with the Livent litigation and bankruptcy in the Southern District of New York. This representation included bringing (1) a securities fraud class action on behalf of institutional and individual holders of notes issued by Livent; and (2) a parallel and reinforcing equitable subordination action brought against Livent's lead lender, on behalf of the Creditors Committee. Although most of the related proceedings were prosecuted in the Southern District of New York, this dispute also involved parallel proceedings in Canada.
Precept
Diamond McCarthy successfully represented the Chapter 7 Trustee for Precept Business Services, Inc. in bankruptcy litigation in the Northern District of Texas against the officers, directors and professionals of the Precept Debtors. In that litigation, the team prosecuted not only the usual estate and generalized creditor claims, but also pressed secured lender claims that had been assigned to the estate by a national bank. Like many of our engagements, this one began with a formal investigation into all areas of potential liability, and eventual claims against directors, officers, Big-4 auditors, and a regional law firm.
AgriBioTech
Diamond McCarthy represented the Trustee of AgriBioTech, Inc., a former Las Vegas, Nevada publicly traded company, in connection with the investigation and prosecution of officer and director breach of fiduciary duty claims, software implementation breach of contract claims, accounting and other professional negligence and fraudulent transfer claims in the United States District and Bankruptcy Courts in Las Vegas, Nevada.
Enron
Diamond McCarthy represented the LJM2 Creditors Liquidation Trust in pursuit of malpractice claims against a national law firm and a Big-4 auditor. Despite LJM2’s rather conspicuous role in connection with the overall Enron fraud, we were able to negotiate very favorable pre-suit settlements for LJM2’s estate and its creditors. We pursued these suits primarily in the Southern District of Texas.
Friede Goldman
Diamond McCarthy acted as special counsel to the Creditors Committee in the Friede Goldman Halter bankruptcy in the Southern District of Mississippi, and to its successor liquidating trust. In that role, we were charged with investigating and, where appropriate, prosecuting litigation against the officers, directors and professionals who once served the Friede Goldman companies. We brought major actions against certain former officers, directors, and professionals of Friede Goldman in various venues throughout the south.
Parmalat
Diamond McCarthy currently represent the Joint Official Liquidators for several companies in the Cayman Islands in connection with the collapse of Parmalat, the Italian international food conglomerate. Massive MDL proceedings in the case are pending in the Southern District of New York, with related proceedings pending in North Carolina, Illinois, the Cayman Islands, Milan, Parma, and various other jurisdictions throughout the world. This on-going matter involves damages exceeding a billion dollars.
USA Capital
Diamond McCarthy currently represents the post-confirmation liquidating trustee in the USA Capital bankruptcy in Las Vegas, Nevada. This case involves a $960 million ponzi scheme related to the management of a sub-prime mortgage servicer. Our representation involves the investigation of potential litigation claims involving hundreds of millions of dollars in damages, and the eventual prosecution of any claims against third-parties that our investigations support. To date, litigation in the case has been brought in the federal courts of Las Vegas, Nevada.
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The attorney responsible for this website is William T. Reid, IV |
The lawyers resident in all offices, unless otherwise indicated, are not certified by the Texas Board of Legal Specialization.
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