Dec 30 (Reuters) – A federal judge has rejected Wachtell, Lipton, Rosen & Katz’s bid to dismiss CVR Energy Inc’s lawsuit accusing the prominent New York law firm of malpractice in advising on a 2012 hostile takeover of the oil refiner by billionaire Carl Icahn. U.S. District Judge Richard Sullivan in Manhattan declined to end the federal case even though a New York state judge has been overseeing two related lawsuits, including the malpractice issue, and might manage the litigation more efficiently. Calling it a “close call,” Sullivan said he was bound by U.S. Supreme Court precedent giving federal courts a “virtually unflagging obligation” to exercise jurisdiction, “although this approach will undoubtedly result in two courts considering the same action at the same time.” Sullivan’s decision was dated Dec. 29 but was made public on Tuesday. CVR had accused Wachtell of failing to disclose that the company’s financial advisers, Goldman Sachs Group Inc and Deutsche Bank AG, stood to earn far higher fees if the takeover defense failed than if it succeeded. The banks sued CVR in a New York state court in Manhattan after the company, by then controlled by Icahn, refused to pay those fees. Wachtell later filed a lawsuit in the same court accusing CVR and Icahn of breach of contract and abuse of process. CVR then filed a malpractice counterclaim in that case. Icahn has been a frequent opponent of the Wachtell firm in takeover battles. On Sept. 8, Justice O. Peter Sherwood, who has overseen both state lawsuits, ordered CVR to pay Goldman and Deutsche Bank more than $36 million, a decision CVR is appealing. Then on Sept. 30, he rejected CVR’s bid to dismiss Wachtell’s lawsuit. A conference in that case is set for Jan. 13, 2015. Wachtell declined to comment on Sullivan’s decision. Herbert Beigel, a lawyer for CVR and longtime lawyer for Icahn, said the Sugar Land, Texas-based company is “very pleased” with Sullivan’s decision, which “upholds CVR’s fundamental right to have its case heard in federal court.” Icahn won an 80 percent stake in CVR after a majority of shareholders accepted his $30 per share tender offer, which valued the company at about $2.6 billion. The case is CVR Energy Inc v. Wachtell, Lipton, Rosen & Katz et al, U.S. District Court, Southern District of New York, No. 14-06566. (Reporting by Jonathan Stempel in New York; Editing by Dan Grebler) bit.ly/1Hfszhw jobssprocket
Posted on: Tue, 30 Dec 2014 21:53:26 +0000
Trending Topics
Recently Viewed Topics
© 2015