Clifford Chance (CC) has pledged to fight a $2bn (£966m) claim brought by the bankruptcy trustee overseeing the estate of DVI, a former
US client of the magic circle firm.
The claim, which emerged earlier this week in a report by Legal Week sister publication the New York Law Journal, was filed in the US in March 2006 by Dennis Buckley, who is overseeing the bankruptcy of the healthcare finance company.
Buckley is seeking compensation for the law firm’s alleged role in the collapse of DVI in 2003, which resulted in the company’s former chief financial officer, Steven Garfinkel, being sentenced to 30 months in prison earlier this year. But CC said in a statement that the claim is without merit and that the firm will fight it vigorously.
DVI’s main external adviser was CC New York M&A partner John Healy. Cooley Godward Kronish securities litigation partner William Schwartz is defending the London-based firm. It is the second claim that CC is facing relating to the DVI bankruptcy. The other is a shareholder class action which is also targeting Merrill Lynch and Deloitte. CC will also defend this claim.
The $2bn claim is thought to be one of the largest ever filed against a UK law firm. Other notable claims against UK firms include Hammonds’ £142m High Court battle relating to advice given to the Football League on its contract with defunct pay TV company ITV Digital.
Defunct German firm Haarmann Hemmelrath pinned the blame for its 2006 collapse on a former client’s Ä400m (£287m) negligence claim — which was the largest-known claim brought against a European firm. In the US, Mayer Brown is currently facing a $245m (£118m) claim, as well as a $2bn claim alongside a number of other advisers, in relation to the 2005 collapse of futures broker Refco.
More news, deals and comment on Clifford Chance
