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Financial and Regulatory Litigation WHEN IT COUNTS

Barnes & Thornburg's securities litigators have tried securities fraud, securities enforcement, and corporate control cases to verdict. We have been involved in some of the largest and most complex cases of the last decade - including Enron, Global Crossing, litigation arising out of the Madoff and Petters Ponzi schemes, and others. Perhaps more importantly, we will handle your case with an eye to the costs and benefits.

Whether by managing costs through the motion to dismiss in order to preserve your self-insured retention, pairing with our insurance coverage colleagues to help make certain the claims against you are covered, or engaging in early-case assessment to determine whether your case should be settled, we will combine our years of experience with common-sense in order to help you find a pragmatic and cost-effective solution to your legal challenges. In addition, we work closely with our corporate securities and corporate governance colleagues, when the need arises, to address various issues (including potential reforms as part of the settlement process).

Learn more about our securities and capital markets and corporate governance practices. You can also visit our blog, Government Enforcement Exposed, for updates on important trends, legislation and legal issues related to the efforts of the many regulatory enforcement agencies at all levels of government.

A partial list of our representative experience includes:

Securities Fraud Class Actions and Shareholder Derivative Suits

Barnes & Thornburg attorneys have managed the defense of securities fraud class actions and derivative suits on behalf of Fortune 500 companies, financial institutions, and the officers and boards of such companies. Attorneys also have represented underwriters and auditors with primary violation and aiding and abetting claims.

Firm attorneys have participated in all aspects of securities litigation, including class certification and expert opinions on loss causation and damages, in cases involving auction rate securities, alleged accounting improprieties, missed projections, restatements, allegations of fraudulent business models, and the failure to meet Wall Street's expectations.

Investigations and Enforcement Actions

Firm attorneys have handled formal and informal government investigations by the Securities and Exchange Commission, the Department of Labor, the United States Postal Service, the Department of Justice, the Internal Revenue Service, the United States Senate, the United States House of Representatives, and the Federal Bureau of Investigation, the PCAOB, various exchanges, self-regulatory organizations and state regulators.

In addition, firm attorneys frequently handle enforcement actions brought by regulators and disciplinary hearings brought by self-regulatory organizations. We have represented a number of clients in such cases, including those involving defendants exposed to parallel proceedings involving both civil and criminal penalties. In such cases, we work hand-in-hand with our colleagues in the White Collar Crime Group.

Securities and Commodities Industry Regulation and Litigation

Our litigators routinely represent futures commission merchants, broker-dealers, investment advisers, commodity trading advisors, commodity pool operators and other industry members in private litigation, arbitrations and regulatory investigations and enforcement actions. Whether it involves defending a broker-dealer in a three-month jury trial of a securities fraud class action, representing an underwriter in a class action under the federal securities laws, or defending an SRO disciplinary hearing, Barnes & Thornburg LLP trial attorneys have wide-ranging experience defending securities industry members against allegations of all types. Such allegations include claims of securities or commodities fraud, state racketeering violations, net capital violations, ERISA violations, failure to register, churning/reverse churning, failure to supervise, unauthorized trading, anti-money laundering violations, U-5 defamation, selling away, misuse of customer funds, improper accounting, failure to supervise, and a host of other regulatory violations.

Corporate Governance and M&A Litigation

Companies, banks and their directors and officers can become the subjects of a wide array of corporate related actions. Receiving counseling from an experienced team of legal advisors can make a difference. Barnes & Thornburg LLP attorneys regularly guide such parties through the maze of issues related to a number of these actions, including breach of fiduciary duty claims arising out of the failure of a bank or business, disputes among partners, the prospective sale of a company, allocations in an investment portfolio, or even an attempted hostile takeover of a company.

In FDIC actions, the firm represents financial institution officers and directors with claims against them. Barnes & Thornburg LLP currently represents and counsels various directors of failed or stressed banks, assisting them in responding to FDIC inquiries and claims of indemnity. In addition, the firm also works with bank management in interpreting insurance policies and securing coverage for claims brought by the FDIC and related bank regulators against the banks officers and directors. Because we are both litigators on behalf of financial institutions and insurance coverage advisors, we provide an added dimension in understanding the issues at stake and making sure management is protected to the greatest extent possible.

With respect to fiduciary duty litigation in the mergers and acquisition context, Barnes & Thornburg LLP attorneys have pursued and defended expedited litigation in the Delaware Court of Chancery on behalf of minority shareholders in merger transactions that would allegedly improperly freeze out or otherwise disadvantage the minority shareholders. We use our own Delaware office, to obtain the most cost-effective results possible.

Practice Leaders

Anne  De Prez

Anne N. DePrez

Of Counsel (Retired)
Financial and Regulatory Litigation Group Co-Chair


P 317-231-7264

F 317-231-7433

Trace Schmeltz

Trace Schmeltz

Financial and Regulatory Litigation Group Co-Chair

Chicago, Washington, D.C.

P 312-214-4830

F 312-759-5646

  • A Barnes & Thornburg attorney acted as co-counsel for Merrill Lynch & Co.. The Court affirmed the dismissal of fraud and breach of fiduciary duty claims against Merrill Lynch brought by former directors arising out of a limited fairness opinion issued in connection with a proposed acquisition. Massey v. Merrill Lynch & Co., Inc., 464 F.3d 642 (7th Cir. 2006).
  • A Barnes & Thornburg attorney defended a broker-dealer in a class action alleging that its sales training caused its registered representatives to fraudulently minimize risk on mutual fund and limited partnership investments. After partial verdicts for only three out of over 35 named plaintiffs, plaintiffs voluntarily decertified class.
  • A Barnes & Thornburg attorney defended a majority shareholder of privately held radio station in lawsuit brought by dissident minority shareholder premised on minority oppression. Defended oppression claim and prosecuted counterclaim against minority shareholder for converting corporate assets. Case settled with buyout of minority shareholder on favorable terms.
  • A Barnes & Thornburg attorney defended an agricultural cooperative against claims of fraud and violations of the Commodity Exchange Act asserted on behalf of putative classes in two cases regarding hedge-to-arrive contracts.
  • A Barnes & Thornburg attorney defended disinterested directors who approved a going private transaction against claims of breach of fiduciary duty and violation of section 14(d)(4) and 14(e) of the Securities Exchange Act of 1934. After a request for preliminary injunction was defeated in Indiana state court, that action and the other seven that had been filed in state and federal court were dismissed.
  • A Barnes & Thornburg attorney represented investment representative in “forgivable” loan matter. The Court of Appeals affirmed vacating cognovit note judgment against brokerage firm employee based upon a “forgivable” loan. The court held that by making the arbitration provision of the National Association of Securities Dealers a prerequisite for employment, the brokerage firm was barred from seeking a cognovit judgment in court when the broker terminated his employment. McDonald Investments, Inc. v. Fearn, 2002 WL 334882, 2002-Ohio-898, Ohio App., 5th Dist. (This matter occurred prior to the attorney joining Barnes & Thornburg LLP.)
  • A Barnes & Thornburg attorney represented a broker-dealer in a putative class action alleging that the client had sold non-exempt securities that were not registered as required under the Indiana Securities Act and obtained a voluntary dismissal of those claims.
  • A Barnes & Thornburg attorney represented a broker-dealer in connection with investigations conducted by SEC, NASD, NYSE and several state securities regulators in connection with multiple claims of churning and unsuitable and unauthorized trades against registered representative. No action was taken against broker-dealer.
  • A Barnes & Thornburg attorney represented a broker-dealer in federal court proceeding brought by customers seeking to vacate an arbitration award rendered in NASD (National Association of Securities Dealers) arbitration proceedings. Worthington Venture Fund, Inc. v. Public Securities, Inc., Case No. C-2-02-CVH-505 (S.D. Ohio 2004). (This matter occurred prior to the attorney joining Barnes & Thornburg LLP.)
  • A Barnes & Thornburg attorney represented a financial advisor in a state enforcement action brought against broker-dealer and several of its financial advisors. The State of Missouri voluntarily dismissed actions against the Firm’s client.
  • A Barnes & Thornburg attorney represented a financial advisory services corporation in usury analysis of previous contracts, as well as usury corrective activities. The attorney analyzed previously executed loan agreements and devised a strategy to allow for enforcement of those agreements without exposing the client to liability for the usurious contracts. The client ultimately received a judgment for the amount it sought under the agreements. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a firm client in a Rule 10b-5 securities fraud case. The client received a multi-million dollar settlement. Sequel Capital LLC v. Rothman, No. 1:03cv678 (N.D. Ill., filed Jan. 29, 2003).
  • A Barnes & Thornburg attorney represented a former CFO in securities fraud class action brought against issuer and its officers.
  • A Barnes & Thornburg attorney represented a former controller in derivative litigation brought against officers of corporation for allegedly causing or allowing corporation to violate the securities laws.
  • A Barnes & Thornburg attorney represented a large international exchange in antitrust regulatory compliance in connection with a complex cross-border merger. The client conducted extensive fact discovery and information sharing with the government related to the proposed deal. The merger was ultimately approved by the U.S. Department of Justice. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a major German bank in relation to securities issued through various Delaware entities. The bank was sued by investors claiming that the securities were to be given certain preferential treatment by the bank. The attorney devised a strategy to combat the claims and was successful in ultimately reducing the bank’s exposure. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a publicly traded Chinese company in obtaining recovery of substantial defense fees and costs arising from multiple class actions, derivative action and governmental investigations. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a publicly traded company in the health care industry in a seven-figure recovery of settlement payment and defense costs in derivative action under general liability and directors and officers policies. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a publicly traded company in the recovery of defense costs and settlement payments in connection with a securities class action and derivative action. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a publicly traded footwear company in substantial recovery under patent and trademark coverages in connection with litigation in the U.K. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a real estate investment entity in litigation against the operating partners of a profitable oil and gas servicing company. The investors suspected foul play on the part of the operating partners and brought suit. The Barnes & Thornburg attorney successfully procured a temporary restraining order on behalf of the investors, giving them control over the companies’ funds and, following the depositions of the operating partners by the attorney, procured a favorable settlement that resulted in the departure and replacement of the operating partners. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented a relief defendant in injunctive action brought by Securities and Exchange Commission in connection with a Ponzi scheme. Securities and Exchange Commission v. Cummings, Case No. C2-02-629 (S.D. Ohio 2004). (This matter occurred prior to the attorney joining Barnes & Thornburg LLP.)
  • A Barnes & Thornburg attorney represented a shareholder in an action of unpaid wages brought by former employees against shareholders of the corporate employer. Both the trial court and the Seventh Circuit on appeal held that, while New York law under certain circumstances allows former employees to recover against the largest shareholders of a New York corporation, penalties authorized under Indiana law cannot be recovered from shareholders using that statute. Whitely v. Moravec, 635 F.3d 308 (7th Cir. 2011).
  • A Barnes & Thornburg attorney represented an insurance company in a case involving alleged failure to register securities and failure to deliver prospectuses. The Illinois Securities Department voluntarily dismissed the claims.
  • A Barnes & Thornburg attorney represented an oil company in obtaining multi-million dollar payment of defense fees under multiple directors and officers liability policies. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented customers in arbitration. An arbitration award of $368,000 was granted to investors against broker and broker-dealer based upon claims of suitability, churning, negligence, and breach of fiduciary duty.Collins v. SG Cowan Securites Corp., NASD Case No. 01-01873. (This matter occurred prior to the attorney joining Barnes & Thornburg LLP.)
  • A Barnes & Thornburg attorney represented one of the world’s largest banks in suits in Texas and New York state court to recover funds loaned to hedge funds through standard form contracts and complex derivatives vehicles. The funds claimed that the bank could not recover as a result of the financial crisis, rendering any damage claim moot. After discovery and a favorable summary judgment ruling, the bank received a favorable settlement on the eve of trial. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented the audit committee of a large financial institution in proceedings brought by a litigation trust following the bankruptcy of that institution. The trust alleged that the audit committee breached its fiduciary duties by not disclosing certain deals to investors and to the public. Within eight months of the case being filed, it was settled with a favorable outcome for the members of the audit committee. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney represented the officers and directors of a hospitality company in a multi-million dollar recovery under a directors and officers liability policy in connection with a derivative action. (*This matter occurred prior to joining Barnes & Thornburg.)
  • A Barnes & Thornburg attorney served as co-counsel for underwriter defendants in a series of securities fraud class actions filed in 2000. In re Conseco, Inc. Sec. Litigation., No. IP 00-585-C-Y/S, IP 00-655-C-Y/S (S.D. Ind. 2000)
  • A Barnes & Thornburg attorney served as co-counsel representing an issuer of residential mortgage back securities against federal and state securities laws claims and achieved a favorable pre-trial resolution of claims. Federal Home Loan Bank of Indianapolis v. Banc of America Mortgage Securities, Inc., et al., Case No. 49D05-1010-PL-045071 (Marion Superior Court, Indiana).
  • A Barnes & Thornburg attorney successfully defended a self-directed IRA custodian in in an administrative enforcement action filed by the State Securities Commissioner, in which the client was alleged to be operating as an unregistered broker-dealer. The client's motion for summary judgment was granted and all claims were dismissed.
  • A Barnes & Thornburg attorney successfully prosecuted securities counterclaim in connection with securities fraud case. Zaghi v. Circle Group Holdings, Inc., No. 1:05cv7214 (N.D. Ill., filed Dec. 27, 2005).
  • A California Superior Court denied a motion for preliminary injunction seeking to enjoin the merger of an Indiana publicly held company. The court later dismissed damage claims against the company’s directors. In connection with both actions, the court determined that Indiana’s Business Corporation Law prohibits shareholder litigation challenging mergers.
  • Barnes & Thornburg assisted one of the parties to a $2 billion acquisition in successfully resolving claims that the acquirers had aided and abetted the breaches of fiduciary duty by the directors of the company to be acquired. The settlement provided for certain additional disclosures in the proxy statement of the acquired company and a payment of attorneys’ fees that were set by the Delaware Court of Chancery, and allowed the acquisition to close on time.
  • Barnes & Thornburg attorneys defended directors of an Indiana corporation in derivative suit brought in New York state court. On behalf of client, the firm obtained dismissal of the action on grounds of forum non conveniens.
  • Barnes & Thornburg attorneys pursued a series of claims, in the Delaware Chancery Court, on behalf of a common shareholder client whose ownership was being eliminated through a $300 million merger that benefitted only the preferred shareholders and the directors they controlled. Although the merger was not able to be blocked, the firm assisted the client in obtaining a substantial settlement.
  • Barnes & Thornburg attorneys represented a corporation, its directors and its investment banker and were obtained summary judgment in a class action alleging breaches of fiduciary duties in connection with cash out merger and subsequent sale of Michigan Corporation. The court rejected use of Delaware’s entire fairness test, holding that appraisal was the sole remedy available to dissatisfied minority shareholders, even in an alleged conflict transaction and found claims of failures to disclose/misrepresentations to be unwarranted. Krieger v. Gast, 179 F. Supp 2d 762 (W.D. Mich. 2001). See also Krieger v. Gast, 122 F. Supp. 2d 836 (W.D. Mich. 2001) (discussing appraisal remedy and burden of proof), and Krieger v. Gast, 1998 U.S. Dist. LEXIS 15422 (N.D. Ill. 1998)(dismissing securities fraud claims).
  • Barnes & Thornburg attorneys represented a financial advisor in a case brought by a state Securities Commissioner, alleging securities fraud. The claims were dismissed for failure to state a claim.
  • Barnes & Thornburg attorneys represented anesthesiologists in a direct and derivative lawsuit against the head of their medical group for usurping corporate opportunities and diverting corporate revenue for himself. Lawsuit settled with significant payment to plaintiffs.
  • Barnes & Thornburg attorneys represented chief accounting officer in multinational company against allegations of accounting and securities fraud brought by the Department of Justice and the Securities and Exchange Commission.
  • Barnes & Thornburg attorneys represented client in defense against fraudulent conveyance and conversion claims involving $350 million asset sale. The trial court dismissed the claims against client and the other defendants. Following the dismissal, the Plaintiff appealed and the Court of Appeals affirmed the trial court’s decision. Angelopoulos v. Angelopoulos, 2013 Ind. App. LEXIS 538 (Ind. Ct. App. Oct. 29, 2013).
  • Barnes & Thornburg attorneys represented client in successfully defending securities fraud class action and obtained dismissal of all claims. Spears v. Metropolitan Life Ins. Co., 2009 U.S. Dist. LEXIS 67686 (N.D. Ind. 2009).
  • Barnes & Thornburg attorneys represented client in three NASD arbitrations which involved allegations of securities fraud and damages of over $4.25 million. The claims were dismissed prior to hearing and the motion to vacate those dismissals was denied by the district court. Berkley v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 2008 U.S. Dist. LEXIS 27107 (S.D. Ohio 2008).
  • Barnes & Thornburg attorneys represented Kendrion N.V., a global electronics manufacturer, in a recent victory in the Northern District of Illinois. This victory came on the heels of an arbitration conducted by Deloitte LLP. In the arbitration, the large private equity firm from which Kendrion had purchased a manufacturing company argued that Kendrion owed an "earnout" under the terms of the asset purchase agreement between the parties. Deloitte ruled in Kendrion's favor, finding no earnout was merited.

    Upon receiving the favorable arbitration award, Kendrion moved for summary judgment in a parallel federal case that the private equity seller had also filed. In its motion, Kendrion argued that further litigation was barred by the principles of claim and issue preclusion. Ultimately, the court agreed with Kendrion and granted its motion for summary judgment. In doing so, the court created favorable precedent for similar post-closing merger disputes, holding that, even though the arbitrator could not have decided the legal issue underlying the federal cause of action (an alleged breach of a covenant separate from the earnout provision), it had necessarily decided the factual question underpinning that dispute.
  • Barnes & Thornburg attorneys represented life insurance company in a dispute where the Plaintiff claimed fraud and breach of contract theories by alleging that she was told there would be no tax impact on a rollover of two annuities into a variable annuity. The federal district court granted summary judgment in client’s favor.
  • Barnes & Thornburg attorneys successfully arbitrated securities fraud claim for client, Dr. Thondavadi. Thondavadi v. Chandra, No. 1:09cv7730 (N.D. Ill., filed Dec. 14, 2009).
  • Barnes & Thornburg attorneys successfully represented client, Resource Financial and Mark Teufel, in the prosecution of a claim of misappropriation of corporate assets. Resource Financial Corporation and Mark Teufel v. Russell Stepke, No. 11-CV-07159.
  • Barnes & Thornburg LLP attorneys Trace Schmeltz, Kevin Rising, Katie Matsoukas and Jacob Zipfel represented Robert B. Leckie, an outside director of A-Power Energy Generations Systems, Ltd. ("A-Power"), in his successful defense of both shareholder derivative litigation and a securities fraud class action. A-Power is a Chinese company that, through a reverse merger with a company from the British Virgin Islands that was listed on the NASDAQ, became publicly traded. After being unable to successfully file its annual report with the Securities and Exchange Commission on Form 20-F, the company, its directors, and its officers were sued in shareholder derivative suits and securities fraud class actions that were consolidated before Judge Wu in the United States District Court for the Central District of California.

    In the shareholder derivative suit, the plaintiff's counsel dismissed the lawsuit with prejudice after receiving the firm's motion to dismiss the case based on the plaintiff’s lack of standing under the law of the British Virgin Islands to bring such a lawsuit. Barnes & Thornburg was assisted by lawyers from Stuarts, Walker, Hersant in the Cayman Islands. More recently, Mr. Leckie obtained a dismissal from the securities fraud class action, in an opinion found here. Although the Court granted the plaintiff leave to amend, the Court expressed skepticism as to whether the plaintiff could successfully re-plead a claim against Mr. Leckie, finding it “reasonable to conclude that Plaintiff has nothing else to add to its allegations” against Mr. Leckie. Taking their cue from the Court, the Plaintiffs dropped Mr. Leckie from the suit altogether.
  • Barnes & Thornburg LLP represented Crabtree Holdings, LLC, in its acquisition of MTL Equity Products, Inc. As required by the stock purchase agreement, the firm will be renamed Brooklight Place Securities, Inc. MTL Equity Products, which is a holding company in the Mutual Trust Financial Group, has been a securities broker-dealer and investment adviser for more than 25 years.
  • Barnes & Thornburg successfully defended cotton cooperative client in contract and securities claim brought by Refco for hedging losses incurred. Refco LLC v. Tri-County Gin & Cotton, No. 1:03cv4963 (N.D. Ill., filed July 17, 2003).
  • In Teamsters Affiliates Pension Plan et ano v. Walgreen Co., 08 C. 2162, 2010 WL 3894149 (N.D. Ill. Sept. 29, 2010), the plaintiffs alleged that Walgreen Co. had withheld material information from the market concerning its anticipated future revenue and expenses when reporting its historic earnings. After the court dismissed plaintiff’s complaint (because there is no duty to make projections and the historical data was complete and accurate), plaintiff came forward with an analyst report that purported to show that Walgreen Co. was making affirmative, positive statements about its future prospects that were at odds with the undisclosed data. The court disagreed and dismissed again, finding that the plaintiffs had not adequately identified that “Walgreen Co.” source for the information in the analyst report.
  • On behalf of securities agent client, a Barnes & Thornburg attorney obtained voluntary dismissal by state securities division of its administrative complaint seeking to revocation of the agent's license.
  • Plaintiffs were investors who allegedly suffered a multi-million dollar loss in their investment in a high-technology limited partnership. They sought class certification alleging fraud and breach of contract claims on behalf of similarly-situated investors. The district court dismissed plaintiffs’ fraud claim against Goldman in 2012. In 2013, the court granted summary judgment on plaintiffs’ contract claim. Kruse et al. v. Goldman Sachs & Co. et al., 897 F. Supp.2d 769 (N.D. Ind. Sept. 19, 2012); 2013 U.S. Dist. LEXIS 47918 (N.D. Ind. Apr. 2, 2013); Case No. 1:10-cv-00323 (Northern District of Indiana).
  • Represent numerous officers and directors of distressed banks and other lending institutions in indemnity claims brought by the FDIC alleging mismanagement, breach of fiduciary duty, and gross negligence. In addition to representing the directors and officers, attorneys also assist in analyzing and securing insurance coverage for these individuals regarding the FDIC claims.
  • Represent Thomas E. Stern, former chief financial officer of OptionsXpress, a Chicago brokerage firm, in two cases brought by the Securities and Exchange Commission (SEC). The SEC alleges that the brokerage and executives, including Mr. Stern, broke SEC regulations regarding short sales in facilitating certain options trades, and that they also conducted trading through an entity that should have been registered as a dealer. Several recent media reports quote firm attorney Trace Schmeltz of the firm's Chicago office, including:

    "SEC Discloses New Charges on OptionsXpress, Former CFO" - The Wall Street Journal

    "SEC charges optionsXpress in registration case" - Reuters

    "SEC Initiates 2nd Case Against ex-optionsXpress CFO" - Securities Technology Monitor
  • Represented Dr. Dennis Mangano in Mangano v. PeriCor Therapeutics, Inc., in the Court of Chancery, State of Delaware, to obtain control of his stock from a voting trust. Obtained summary judgment in favor of Dr. Mangano that the voting trust had terminated and that he is the owner of the stock. Mangano v. PeriCor Therapeutics, Inc., No. 3777-VCN (Del. Ct. of Chancery 2009).
  • Represented Fortune 500 companies and financial institutions in informal investigations by the Securities and Exchange Commission, many of which have been successfully guided away from further, formal, action against our clients.
  • Represented officer of a national telecommunications company, in SEC investigation and against multi-million dollar federal and state securities fraud, RICO and related fraud-based civil claims in lawsuits filed in multiple state and federal jurisdiction across the country, including Colorado, Florida and Illinois. Obtained complete dismissal with prejudice and award of attorney fees from in federal lawsuit, which was affirmed on appeal, based on the statute of limitations and failure to state a claim; obtained dismissal of federal securities claims in two other federal lawsuits based on the Private Securities Litigation Reform Act; obtained voluntary dismissal in state action after motion to dismiss for lack of personal jurisdiction; and otherwise obtained favorable pre-trial resolutions on remaining claims and cases.

    Shriners Hospitals for Children v. Qwest Communs. Int’l, Inc., 2005 U.S. Dist. LEXIS 40044 (D. Colo. Sept. 23, 2005); Teachers Ret. Sys. of La. v. Qwest Communs. Int’l, Inc., 2005 U.S. Dist. LEXIS 44756 (D. Colo. Sept. 23, 2005); Rogers v. Nacchio, 241 Fed. Appx. 602 (11th Cir. 2007); State Universities Retirement System, et al. v. Qwest Comms, Inc., Cause No. 03-CH-508(Circuit Court of Cook County, Illinois).
  • Represented shareholders of the J.R. Simplot Company in a derivative lawsuit against certain members of the Board of Directors and Offices of the J.R. Simplot Company, one of the largest privately held companies in the U.S., for improperly using company assets for their personal benefit to the detriment of the company and its shareholders. After defeating multiple motions to dismiss and for summary judgment brought by the Directors, Officers, and the Company, the lawsuit was settled to the satisfaction of the plaintiff shareholders.
  • Represented the plaintiff, Mr. Honea, in obtaining a favorable judgment from Cook County Chancery Court that ordered the corporate defendant to pay Mr. Honea more than $3.5 million for the fair value of his minority interest in the company after a fair value hearing. Mr. Honea filed a lawsuit against the company he founded and his two fellow shareholders, claiming that the company and his fellow shareholders removed him from the company in violation of a shareholders agreement and engaged in oppressive conduct in an attempt to freeze him out of the company. Lance Honea v. Access One, Inc., et al., Case No. 08 CH 41120.
  • Represented TLC Beatrice International Holdings, Inc. and the Estate of Reginald F. Lewis as lead counsel in its successful defense in three related proceedings in which Carlton Investments, a former Drexel Burnham Lambert, Inc. sponsored partnership, sought over $300 million in damages and removal of the Board of Directors in a derivative suit in Delaware Chancery Court and a breach of contract claim in New York Supreme Court. TLC Beatrice’s counterclaim in the New York Supreme Court led to a contempt proceeding in federal district court in the Southern District of New York before Judge Milton Pollack, the judge who had approved the settlement of all civil litigation against Drexel and Michael Milken. This, in turn, led to TLC Beatrice’s challenge to the constitutionality of that settlement before the Second Circuit Court of Appeals in Presidential Life Insurance Co. v. Milken. All cases resolved one week before oral argument in the Second Circuit by the payment of a nominal sum by the Estate of Reginald F. Lewis to TLC Beatrice of which the Estate owned 60 percent. Carlton Investments v. TLC Beatrice Int'l Holdings, Inc. (Del. Chancery Court).
  • The firm recently assisted one of its valuable clients in the financial services industry in obtaining a preliminary injunction to enforce the non-compete and confidentiality provisions of an executive employment agreement. Barnes & Thornburg's client filed a complaint and emergency motion for a temporary restraining order and preliminary injunction to prevent the former president of a division of the business specializing in over the counter derivative trading, from working for a competing financial services firm. That same day, Cook County Chancery Division Judge Thomas Allen entered a temporary restraining order after a limited hearing. Then, after expedited discovery, including depositions, document production, and forensic computer examinations, the parties participated in a one day evidentiary hearing. In the course of that hearing, a forensic expert testified that the former employee had retained hundreds of thousands of documents (despite a confidentiality agreement requiring their immediate return) and had accessed the company's proprietary risk management system after leaving employment. Following the hearing, the court granted a preliminary injunction, finding, among other things, the defendant's contract with the new employer was a "farce," designed to avoid the non-compete clause in the defendant's contract with the firm's client. The defendant is now prevented from working for the competing financial services firm for a year and is required to further verify that he has returned the client's confidential information.
  • Trace Schmeltz handled first-chair responsibilities for a federal jury trial in the Northern District of Illinois on behalf of a prisoner who had repeatedly been denied medical treatment. As a member of the Trial Bar in the Northern District of Illinois, Mr. Schmeltz had been appointed to represent the plaintiff in the Section 1983 deliberate indifference case. The case centered on a prisoner who had suffered for an inguinal hernia for over 10 years and was repeatedly denied treatment for his condition. After seven days of trial and more than a day of deliberation, the jury came back with a verdict against Dr. Partha Ghosh and awarded plaintiff $23,250 compensatory damages, and $250,000 in punitive damages. Delbert Heard v. Illinois Department of Corrections, Willard O. Elyea, Parthasarathi Ghosh, Lawrence Ngu, Wexford Health Sources, Inc. No:06-cv-0644 (N.D. Illinois filed February 3, 2006).
  • Trace Schmeltz recently earned a victory for the officers and directors of Green Recycling Enterprises, a franchisee sued for alleged trademark infringement, unfair competition, breach of franchise agreement and specific performance of a franchise agreement. In the complaint, Free Green Can attempted to hold the officers and directors of Green Recycling liable for actions taken in furtherance of Green Recycling's business. Judge Sharon Coleman of the U.S. District Court for the Northern District of Illinois granted our clients' motion to dismiss plaintiffs' second amended complaint against each of the individual defendant officers and directors for failure to state a claim upon which relief may be granted. The lawsuit continues against the corporate defendants. Free Green Can, LLC et ano v. Green Recycling Enterprises, LLC et al. (Case No. 10-cv-5764).



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