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SIMON v. KPMG LLP
November 3, 2005.
MARVIN SIMON, as Authorized Representative for The Marvin Simon Trust, as amended, for Palm Investors, LLC and for The Jeffrey Markman 1993 Irrevocable Trust, MARILYN SIMON, CLAUSE HARRIS, ANN HARRIS, BEN SIMON, HEIDI SIMON, BRITT SIMON, KIM FINK, AMY GOLDBERG, STEFAN RESSING, Individually and as Trustee of The S. Ressing 1999 Trust, FITZROY VENTURES, LLC, MICHAEL LE 1999 Trust, and MACKENZIE VENTURES, LLC, Plaintiff(s),
KPMG LLP and SIDLEY AUSTIN BROWN & WOOD LLP, f/n/a/ BROWN & WOOD LLP, Defendant(s).
The opinion of the court was delivered by: DENNIS CAVANAUGH, District Judge
THIS MATTER coming before the Court upon Intervenor Mark
Kottler's Motion to Disqualify Milberg, Weiss Bershad & Schulman
LLP, alleging a conflict of interest, and the Court having
conducted hearings on October 28, 2005, and October 31, 2005, and
for the reasons set forth on the record and the findings made in
this Supplemental Opinion, the Motion to Disqualify is denied. In support of the disqualification application, the Intervenors
relied upon the testimony of Mark Kottler. Mr. Kottler had been
represented in an individual capacity by Milberg Weiss Bershad &
Schulman (Milberg Weiss) prior to and during the settlement
negotiations. The Court was not impressed with Mr. Kottler's
testimony and finds portions to be not credible.
On direct examination Mr. Kottler contradicted claims he made
pre-hearing in his declarations and during cross examination he
made various admissions contrary to the claims made in support of
his disqualification motion. The Court had an opportunity to
observe the witness as well as his demeanor and is of the opinion
that he is lacking in credibility. Accordingly, I am according
little weight to his testimony.
In contrast, Milberg Weiss called two fact witnesses on this
issue. Mr. Brad Friedman and Ms. Rachel Fleishman, attorneys with
the Milberg Weiss firm. I found their testimony straight forward
and believable. Reviewing the record as a whole, I find Mr.
Kottler was indeed notified of the settlement discussions and in
fact consented thereto.
Professor Moore, testifying as an expert on the conflict issue,
acknowledged that it was not her place to assess credibility. Her
expert opinion was based upon the facts supplied her through
documentation submitted by attorneys for the Intervenors. Since I
accord Mr. Kottler's testimony little weight on the critical
issue of his knowledge and consent to Milberg Weiss's
negotiations with KPMG, I reject Professor Moore's opinion with
respect to these facts. Additionally, as stated on the record and
from my independent review of the law, I am convinced that Judge
Adams is correct as to Lazy Oil's*fn1 application to this
case. On balance I find little or no prejudice to Mr. Kottler. As
such, even if I were persuaded that a conflict existed and that
Mr. Kottler lacked knowledge and did not give informed consent, which
I do not, I would not disqualify Milberg Weiss. Simply stated,
there has been no showing of prejudice to either Mr. Kottler or
Accordingly, the application to disqualify Milberg Weiss is
denied. An appropriate Order will be entered.
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