A lengthy front-page article in the Wall Street Journal (here) discusses the various attorneys who have represented Richard Scrushy since problems began at HealthSouth in mid-2002, including a dispute over billing with the Jones Day firm that has triggered an ethics complaint against the firm with the Washington, D.C. bar authorities. (ph)
Category: Defense Counsel
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An article in the Birmingham News (Jan. 23) gives a profile of Jim Parkman, who will be among the trial counsel representing Richard Scrushy in his securities fraud trial that has opening arguments scheduled to begin today (Jan. 24). Parker has taken the local "country lawyer" approach, as described in the article:
For Parkman, this is his promotion to the big-time, after more than 20 years of workaday litigating in his hometown of Dothan, a biography he is fond of repeating in court. "I’m just a country lawyer from Dothan, and I don’t have all sorts of fancy notebooks," he told panelists at jury selection two weeks ago, waving a lonely piece of yellow paper, seconds after government attorney Richard Smith had yielded the floor, carting off bulky binders that he consulted every few minutes while questioning jurors. Later in the week, Smith attempted to poach on Parkman’s territory, telling a new group of potential jurors, "I’m just a country lawyer from Talladega, Alabama." Parkman didn’t let it stand, even though Smith is from Talladega. Next time he had the floor, Parkman told the jury that Smith and other government lawyers regularly work on major cases in Washington, Chicago and other business and legal capitals. "I’m only from Dothan," he told the potential jurors. "You aren’t going to hold that against me, are you?"
Parkman is an unknown quantity, and certainly is not a high-profile white collar defense lawyer, unlike his predecessor, Abbe Lowell. It is an interesting strategy, consistent with Scrushy’s approach that emphasizes his local roots, humble beginnings, and lack of sophistication, especially with regard to all that accounting "stuff." (ph)
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A settlement of claims by Enron shareholders and securities purchasers announced yesterday includes an interesting provision that will affect, among others, Ken Lay and Jeffrey Skilling as they prepare for a long-term criminal trial later this year. As reported in an article in the Houston Chronicle (Jan. 7), the $200 million available from Enron’s Directors & Officers insurance policy will be apportioned to pay a part of the settlement, and $13 million will be set aside to pay the defense costs of Enron executives. According to the story, "Of the $200 million in insurance available for the settlements, $13 million was set aside for the continuing defense of defendants that did not settle, which includes individuals like former Enron Chairman Ken Lay and former CEO Jeff Skilling. That set-aside was needed to assure they would not block the settlement. Of the remaining insurance proceeds, $155 million goes to former Enron shareholders, and $32 million goes to the Enron bankruptcy estate to be distributed to Enron’s creditors."
Corporations usually agree to indemnify their directors and officers for the costs of defending against civil, criminal, and administrative actions, and D&O insurance is universal among public companies. The policies have been used to pay at least a portion of the costs of the defense of various officers and directors in recent high profile trials, including Dennis Kozlowski (Tyco), and Martha Stewart has sought payment of at least some of her defense costs related to the securities fraud charge that was dismissed during her trial. Given the complexity of the charges against Lay and Skilling, and the probable length of the trial, it is unlikely $13 million will cover a significant portion of their legal bills. Each has substantial personal resources, although even if there is an acquittal, it is unlikely they could recover the costs from the shell of Enron or in a Hyde Amendment claim. (ph)
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An article in the Washington Post (Nov. 23) discusses the recent push to investigate the conduct of lawyers for corporations who assist their clients in wrongdoing. Defense lawyers have complained that the authority granted to the SEC in the Sarbanes-Oxley Act to discipline lawyers will be used to chill proper legal representation. Apparently, the complaint is falling on deaf ears at the SEC:
Responding to complaints from defense lawyers at yesterday’s American Bar Association meeting that the agency was moving too aggressively, deputy enforcement director Linda Chatman Thomsen said, "I’m delighted that you’re all worried. It’s part of the job."
As Sgt. Phil Esterhaus used to intone at the end of roll call on Hill Street Blues: "Let’s be careful out there."
MattBray.net 