In a rematch in a megabucks fraud case, on May 31 the U.S. Court of Appeals for the Second Circuit revived a claim by Terra Firma Capital Partners Limited that Citigroup Inc. duped it into making a disastrous bid for record company EMI Group Ltd. Paul, Weiss, Rifkind, Wharton & Garrison’s Theodore Wells Jr. led Citi to a defense verdict at trial in 2010, and has been tapped for round number two; Terra Firma looked to Boies, Schiller & Flexner’s David Boies. The dispute arose from a soured 2007 deal in which Terra Firma acquired EMI for more than $6 billion; Citi served as deal adviser and lent Terra Firma money for the acquisition. But EMI went deep into the red during the financial crisis, and Terra Firma eventually sold the company at a $2.5 billion loss. In its 2009 suit, the private equity firm alleged that a top investment banker at Citi drove up EMI’s price by fraudulently misrepresenting that a rival PE firm was also bidding.
Smith v. Merck
On May 9 Sanford Heisler, led by David Sanford, filed a gender bias suit against Merck & Co. Inc. on behalf of pregnant workers and female employees with children. The class action, seeking $100 million, claims that the company denied them raises and promotions, and retaliated against them for taking maternity leave. Perhaps with an eye toward meeting the standards on class commonality set forth by the U.S. Supreme Court in Wal-Mart v. Dukes, the complaint, filed by a Merck sales representative named Kelli Smith, also alleges that Merck has clear officewide policies against women who take time off for pregnancy. Merck has tapped Morgan, Lewis & Bockius’s Michael Burkhardt for the matter, filed in federal district court in Newark. Merck has publicly denied the allegations.
