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A copy of the complaint reported in the article below, which alleges that current CA board members D'Amato and Ranieri "prevailed upon the management team to allow them to 'settle' the case" (Complaint 69) on terms that allowed Milberg Weiss and the other plaintiff representatives to take 25% of a $140 million payment "in exchange for an agreement to release all individual defendants [including themselves as well as subsequently convicted executives] from any personal liability" (Complaint 72), can be downloaded from the following link:

 

Newsday, November 27, 2007 article

 

 

Newsday

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Suit: Lawyers cut deal on CA claims to grab fat fees

 

BY MARK HARRINGTON | mark.harrington@newsday.com
November 27, 2007

 

Four class-action law firms that negotiated a 2003 settlement of civil accounting-fraud charges against Computer Associates walked away from potentially billions in shareholder claims by prematurely settling a 2002 action so they could reap exorbitant attorneys' fees, a suit filed Friday claims.

The suit filed in State Supreme Court in Manhattan by Texas billionaire Sam Wyly and related investors accuses the law firms, including Milberg Weiss Llp, of legal malpractice, fraud, unjust enrichment and breach of fiduciary duty.

In addition, the suit claims that one starting point for the 2003 settlement was a previously undisclosed meeting between Computer Associates board member Alfonse D'Amato and Melvyn Weiss, the principal of Milberg Weiss.

The suit charges that D'Amato, a lawyer and former U.S. senator, and another director "said they knew Mel Weiss and that he would be reasonable - so long as the company understood his objectives and self-interest."

The meeting took place in the summer of 2003, according to the suit, and afterward D'Amato allegedly reported to Computer Associates' board that "Mel" indeed would be "reasonable."

The following fall, the law firms and Computer Associates, the software company now known as CA Inc., agreed to a "global" settlement of all pending actions against the company that included a clause protecting board members and executives, past and present, from being sued in the future. In exchange, the new lawsuit alleges, the company agreed to support the law firms' request for attorneys' fees of up to $1,000 per hour.

In addition to Milberg Weiss, the suit names as defendants the securities law firms of Stull, Stull & Brody; Schiffrin, Barroway Topaz & Kessler; and Coughlin Stoia Geller Rudman & Robbins. Representatives of the firms did not respond to calls seeking comment. A spokesman for CA declined to comment, and a spokeswoman for D'Amato didn't return a phone call.

The suit claims that while the settlement with Computer Associates netted shareholder victims "not even a penny on the dollar" of their accumulated losses, the law firms received some $40 million. The suit seeks unspecified damages, access to all legal papers previously withheld in the suits, and return of the $40 million in fees.

The heart of Wyly's claim is the difference between two sets of shareholder lawsuits filed against Computer Associates - one in 1998 following a sharp drop in the company's share price, and another in 2002 after revelations of federal probes of the company's accounting.

Wyly's attorney, William Brewer, called the law firms' decision to effectively drop the claims in the 2002 suit "one of the most egregious cases of malpractice I've seen in 23 years."

The suit takes exception to the law firms' claims that allegations in the two suits were largely similar and therefore could be combined for the purposes of a settlement. The suit claims that if allegations in the later suit had been properly researched and argued, the settlement would have been much larger.

The new suit also notes that while the settlement was being reached, officials at Milberg Weiss were under federal investigation in connection with an alleged scheme in which individuals supposedly were paid improper fees to serve as "professional plaintiffs" in shareholder cases, including the Computer Associates suits. The Milberg Weiss firm and Melvyn Weiss have since been indicted on those charges, and pleaded not guilty.

 

Copyright 2007, Newsday Inc.

 

 

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