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Enron Mail |
Looks like NatWest's cross-complaint against Farallon's fund managers may
hold up at the pleading stage.? See below. -----Original Message----- From:?? Bhalla, Sabina Sent:?? Friday, September 22, 2000 12:03 PM To:???? Howard, Steve Subject:??????? Farallon Demurrer hearing This morning I attended the hearing on Cross-Defendants demurrer to Natwest's Cross-Complaint.? The judge permitted extensive oral argument from Bruce MacLoed representing Farallon and Oaktree, and Jim Wines representing Natwest.? Judge Berle was extremely active in asking questions to each party.? He was primarily concerned with the relationship between the fund managers and Oaktree and Farallon, and whether that was a fiduciary relationship, and if so, what level of fiduciary duty was owed (he seemed inclined to leave this issue for summary judgment).? The Cross-Defendants argued that if this suit was to go forward, it would create a disincentive for fund managers to report fraud, since the? fund managers may ultimately be personally liable.? Judge Berle asked Natwest if this was more of an affirmative defense instead of a cross claim, which was being used to diminish Plaintiffs complaint.? Natwest stated that the fiduciaries were liable for not investigating.? Farallon/Oaktree admitted that it has imputed any negligence and actual knowledge from the fund managers to itself, and that Defendants are entitled to an offset.? Interestingly, Plaintiffs stated that the fund managers were damaged themselves, since they did not receive a bonus etc.?? The Judge seemed inclined to permit a demurrer to the contribution cause of action, since Natwest did not really defend that cause of action separate from the indemnity action.? Natwest pointed to a case Platt v. Coldwell Banker 217 Cal. App.3d 1439, which Natwest claimed, allows the fund managers to be sued independently.? A cross action is permitted if the Plaintiffs could have brought the same claims against the fund managers, and Natwest argued that the Plaintiffs could have brought such a claim.? Finally, Natwest said it would be prejudiced if it could not "point the finger" at the highly paid investement manager.? According to the Platt case, a nonparty witness is very different than a potential indemnitor who is sitting at the table at trial.?? ??? The judge said his ruling would occur before Oct. 10.? Legg Mason Cross-Defendants have until that time to file a response to the cross-complaint (that was what the ex parte application was about). This e-mail message may contain legally privileged and/or confidential information. If you are not the intended recipient(s), or the employee or agent responsible for delivery of this message to the intended recipient(s), you are hereby notified that any dissemination, distribution or copying of this e-mail message is strictly prohibited. If you have received this message in error, please immediately notify the sender and delete this e-mail message from your computer.
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