Investors and the court-appointed receiver in the Stanford Financial Ponzi scheme case have settled claims against Stanford’s former counsel Proskauer Rose LLP.
The move appears to bring the complex multi-jurisdictional litigation pending for nine years to a close.
Though “vigorously” denying any wrongdoing or liability, Proskauer has agreed to pay $63 million for a release from all claims against it related to the elaborate $7 billion Ponzi scheme infamously masterminded by R. Allen Stanford and the phony certificates of deposit sold by his Caribbean bank.
If the settlement is approved by the court, the money—less 25 percent to be paid to plaintiffs’ counsel—will be available to compensate Stanford’s defrauded investors and creditors.
“We have agreed to settle the Stanford claims pending in Texas to conclude a vigorously contested litigation that has been pending for nearly a decade and likely would have lasted for many more years,” a spokesperson for Proskauer told Bloomberg Law Aug. 28.
“While we believe we ultimately would have prevailed, we determined it was best to put this matter behind us and focus on the continued growth of the Firm,” the spokesperson said.
The settlement is for a small percentage of the billions that plaintiffs sought from the firm.
Litigation against Proskauer began in 2009 when a group of investors filed a class action case against the firm, according to the plaintiffs’ Aug. 24 motion to approve the settlement.
While that litigation advanced, receiver Ralph Janvey and a court-created investor committee sued Proskauer and another firm in 2012. The cases have been all the way to the Texas and U.S. Supreme Courts.
Shortly before trial—originally scheduled for the end of April—Proskauer asked the U.S. Court of Appeals for the Fifth Circuit to stay the litigation while it appealed an order denying judgment on the pleadings, according to the settlement motion.
The next day, the parties agreed in principle to settle the dispute.
“We are glad we were able to resolve this case on the eve of trial for the benefit of the victims, and hope that the Court will move expeditiously to approve the settlement,” Edward C. Snyder told Bloomberg Law Aug. 28. Snyder, with Castillo Snyder PC, San Antonio, Texas, is one of the attorneys representing the plaintiffs in the case.
Janvey was represented by Baker Botts LLP and others. Proskauer was represented by Davis Polk & Wardell LLP.
The case is Janvey v. Proskauer Rose, LLP, N.D. Tex., 3:13-0477, Motion to Approve Proposed Settlement 8/24/18.