McDermott Settles St. Vincent's Malpractice Suit
By Andrew Longstreth
May 21, 2009
McDermott, Will & Emery has settled a malpractice claim brought by the litigation trustee in the bankruptcy of Saint Vincent's Catholic Medical Centers of New York, according to court records. But that's about all we know, since the litigation trustee has asked for the settlement to be filed under seal. (Here's that motion.) News of the settlement was first reported by Crain's New York.Last year the trustee sued McDermott and several other parties, alleging, among other things, breach of fiduciary duty, legal malpractice, attorney misconduct, and fraudulent concealment. According to the New York Law Journal, the trustee alleged that McDermott purposefully delayed the bankruptcy filing of Saint Vincent's to keep members of the hospital's restructuring team in place and run up its own bills, which delayed the hospital's emergence from bankruptcy. (St. Vincent's substituted McDermott with Weil, Gotshal & Manges as its debtors counsel in September 2005.) The litigation trustee was seeking $200 million for each of the six causes of action, according to the New York Law Journal.
Interestingly, one of the reasons cited in the trustee’s motion to file the settlement under seal is to protect McDermott from competitors. "MWE has a strong interest in maintaining the confidentiality of the proposed settlement agreement because it contains confidential information about MWE, disclosure of which could adversely affect its commercial activities," it says. "Specifically, disclosure of the terms of the proposed settlement agreement could provide a road map for any disgruntled current or former client of MWE for the pursuit of litigation against the firm, giving an unfair advantage to MWE's competitors in the marketplace."
The litigation trustee, Gray & Associates, is represented by Abrams Fensterman Fensterman Eisman Greenberg Formato & Einiger; the Law Offices of Arnold Weiner; and Whiteford, Taylor & Preston.
McDermott is represented by Frederick Warder III of Patterson, Belknap, Webb & Tyler. We did not hear back from the firm.
