Hollywood screenwriter Eric Roth has voluntarily dismissed his lawsuit against Stanley Chais, the Beverly Hills investment manager who is accused of handing over millions of dollars in client funds to Bernard Madoff.
Roth, whose credits include “The Curious Case of Benjamin Button” and “Forrest Gump,” sued Chais in December, alleging that he suffered “massive losses” in Madoff’s $65 billion Ponzi scheme. In his suit, Roth said that Chais charged “enormous fees” for investing his clients’ funds, which he promptly handed over to Madoff “in complete disregard of the red flags spotted by other investors.”
Roth did not specify how much he had lost. He sued for breach of fiduciary duty and negligence.
A motion to dismiss hearing in Roth’s suit was scheduled for Sept. 23, but on Sept. 15 Roth voluntarily dismissed his lawsuit.
His lawyers, Tom Girardi of Girardi & Keese in Los Angeles and Santa Monica-based Dale Kinsella of Kinsella Weitzman Iser Kump & Aldisert, did not return calls for comment.
“Obviously, I feel none of the lawsuits have merit and ought all to be dismissed,” said Eugene Licker, a partner in the New York office of Loeb & Loeb who represents Chais. “But that’s up to the plaintiffs and the court.”
The case is the third against Chais to be dismissed in recent months. Hagens Berman Sobol Shapiro dismissed a securities fraud lawsuit against Chais filed on behalf of a Madoff investor. Daphne Brogdon, an investor in Los Angeles, dismissed her lawsuit saying that similar actions brought by the Madoff bankruptcy trustee and the U.S. Securities and Exchange Commission “substantially overlap” with her own allegations.
In her case, Chais filed a motion to dismiss, arguing that claims for breach of fiduciary duty and negligent misrepresentation were actually securities fraud claims and that Chais had no role in the entity into which her funds had been initially invested. A federal judge had heard arguments on the motion but had asked for additional information and never entered a ruling.
A status conference on the remaining five cases is scheduled for Oct. 23.
“Basically, we’re helping coordinate discovery for trial for those cases,” said Barry Weprin, a partner at New York’s Milberg, which has filed two derivative actions on behalf of partnerships in Los Angeles. “The judge asked us to come up with a protocol for discovery and coordinate discovery for the five cases.”
Milberg has asked to include a sixth case, filed on Sept. 22 by California Attorney General Jerry Brown. Brown alleged that Chais collected nearly $270 million in fees from California investors. He seeks $25 million in civil penalties.
Many Chais clients were in the entertainment business, including Steven Spielberg and Jeffrey Katzenberg. In court papers, Chais has portrayed himself as a Madoff victim.
Madoff has pleaded guilty to 11 securities fraud counts and is serving a prison sentence of 150 years.
For more on the Madoff case, see the Law.com Madoff Watch page.