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Getting the boot last month from client Morgan Stanley may have put a hitch in Kirkland & Ellis’ swagger — but the extent of the injury is uncertain. Led by Management Committee Chairman Thomas Yannucci, the Chicago-based firm has a litigation department regarded as one of the best in the country, representing some of the largest corporations in the world. But a Florida judge recently determined that Morgan Stanley, represented by Kirkland & Ellis, hid evidence and coached witnesses in a legal battle over the sale of camping-gear maker The Coleman Co.. to Sunbeam, a Morgan Stanley client. Morgan Stanley has since substituted counsel and said that it may pursue a malpractice action against the firm. The result is a major black eye for Kirkland & Ellis — but it may be only skin deep. Verizon Communications Inc. General Counsel William Barr said the case would not affect his relationship with the firm. “I have total confidence in them,” Barr said, adding that Yannucci is an “appropriately aggressive” attorney who has a “good sense of what the odds are in a case.” Enrico Mirabelli, a Chicago attorney at Nadler, Pritikin & Mirabelli who sued Time Warner Entertainment on behalf of a group opposing the portrayal of Italians in certain episodes of “The Sopranos,” said that Yannucci “took a hard-line position” in the case but also was a “gentleman.” Yannucci represented Time Warner, which won a dismissal of the action brought by the American Italian Defense Association. Yannucci, though he would not comment on the Morgan Stanley case, was quick to point to his track record. “I have never been personally sanctioned, reprimanded or admonished by any court in nearly 30 years of practice,” he said. Yannucci, who declined a telephone interview but responded to questions sent by e-mail, was one of several attorneys in the case. Other Kirkland & Ellis partners, including Christopher Landau, Jeffrey Davidson, Lawrence Bemis and Thomas Clare, handled much of the pretrial litigation. Those attorneys filed their own motion to withdraw, citing a conflict with Morgan Stanley. According to a spokeswoman for Morgan Stanley, Washington-based Kellogg, Huber, Hansen, Todd, Evans & Figel now is its lead counsel. The case in Florida, which is began on April 4, involves the sale of Coleman 82 percent of which was owned by Revlon Chairman Ron Perelman — to Sunbeam. Perelman sold his part of Coleman for $1.5 billion plus $680 million in stock. Sunbeam is now part of Jarden Corp. But after Sunbeam executives were charged with accounting fraud, its stock value plummeted. Coleman claims that Morgan Stanley, which underwrote a bond issue for the deal, perpetrated the alleged fraud and failed to turn over records that would have indicated as much. A jury will decide if Perelman relied on the false numbers and is entitled to damages. Coleman Holdings v. Morgan Stanley, No. CA 03-5045. THE WIMP FACTOR The case is a stark contrast to Kirkland & Ellis’ past successes, which Yannucci has not been bashful about touting. In 2002, The American Lawyer, a sister publication of The National Law Journal, selected the firm as a Litigation Department of the Year finalist. At the time, he said that when compared to competing firms, “[w]e think we’re better than everybody else.” He also said that the “internal culture” of the firm was “that you’re a wimp if your case is not tried.” Yannucci and other Kirkland & Ellis attorneys have litigated landmark cases, including representing Chiquita Brands International Inc. in a matter against the Cincinnati Enquirer, whose reporter tapped into the company’s voicemail system. The firm also represented General Motors Corp. in its suit against NBC’s “Dateline” over a story about alleged explosions in GM trucks. But he seemed less willing to herald the firm’s accomplishments and his own. Rejecting the characterization of himself as an aggressive lawyer, he instead said that he brings a “relatively nuanced approach” to cases. “I try to be cordial with opposing counsel and believe credibility with a court is critical,” he said. Apparently, however, Florida Circuit Judge Elizabeth Maass found credibility lacking in the Morgan Stanley matter. She wrote in a March 1 decision that the firm’s “willful and gross abuse of discovery obligations” had “frustrated” the court and opposing counsel. In a March 22 order, she wrote that the abuses served to “infect the entire case,” and that she would inform the jury about Morgan Stanley’s efforts to hide its e-mails for a determination of punitive damages.

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