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Steven Schulman, a name partner at Milberg Weiss Bershad & Schulman, resigned from the embattled class action powerhouse Friday, seven months after he and another partner were indicted in an alleged kickback scheme involving the firm’s securities class action clients. Schulman, in a press release, said he wants to “seek new opportunities and become more active again in the practice of law.” It’s unclear if he will attempt to set up his own firm. Through his assistant, Schulman declined to comment, referring questions to his spokesperson. In May, Schulman, along with another name partner, David Bershad, were indicted by the U.S. attorney for the Central District of California for allegedly paying $11 million in kickbacks to plaintiffs in securities class actions. The firm was also indicted. They have denied all charges. Melvyn Weiss, the firm’s chair, dismissed any suggestion that Schulman’s resignation had been less than voluntary, saying, “It was a personal decision on his part, and it’s not unfriendly. We all respect and admire the work he has done as a professional for over 25 years.” Sam Singer, Schulman’s spokesperson, said Schulman had been contemplating the resignation for months and decided that it was time to make a move with the start of the new year. Schulman, who is based in New York, plans to practice law again and lecture on the importance of securities class actions, Singer says. He also says Schulman has not decided whether to try to join another firm or strike out on his own. But it is uncertain if another firm would have him as long he remains under indictment. Discussions about the firm’s new name are already underway. According to Weiss, the firm’s rules require that it be changed. “I don’t know what’s better for [the firm,]” says Stanley Bernstein, of Bernstein Liebhard & Lifshitz, another major player in the plaintiffs’ bar and cocounsel with Milberg Weiss in a longstanding IPO securities litigation. “ But I would imagine the firm would prefer not to have an indicted partner as a name partner.” Both Weiss and Singer say the resignation will have no impact on Schulman’s joint defense with the firm against the conspiracy allegations. “Mr. Schulman will continue to work closely with Milberg Weiss in defense of the firm and in his own defense. He will vigorously fight all charges,” Singer says. Schulman is being represented by Gordon Greenberg at McDermott Will & Emery in Los Angeles and Herbert Stern at Stern & Greenberg in Roseland, New Jersey. Bershad’s counsel are Robert Luskin at Patton Boggs in Washington, D.C., New York solo Andrew Lawler, and Ted Cassman at Arguedas Cassman and Headley in Berkeley, California. Milberg is being represented by Zuckerman Spaeder. Schulman started at Milberg Weiss 20 years ago, after working for five years as an associate at Cravath, Swaine & Moore. He rose at Milberg by pursuing large-scale securities fraud class actions and shareholder derivative suits. He was lead trial counsel in a class action against MicroStrategy, Incorporated, over misreporting financial statements that settled for more than $130 million. He also led the trial team in In Re The Walt Disney Company Derivative Litigation. His client did not ultimately win, but the Delaware Court of Chancery in 2005 used the case to redefine the duties of directors in publicly traded companies regarding corporate governance and executive compensation. This is the second time in a week that Milberg has faced turmoil. On Tuesday, the U.S. Court of Appeals for the Second Circuit vacated class certification in six key cases in the massive litigation over dot-com era initial public offerings. Milberg serves as lead counsel. The Second Circuit decision has left in doubt whether plaintiffs will ever be able to certify a class against IPO underwriters in the more than 300 cases that make up In Re IPO Securities Litigation. It may also jeopardize a pending $1 billion settlement agreement reached between IPO issuers and the plaintiffs. Six plaintiffs firms, including Bernstein Leibhard and Milberg Weiss, are managing the plaintiff’s case. Schulman, however, was not working on the case.

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