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Leading the Charge Against TXU On April 2, about 60 attorneys crammed into what had suddenly become the close confines of Judge Carlos Cortez’s 44th District Court in Dallas County. Some practiced in Dallas and Houston, but others came from as far away as Baltimore, New York City, San Diego, Philadelphia and Wilmington, Del., to argue over who among them should be appointed lead counsel representing the plaintiffs � shareholders of TXU Corp. � in two consolidated cases challenging the utility company’s proposed $45 billion sale to two private equity firms. A week earlier, Cortez had consolidated eight separate class actions into In Re: TXU Corp. Shareholder Litigation and three stockholder derivative suits into In Re: TXU Corp. Derivative Litigation. Though dissimilar in legal theory, plaintiff-shareholders in both consolidated cases presented similar allegations: On Feb. 26, TXU issued a press release announcing that the private equity firms of Texas Pacific Group and Kravis Roberts & Co. had entered into an agreement with TXU to acquire the Dallas-based utility company. All three entities are among the named defendants in the litigation. On the same day TXU announced the buyout, plaintiff Harry Schipper brought the first class-action suit in the matter, alleging in his petition that the price the equity firms will pay to take TXU private � $69.25 a share � is “grossly unfair, inadequate and substantially below the fair or inherent value of the Company,” among other things. In his First Amended Class Action Petition, Schipper also alleges that TXU did not give fair consideration to “alternative transactions” and did not engage in a fair or open bidding process. Plaintiffs in both consolidated cases are requesting, among other remedies, that the court enjoin the sale. None of the defendants have filed an answer and a telephone call seeking comment to TXU general counsel David Poole was not returned before presstime on April 5. John C. Wander, a partner in the Dallas office of Vinson & Elkins who serves as co-counsel for the private equity defendants declines to comment, though he was present at the April 2 hearing. But this was not the defendants’ fight. At the hearing, four groups of plaintiffs’ attorneys squared off against each other, jockeying for the position of interim class counsel, and two groups of attorneys sought a similar designation (lead derivative counsel) in the consolidated derivative suit. “If you are lead counsel, you get to control the litigation � you prosecute it,” says Roger Mandel, a partner in Stanley, Mandel & Iola who represents Schipper. “The other lawyers are out, unless you choose to give them work.” In terms of who the judge appoints, it’s “a beauty contest,” says Mandel. “All these firms filed voluminous materials and r�sum�s to demonstrate why they were the best qualified to represent the plaintiffs.” On April 4, Cortez made his decision, granting the “sole authority to conduct the class action litigation to Stanley, Mandel & Iola, which, along with its New York co-counsel Wolf, Haldenstein Alder Freeman & Herz, will serve as interim class counsel. The court also appointed Dallas’ Payne Mitchell Law Group, which, along with Philadelphia firm Donovan Searles, will act as lead derivative counsel. “All the lawyers were well-credentialed and well-versed in this area of the law,” says James Mitchell, a partner in Payne Mitchell. “But I believe the judge thought there was some benefit to having local lawyers who know the peculiarities of Texas law and have Texas jury trial experience take an active role in the litigation.” Lead counsel have seven days to file consolidated amended petitions, says Mandel, after which, the defendants have 30 days to file their responsive pleadings. Gonzales’ Visit On March 29, Richard Roper, U.S. attorney for the Northern District of Texas, and about 10 of his peers met in Houston with embattled U.S. Attorney General Alberto Gonzales. The meeting � scheduled by the AG several months before the scandal over the dismissals of eight U.S. attorneys rocked the U.S. Department of Justice � was held to roll out an anti-child pornography campaign, DOJ spokesman Evan Peterson says. Gonzales held similar meetings with U.S. attorneys in Chicago, St. Louis, Denver, Cincinnati and Boston, Peterson says. But Roper says the Houston meeting also happened to be scheduled on the same day that Gonzales’ former chief of staff, Kyle Sampson, testified on Capitol Hill about the U.S. attorneys’ firings, so the topic did come up. About his meeting with Gonzales, which was attended by U.S. attorneys representing federal districts in the Southwest, Roper says: “It was a frank discussion. We listened and he listened.” Roper says the AG pledged that on a yearly basis each of the nation’s U.S. attorneys will meet with the U.S. deputy attorney general to discuss any personal concerns or questions that have arisen over the past year and to align expectations. “That sounded good to me,” says Roper. Free to Be Former U.S. Supreme Court Justice Sandra Day O’Connor left no room for speculation on how she feels about the partisan election of judges during a speech she gave April 4 at Southern Methodist University Dedman School of Law. After retiring from the court last year, O’Connor has become an advocate for an independent judiciary and for protecting the rule of law from attacks by the other two branches of government. During the speech she also opined on judicial selection reform, a topic discussed by judges and lawyers who attended the law school’s program, titled “Fair and Independent Courts: A Conference on Judicial Independence, Selection and Accountability.” “Texas uses partisan elections to select judges,” O’Connor said. “Help.” Bitter judicial elections and raising money from lawyers and litigants who appear before judges “doesn’t raise confidence, does it?” O’Connor asked. She said she and her former high court colleagues didn’t help matters when they decided Republican Party of Minnesota v. White in 2002. In the 5-4 ruling � written by Justice Antonin Scalia with O’Connor in the majority � the court said that Minnesota’s judicial code of ethics, which precluded judicial candidates from speaking publicly about issues that might come before them as judges, violated the First Amendment of the U.S. Constitution. “That case has opened the money to single issue [activist] groups” to pressure judicial candidates, she said.

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