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LAWYER HANGS TOUGH FOR WIDOW’S PAYOUT Even a skilled trial lawyer like Susan Harriman believes many cases should settle. But her latest one, a dispute over executive compensation, was different. “Think about it. You have a company suing its CFO’s widow for the insurance proceeds that she received when her husband died,” the Keker & Van Nest partner said. “Just saying it makes it sound absurd.” The current board of the Pacific Maritime Association, which handles labor contracts with the longshoremen’s union, didn’t like the lucrative compensation plan crafted years ago by a handful of top executives. After one executive died of cancer, leaving his widow $10 million under the plan, the board sued her and a few former executives to undo the package. And on March 30, a federal judge rewarded Harriman for resisting the temptation to settle: U.S. District Judge Susan Illston gave Harriman’s client the entire pile of money. In summarizing her decision, Illston first found that client Jeannette Coburn’s husband and another former PMA executive had breached their fiduciary duties by creating the Secured Executive Benefit Plan at the heart of the case. The executives “engaged in a self-interested transaction that uniquely benefited themselves” and did not fully disclose the transaction to the board of directors, Illston wrote in Miniace v. PMA, 04-3506. Reading Illston’s ruling up to that point, Harriman said, “I was bracing myself for how I was going to break the [bad] news to Jeannette.” But Illston later found that the board was also negligent in failing to request information about the executive compensation plan, which it had approved. And because the board lost no money in the deal, Illston concluded that Coburn should keep the funds. In the ruling, the Northern District judge also sided with PMA’s former CEO, Joseph Miniace, who was represented at trial by Coblentz, Patch, Duffy & Bass’ William Orrick. Michael Baker, the litigation chair at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, tried the case for the PMA. “People are always tempted to settle cases,” Harriman said. But “sometimes you just have to stand up for what is right and try the case, [and] lawyers shouldn’t lose sight of that.”

Matthew Hirsch

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