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Two weeks ago, investor Dominick Mazza’s lawyer outdueled several others for the right to run the securities fraud case against MicroStrategy Inc. Last week, Mazza dropped out of the case entirely. The change of heart from Mazza, who allegedly lost between $717,000 and $850,000 when the Vienna-based software developer restated its earnings this spring and caused its stock to plummet, leaves his counsel, Stanley Grossman of New York’s Pomerantz, Haudek, Block, Grossman & Gross, out of a gig. The firm submitted a brief affidavit withdrawing last week. And Pomerantz partner Stanley Grossman says he has “no intention” to continue on the case. “These things happen,” Grossman says. Grossman did not elaborate on the reasons his client pulled out, though he said the subject may come up at a future hearing in the case. Other counsel in the litigation said they did not know why Mazza withdrew. Mazza could not be reached for comment. But no sooner had Mazza dropped out than two of the losers in the first round of competition, New York’s Wolf, Haldenstein, Adler, Freeman & Herz and Milberg, Weiss, Bershad, Hynes & Lerach, offered their clients as substitute lead plaintiffs. Judge T.S. Ellis will hold a hearing today to consider the substitution application. At the first hearing earlier this month, the two firms represented a single “plaintiffs group” composed of a union retirement fund and a collection of individual investors. Ellis rejected the group as lead plaintiff because he found it was not a unified group but rather “the lawyers putting together a group so that the lawyers can control the litigation,” according to a transcript of the hearing. Despite Judge Ellis’ rejection of the group, the two firms have submitted their clients together as one unit again. Wolf, Haldenstein represents Atsukuni Minami, an individual who allegedly lost upwards of $700,000 in the stock drop. His suit is paired with that of a New York City pension fund represented by Milber, Weiss that claims to have lost roughly $600,000. Fred Isquith, a partner at Wolf, Haldenstein, notes that in several recent similar cases, groups made up of an individual and an institutional investor have been considered good lead plaintiffs. Mazza’s withdrawal may also be a bit of a blow to D.C.’s Cohen, Milstein, Hausfeld & Toll, which was serving as local counsel to Pomerantz, Haudek. On the other hand, Cohen, Milstein is serving as a local liaison firm to practically all of the out of town law firms that filed cases against MicroStrategy, so the lawyers for whomever Ellis chooses as the new lead plaintiff may turn to Cohen, Milstein for Rocket Docket assistance. MicroStrategy is represented by Williams & Connolly, while other plaintiffs’ firms in the case include Arlington’s Cohen, Gettings & Dunham; D.C.’s Margolius, Mallios, Davis, Rider & Tomar, and two firms from New York: Kaplan, Kilsheimer & Fox and Goodkind, Labaton, Rudoff & Sucharow.

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