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AN ACQUISITION WAR DRAWS $32M VERDICT IN MIAMI Case Type: Breach of Confidentiality Agreement, Fraud, Intentional Interference Case: SIRIT Technologies Inc. v. Able Telcom Holding Corp., No. 98-1153CIV (S.D. Fla.) Plaintiff’s Attorneys: Roberto Martinez and Robert Fernandez, of Miami’s Colson Hicks Eidson; and Steven Chaykin, of Miami’s Hanzman Criden & Chaykin Defense Attorneys: James Cox and Brian Sullivan, of the Atlanta office of Paul, Hastings, Janofsky & Walker Jury Verdict: $32.5 million SIRIT Technologies Inc. was in the process of negotiating the acquisition of MFS Network Technologies Inc. from WorldCom Inc., when it entered into a confidential post-acquisition agreement with Able Telcom Holding Corp., said plaintiff’s counsel Roberto Martinez. Under the terms of the pact, after closing the deal with WorldCom, SIRIT would sell off the network portion of MFS Network Technologies to Able. SIRIT would keep the transportation business of MFS. SIRIT disclosed to Able the details of its proposed purchase of MFS, he said. “Then Able turns around and approaches WorldCom directly and proposes to sweeten the deal.” Able promised WorldCom that it would assume the networking business’s $511 million in bonding obligations and that it could pay for the acquisition in cash, Martinez said. As a result, the negotiations between WorldCom and SIRIT ended abruptly. “WorldCom shuts us out and doesn’t even return our phone calls,” he said. Instead, WorldCom, now MCI WorldCom, sold MFS Network to Able. In May 1998, SIRIT sued Able, charging intentional interference with a business relationship, breach of a confidentiality agreement and fraud. On the last count, said Martinez, SIRIT charged that Able fraudulently enticed WorldCom to sell to Able. Able in particular, he said, misrepresented to WorldCom its ability to pay for MFS in cash: “Able was unable to raise the cash.” Able acquired financing, but these loans “drove Able’s stock down, and WorldCom had to lend money to Able to close the deal.” Ultimately, WorldCom ended up owning 20 percent of Able, he added. SIRIT also sued Thomas Davidson, the investment banker for Able in the WorldCom transaction, charging fraud and intentional interference. The defendants contended that there was no breach, no fraud and no interference and that Able entered into the deal with WorldCom after WorldCom became frustrated with negotiations with SIRIT, said Martinez. But, on May 15, a Miami jury found otherwise and ordered the defendants to pay $32.5 million, including $30 million in punitives against Able. Post-trial motions are pending. A FIGHT OVER PLASTIC PATENT GETS DEFENSE VERDICT Case Type: Patent Infringement Case: Phillips Petroleum Corp. v. Exxon Corp., No. 98-638 (D. Del.) Plaintiff’s Attorneys: Harry Roper, George Bosey and Ray Nimrod, of Chicago’s Roper & Quigg Defense Attorneys: William C. Slusser and Claudia Frost, of Houston’s Slusser & Frost Jury Verdict: for the defense Phillips Petroleum Corp. applied for and was issued a patent in the 1980s on a sequencing method for producing polyethylene plastic. The Phillips patent covered the sequencing of hexene molecules, used as a catalyst along a polyethylene chain, said defense attorney William C. Slusser. In the 1990s, Exxon Corp. developed the use of a new catalyst, metallocene, to create polyethylene plastic and began marketing this product. In 1998, Phillips sued Exxon, charging infringement on its patent. Exxon contended, said Slusser, that its product did not infringe: “Exxon did not make its product in accordance with the Phillips sequence” but used distinctly different sequencing. In addition, he said, Exxon contended that the Phillips patent was invalid and that the Exxon method was the first commercially viable method of making this plastic. Phillips was seeking $52 million in damages, to be trebled, but on April 20, a Wilmington, Del., jury found no infringement. The jury did not rule on Exxon’s claim of invalidity once it had found no infringement, Slusser reported. Post-trial motions are pending. NOTABLE VERDICT Case Type: Medical Malpractice Case: Quinn v. Medford Neurological Clinic Inc., 99-1031-L1 (Cir. Ct., Jackson Co., Ore.) Plaintiff’s Attorney: Robert D. Dames Jr. of Portland, Ore. Defense Attorney: David Miller of Portland’s Miller & Wagner Jury Verdict: $10 million On Jan. 8, 1996, Cheryl Quinn came to her family physician complaining of “the worst migraine ever,” said plaintiff’s counsel Robert D. Dames Jr. One side of her face was numb as well and her family doctor diagnosed her as undergoing estrogen withdrawal. The problem persisted and an MRI indicated she had a lesion on her brain stem, he said. On Jan. 12, Quinn was referred to Dr. Walter Carlini, a neurologist, who determined she had a stroke, said Dames, and scheduled her for a cerebral angiogram. The next day, however, her condition worsened again and she was sent to the emergency room of Ashland Hospital, where she was hydrated and put on pain medications, he reported. By Jan. 15, when she was scheduled to have the angiogram, “she couldn’t walk, she was extremely weak.” The angiogram indicated that she had not had a stroke, he added, but her symptoms persisted, accompanied now by heavy breathing and swallowing difficulty. At this point, the neurologist “finally realized that she had an infection,” Dames said. A lumbar puncture revealed that she had encephalitis, but ten minutes after the spinal tap, she went into a coma. The infection was eventually brought under control, but left Quinn, now 46, a ventilator-dependent quadriplegic. She sued Carlini, Ashland Hospital, Rogue Valley Medical Center and her family physician, charging they failed to properly diagnose or treat her infection, leading to her permanent disability. Even when the infection was discovered, said Dames, “they misidentified it as fungal rather than bacterial.” The family doctor settled before trial, Ashland and Rogue Valley settled during trial, leaving Carlini and Medford Neurological Clinic Inc. the sole defendants before the jury. On April 19, a Medford, Ore., jury awarded Quinn $10 million, finding Carlini and the clinic 70 percent responsible. These final defendants settled in May for a confidential amount.

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