X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The second-longest case in the history of the Delaware Court of Chancery resulted in a fee request reflecting the litigation’s longevity — $11.1 million, which lawyers for plaintiff Cantor Fitzgerald LP said was the cost of prosecuting the case. The Wilmington office of New York’s Skadden, Arps, Slate, Meagher & Flom, which represented government bond broker CFLP, stated in court papers that the brokerage ran up the fees and expenses in a two-year battle with renegade partners. In March Vice Chancellor Myron T. Steele found that Iris Cantor, widow of company founder B.G. “Bernie” Cantor, and her nephew, Rod Fisher, violated their duty of loyalty to their partners by helping rival Chicago Board Brokerage. The pair, Steele ruled, violated a non-compete agreement when they worked with CBB to develop the first online trading system for U.S. Treasury bonds. While refusing to award Cantor Fitzgerald $50 million in damages and eject Cantor and Fisher from the partnership, Steele ordered them to pay the brokerage’s legal fees in the case. The vice chancellor still must approve Skadden Arps’ request. The fee request will “redress the harm CFLP has suffered as a result of defendants’ intentional, willful and wrongful conduct,” Karen Valihura, a Skadden partner, said in court filings. Of that $11.1 million, Skadden received $10.3 million in fees, Valihura noted in court papers. About $803,785 went to pay other fees and expenses. Cantor’s and Fisher’s lawyers argued that the partnerships’ fee request is excessive and have asked Steele to reject it. “The court permitted CFLP to apply for its reasonable attorneys’ fees,” acknowledged Stephen Jenkins, a lawyer with Wilmington’s Ashby & Geddes which represents the defendants. The brokerage “has tried to lever the court’s opinion into reimbursement of all its expenses related to the case,” even for work done on claims the judge rejected, Jenkins said in court papers. Steele said the measure of injury was the “cost to the client of prosecuting the case” and that was $11.1 million, according to Rodman Ward Jr., also a partner in Skadden Arps. “There were certain motions that we had to make [that] the judge decided against,” Ward said. “None of our motions were frivolous; they were all reasonable things to do.” CFLP SUES PARTNERS New York-based Cantor Fitzgerald and chief executive Howard Lutnick originally sued Cantor, Fisher and their company, Rye Brook, N.Y.-based Market Data Inc., in 1998. The limited partnership argued that Cantor and Fisher violated non-compete provisions of their contracts by developing software so Chicago Board — a joint venture between the Chicago Board of Trade and Prebon Yamane USA Inc. — could offer online trading of government bonds. Chicago Board pulled the plug on its electronic trading system last year and settled Cantor Fitzgerald’s claims. The claims against Cantor and Fisher were the subject of a trial last year. Ward, long-experienced in Chancery Court litigation, said the trial’s length was second only to that of the famous Technicolor case which began in the 1980s. The 39-year-old Lutnick succeeded Bernie Cantor as the head of Cantor Fitzgerald when his mentor died in 1996. He’d been tapped as the heir apparent several years before and once asked Iris and Bernie Cantor to adopt him, according to court papers. After Lutnick took control of the brokerage, Iris Cantor filed suit in Chancery Court in 1996 challenging his ascension. The suit was settled, with Lutnick keeping control of the partnership and Iris Cantor slated to get a total of $154 million. Lutnick filed the latest suit after Iris Cantor and Fisher took Market Data — a 1987 spin-off from Cantor Fitzgerald — and used it to develop the electronic trading system. They offered that system to Cantor Fitzgerald’s competitors. NON-COMPETE PACT AN ISSUE Lutnick, who owns about a quarter of the partnership, contended that all partners were bound by a non-compete agreement and had legal duties not to hurt Cantor Fitzgerald’s business. Iris Cantor’s and Fisher’s actions tore “at the very fabric” of that agreement, he claimed. Iris Cantor countered that she and Fisher had permission under the original partnership agreement to use Market Data to sell the electronic trading system and did nothing to hurt their fellow Cantor Fitzgerald partners. Besides Jenkins, Iris Cantor is represented by Richard I.G. Jones Jr. of the Ashby firm along with Barry I. Slotnick and Michael Shapiro of New York’s Slotnick Shapiro & Crocker. Fisher is represented by Saul B. Shapiro of New York’s Patterson, Belknap, Webb & Tyler. Market Data is represented by Jack C. Auspitz and Howard E. Heiss of New York’s Morrison & Foerster. Along with Valihura and Ward, Cantor Fitzgerald is represented by Thomas Allingham of Skadden’s Wilmington office and Thomas J. Schwarz and Joseph M. Asher in Skadden’s New York office. The case is Cantor Fitzgerald LP v. Iris Cantor, et. al., CA No. 16297.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.