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The trial was projected to last three weeks, but Benchmark v. Duane Morris settled less than two full days into the trial during a mid-morning break Tuesday. The settlement was sealed and attorneys for both sides declined to give details. The suit brought by Jackson National Life Insurance Co. and Benchmark, a plastic utensil company to which Jackson loaned $26.5 million, accused the firm of Duane, Morris & Heckscher and partner Vincent F. Garrity Jr. of helping client and takeover specialist Michael T. Kennedy to acquire Wincup — a plastic cup manufacturer in good financial shape — while keeping its assets away from troubled Benchmark. Kennedy was CEO, sole director and sole shareholder of Benchmark. Duane Morris represented both Kennedy and Benchmark at the time. Jackson owned Benchmark nonvoting preferred stock. The suit accused Duane Morris and Garrity of legal malpractice, aiding and abetting Kennedy’s breach of a fiduciary duty and intentional interference with a contractual relationship. The suit had asked for more than $100 million in damages and said Duane Morris and Garrity had deprived Benchmark of the corporate opportunity to purchase Wincup, a company now worth more than $425 million. Attorney Mark Jay Krum, a solo practitioner in Philadelphia and a former Assistant U.S. Attorney, represented Jackson and Benchmark along with Jay Eisenhofer of Wilmington, Del.’s Grant & Eisenhofer. Krum entered a series of documents in evidence early Tuesday showing that, among other things, Kennedy sent letters notifying himself of the corporate changes at Benchmark rather than Jackson in spite of a contract requiring Jackson to be notified in the event loans to Benchmark were accelerated. Krum’s first and only witness was Carl Klein, an attorney for Jackson during the early 1990s. Krum presented Klein with a series of memos that Klein said “told me something happened between Oct. 18 and Oct. 23 [1991] … something serious changed.” Krum also presented Klein with handwritten notes of Garrity’s that Klein said sketched out the corporate structure as he knew it, but also showed a new structure with new holding companies and the addition of Wincup that reflected significant changes. Klein said it was his impression that Duane Morris and Kennedy “were proceeding with a new corporate structure” but said he wasn’t aware of it until discovery in 1997. “I think that Jackson was simply cut out of the [Wincup] transaction,” Klein said in trial testimony. Krum was in the midst of his direct examination of Klein, which started Monday afternoon, when Judge Allan H. Tereshko announced the mid-morning break that would ultimately end the case. The 10:55 a.m. break was supposed to end at 11:05 a.m., but attorneys for both sides filed into the judge’s chambers shortly after 11 a.m.. They returned to the courtroom at about 11:20 a.m., when Tereshko told the jury the matter had settled and the terms would be sealed. Krum had planned to call nationally known Hofstra University School of Law ethics professor Monroe Freedman, who was in the courtroom, immediately after Klein. Kennedy was also waiting in the hallway outside courtroom 243, Krum said, ready to take the stand. Defense counsel Joseph A. Tate of Dechert, who represented Garrity and Duane Morris, said immediately following announcement of the settlement that he was surprised it happened so quickly. Tate later said that he and Duane Morris “are very pleased with the settlement. It will allow Duane Morris to go back to the business of law.” In Tate’s opening statement to the jury, he said that the Wincup deal was structured the way it was only because the bank involved would not lend money to a troubled company and wanted Wincup to be kept separate. He said Scott Paper Co., which owned Wincup, had similar concerns. Garrity, he said, was acting “as a prudent lawyer should” when he structured the deal and that there were no conflicts of interest. He also said that Garrity would take the stand. Neither Duane Morris General Counsel Gene E.K. Pratter nor Garrity returned calls for comment. Both Eisenhofer and Krum said the sealed settlement did not permit them to comment.

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