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Vice President Richard Cheney may be added to the list of defendants in Dallas accounting fraud cases, if Colchester, Conn.-based Scott & Scott prevails in its federal court bid to overturn a pending $6 million settlement. The Connecticut class action firm, headed by David R. Scott, represents one of four lead plaintiffs. Scott & Scott has not signed the settlement agreement proposed by Schiffrin & Barroway, a 32-lawyer firm in Bala Cynwyd, Pa., and the Scott firm is now asking the court to remove Schiffrin & Barroway as lead liaison counsel in the case. U.S. District Court Judge David Gobey set an Aug. 25 hearing date for argument over Schiffrin & Barroway’s role and whether to nix the proposed settlement, which covers a score of cases alleging Halliburton engaged in accounting fraud between May 1998 and May 2002. During that period, both Cheney and his successor CEO David Lesar shared responsibility, but only Lesar was named as a defendant in the lawsuit. Neil Rothstein, a Pennsylvania-based partner in Scott & Scott, said Richard Schiffrin did not name Cheney as a defendant, despite liability exposure, because it would be “inappropriate” to do so during the war on Iraq. Scott & Scott court documents allege the damages from the alleged accounting fraud amount to $6.8 billion, and that the $6 million settlement is wholly inadequate. In an April 11 complaint, Scott & Scott client Richard Moore and others sued four top Halliburton executives, alleging that the company did not engage in adequate due diligence when it acquired Dresser Industries Inc. in a stock swap deal valued at $7.7 billion. Halliburton CEO Cheney and Dresser CEO William E. Bradford put the deal together during a quail hunt in South Texas on Jan. 17, 1998, according to the complaint, and concluded the merger in less than six weeks. At the time, Halliburton was more interested in antitrust issues, and the logistics of merging the two oil and gas companies’ international operations, than in due diligence matters, the complaint alleges. The merger occurred Feb. 25, 1998, during an oil industry recession. The poor economic performance at the time led to an undisclosed change in accounting, through Halliburton’s then-accounting firm, Arthur Anderson, allegedly in violation of accepted accounting standards and rules of the Securities and Exchange Commission. In the fourth quarter of 1998, Halliburton allegedly changed its accounting methods for reporting cost overruns. Richard S. Schiffrin, whose firm is liaison counsel for a group of class action plaintiffs’ firms, did not return a call for comment. David Scott and Jules Brody, of New York, are lead counsel for the plaintiff.

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