Douglas Lobel of Cooley Godward Kronish, who represented E*Trade at the 13-day trial last fall, gave us some background on the case, which was filed four-and-a-half years ago. The dispute involved two related companies that E*Trade acquired from Deutsche Bank in a pair of transactions that took place in 2002 and 2003. E*Trade alleged that Deutsche Bank knowingly overstated the value of a deferred tax asset on the balance sheet of one of the companies; Deutsche valued it at about $15.3 million but E*Trade found it to be worthless. At trial, Lobel said, Deutsche argued that it had correctly valued the asset, and that even if it had not, E*Trade should have learned its true value through due diligence.
“The judge rejected that,” Lobel told us. Rather resoundingly: Judge Sweet awarded E*Trade all the monetary relief it sought, even though he denied its fraud claims.
We left a message with Scott Musoff of Skadden, who represented Deutsche Bank at trial. We’ll update this post if we hear back from him.
In the meantime, if you want to watch the trial, here’s the video, available (for a price) at Courtroom View Network.