A $145 million settlement Barrack, Rodos & Bacine secured with the owner of the University of Phoenix didn’t come easily. Representing the Policemen’s Annuity and Benefit Fund of Chicago, the business litigation firm spent three years pursuing securities fraud claims against higher-education company Apollo Group Inc. before the case came to trial in 2007. Investors alleged that Apollo misled them about a 2003 U.S. Education Department report on student recruitment policies, artificially increasing the company’s stock value.
The deal required tenacity and a trip to an appeals court. Although a Phoenix federal jury in 2008 ruled in favor of the plaintiffs, awarding damages of up to $5.55 per share, the trial judge dismissed the verdict. The U.S. Court of Appeals for the Ninth Circuit, however, reinstated the jury verdict in 2010. Settlement talks resumed, Apollo agreed to the deal in August 2011 and a federal judge approved it in April.
“It’s been a long, arduous fight,” said Leonard Barrack, founding partner of Philadelphia-based Barrack Rodos, who supervised the litigation with partner Gerald Rodos. Partner Stephen Basser was lead counsel, assisted by partners Jeffrey Barrack and Samuel Ward.
Said Basser: “The result that was achieved was extraordinary.”
Gibson, Dunn & Crutcher partner Wayne Smith, who represented Apollo Group, credited Basser for an “excellent job.” “It’s never all smooth,” Smith said. “But overall, I think the two firms were able to work together reasonably well.”
Barrack Rodos followed the same route to another major settlement on behalf of the Policemen’s Annuity and Benefit Fund of Chicago. A New York federal court in 2011 approved a $90 million settlement of claims that the fund and other groups brought against now-defunct MF Global Inc. The plaintiffs alleged that MF Global’s initial public offering documents in 2007 contained misleading statements. In 2009, a federal judge in New York dismissed the claims, but they survived by virtue of a Second Circuit ruling in 2010, reinstating the suit. The settlement followed.
Barrack Rodos partner Mark Rosen argued the case and partner William Ban worked on the briefs.
Barrack credited his firm’s success to having senior, experienced lawyers. “We do quality work,” he said. “We have had great results.”