Dallas’ Highland Financial Partners LP and two related companies have settled a suit alleging “legal malpractice/negligence” against Orrick, Herrington & Sutcliffe in connection with how Orrick handled a financial transaction.
On Dec. 17, Judge Martin J. Hoffman of the 68th District Court in Dallas signed an order of dismissal with prejudice in Highland CDO Opportunity Master Fund LP, et al. v. Orrick Herrington & Sutcliffe LLP, et al.
On Dec. 14, Highland Financial Partners and related companies Highland CDO Opportunity Master Fund LP and HFP CDO Construction Corp. filed a motion asking Hoffman to “nonsuit with prejudice” all of their claims against the Orrick defendants and dismiss the suit with prejudice.
“The parties have now resolved their differences,” the Highland plaintiffs allege in the motion.
The defendants are Orrick Herrington of Los Angeles and Orrick, Herrington & Sutcliffe (Europe) LLP of London.
Rod Phelan, a partner in Baker Botts in Dallas who represents the Orrick defendants, says “The litigation was settled on confidential terms to the satisfaction of both parties.”
William Reid, a partner in Reid Collins & Tsai of Austin who represents the Highland plaintiffs in the litigation, says the suit settled in November in mediation.
“All I can say is it was settled on confidential terms,” says Reid, who worked on the suit with his partner Lisa Tsai.
Highland sued Orrick on Jan. 25, alleging the defendants were negligent in connection with a “proposed multi-million-dollar collateralized debt obligation (‘CDO’) transaction between Highland as borrower and Royal Bank of Scotland plc (‘RBS’) as lender.” [See "Legal Mal/Negligence Suit Seeks Millions From Orrick L.A., London," Texas Lawyer, Feb. 6, 2012, page 5.]
Highland alleged in the petition that it lost $65 million in the transaction and additionally faced an approximately $30 million “alleged deficiency.” It sought actual damages of about $95 million plus interest.
In its original answer filed on Feb. 25, Orrick denied the allegations and alleged that Highland was trying to blame Highland’s lawyers for its investment losses.
“Highland’s original petition invents an inaccurate and incomplete story about what causes the investment losses it belatedly tries to blame on Orrick,” Orrick alleged in the answer.
Orrick sought a take-nothing judgment.
The high-stakes litigation didn’t leave either side’s lawyers with any lingering rancor.
“Bill Reid sent me two bottles of wine,” Phelan notes with a laugh. “I must have overpaid.”
Reid, also laughing, says that Phelan “wasn’t special” because they send out many bottles of wine for the holidays. He adds, however, “Rod is a true professional. We didn’t have many adversaries on the [Christmas] list.”