Two weeks after Rutgers University retained Cahill Gordon & Reindel to investigate the handling of issues leading to the dismissal of basketball coach Mike Rice, the firm resigned, citing a development that could give the perception "of a lack of impartiality."

Rutgers announced Wednesday that Cahill said in a May 3 letter that Connell Foley of Roseland, hired by the university for advice about the Rice situation, had earlier been Cahill’s defense counsel in unrelated litigation. It was not until Cahill had been retained that it discovered the past engagement, Rutgers said.

The university’s board of governors promptly hired Skadden, Arps, Slate, Meagher & Flom to conduct the review. Leading it will be Skadden partners Christopher Gunther and Stephen Robinson, the latter a former federal judge and U.S. attorney experienced in internal investigations.

The university did not identify the case involving the potential conflict, but federal court records show that Connell Foley was defense counsel in a putative class action alleging that Cahill conspired to conceal evidence in representing a corporate client in asbestos litigation, Williams v. BASF Catalysts LLC, 11-cv-1754, filed in March 2011.

The plaintiffs — on behalf of people who allegedly died from exposure to asbestos-laden talc used in the manufacture of tires and other industrial applications — claimed attorneys from BASF and Cahill destroyed laboratory test results and other evidence, filed false affidavits, provided misleading discovery responses and quietly settled cases while requiring the plaintiffs to keep mum about damning evidence.

Among the named defendants were Cahill attorneys Howard "Peter" Sloane, Ira Dembrow and Scott Martin.

The defendants moved to dismiss the suit, citing litigation privilege and calling it an attempt to reopen resolved cases. In December, U.S. District Judge Stanley Chesler in Newark dismissed with prejudice, based on failure to state a claim on which relief can be granted and on the federal Anti-Injunction Act, which forbids judges from invalidating other courts’ orders. An appeal is pending.

Connell Foley partner Robert Ryan, Cahill’s lead counsel in the Willliams case, did not return a call on Friday. Neither did Cahill spokeswoman Lynn Tellefsen or executive committee chairman William Hartnett.

Rutgers said the parameters of the investigation remain unchanged. Skadden will make recommendations on any actions to be taken by the Rutgers administration and the university’s governing bodies, and the results of the review will be made public.

Rice was terminated on April 3, the day after ESPN aired video — compiled from three years’ worth of practices — showing him shoving players, throwing basketballs at them and rattling off epithets such as "faggot" and "fairy."

Rutgers officials had been aware of the video much earlier. In November, the university’s general counsel, John Wolf, retained Connell Foley to conduct an internal investigation into whether Rice’s conduct violated the university’s anti-discrimination or anti-harassment policies or his employment contract.

Connell Foley partner John Lacey issued a report on Jan. 21 that concluded some of Rice’s behavior "crossed the line" and could reasonably be interpreted to bring shame and embarrassment to the university in violation of his contract.

But Lacey also said he could not conclude that Rice’s behavior amounted to the legal definition of a hostile work environment.

Athletic director Tim Pernetti chose to suspend and fine Rice rather than terminate him, a decision to which university president Robert Barchi deferred.

After the video became public, Barchi and board of governors chairman Ralph Izzo said the decision not to fire Rice earlier was based on outside counsel’s advice.

Wolf stepped down from his leadership position and ultimately resigned. He was replaced by Rutgers Law School-Newark Dean John Farmer Jr.

Officials first disclosed plans to appoint an outside investigator on April 8 and hired Cahill two weeks later.

In the latest move tied to the scandal, Mark Hershhorn, a member of the board of governors, stepped down as chairman of the university’s Committee on Intercollegiate Athletics after drawing criticism for allegedly seeing the video and not reporting it to the full board. He remains on the board, according to Rutgers spokesman E.J. Miranda. •

David Gialanella is a reporter for the New Jersey Law Journal, a Legal affiliate.