27 Feb 2008 Cases

Coleman (Parent) Holdings Inc. v. Morgan Stanley & Co., Inc.

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In this case, Coleman (Parent) Holdings Inc. (“CPH”) alleged that our client, Morgan Stanley, assisted in a fraudulent scheme to inflate the price of Sunbeam Inc.’s common stock prior to Sunbeam’s stock-for-stock merger with CPH. After the trial court entered a partial default against Morgan Stanley as a sanction for alleged discovery misconduct, we were retained to analyze damages. After performing an extensive economic analysis, Compass Lexecon expert Daniel R. Fischel, working with David Ross and others, concluded that CPH and its expert had failed to prove any damages, but the trial court ruled this testimony could not be presented at trial. The jury then returned a three billion dollar verdict against Morgan Stanley. But the appellate court reversed, holding that CPH had failed to prove any damages, exactly as the Compass Lexecon team had earlier concluded. We were retained by and worked with Mark Hansen of Kellogg Huber at trial and also worked with Philippe Selendy of Quinn Emanuel in anticipation of a possible retrial until the appellate court dismissed the case.

A new version of Compass Lexecon is available.