Ex-Client of Cravath Battles Firm's Current Client in Conflict Case Venue War
Updated: Today was the day that a Pennsylvania state-court judge was supposed to conduct a hearing on a former client’s claim that Cravath Swaine & Moore is conflicted out of representing a competing company in a $5.1 billion takeover bid.
But that didn’t happen, because Cravath and its current client, Air Products, removed the matter to a federal court in Philadelphia, reports Reuters.
Meanwhile, Air Products has also asked Delaware Chancery Court to consider the conflict issue there, while Airgas has asked the state court to defer to the Eastern District of Pennsylvania. The legal filings that led to this venue war were initiated on Feb. 4, when Air Products filed suit in Chancery Court contending that Airgas Inc. hadn’t given proper consideration to its $5.1 billion takeover bid. On Feb. 5, Airgas sued Cravath in Pennsylvania state court over the alleged conflict.
A Bloomberg article recounts the gist of the salvos now being fired in the ongoing battle:
“Having disrupted the expedited proceeding previously under way in the Pennsylvania court, Air Products now asks this court to take up the very same disqualification issue on an accelerated basis, presumably in order to preempt the federal court from deciding the matter,” says Donald Wolfe Jr., who represents Airgas, in a letter to Chancellor William Chandler of the Delaware court.
But it’s Airgas, not Air Products, that’s trying to do an end run around standard court procedure, says attorney Kenneth Nachbar, who represents the bigger Air Products company.
“Having long known of Cravath’s work for Air Products on this matter, Airgas could have opposed Cravath’s representation of Air Products in this case by filing a motion for disqualification,” he says in his own letter to Chandler. “Airgas chose instead to circumvent this court’s authority and sued Air Products’ counsel, Cravath, in Pennsylvania.”
In a written statement provided to Reuters, Airgas sums up the gist of its complaint: Cravath “is in possession of material, nonpublic information and has betrayed its longtime client.”
An Air Products “spokesperson” declined to comment, the news agency reports.
Earlier coverage:
ABAJournal.com: “Ex-Client Loses TRO Bid to Ban Cravath in $5.1B Deal, But Could Win Next Round Next Week”
Updated at 6:53 p.m. to recharacterize Cravath’s representation of Air Products.
