Biovail Suit Turns Into Big-Firm Fight
Biovail Corp.’s “well-lawyered strategy” in a case that contends short sellers drove down the price of its stock went awry when a federal judge inquired into violation of a protective order.
U.S. District Judge Richard Owen of Manhattan held nine days of hearings this spring and summer to learn more, American Lawyer reports. The documents had been provided under a protective order in a shareholder class action against Biovail, but they ended up as the basis for the drugmaker’s complaint in its conspiracy suit.
Lawyers considered the documents, including e-mails from a Bank of America analyst, to be evidence of a conspiracy to lower the drugmaker’s stock price.
The cast of characters in the legal drama include:
–Howrey, the law firm defending Biovail in the investor class action.
–Kasowitz, Benson, Torres & Friedman, lead counsel in the conspiracy case.
–DLA Piper, which originally defended Biovail in the class action before it withdrew because of a conflict.
–Schindler Cohen & Hochman, which handled Bank of America discovery in the investor class action.
“Over nine days of hearings that included testimony from 13 witnesses, the lawyers who were to have been Biovail’s saviors have pointed the finger everywhere except at themselves,” the magazine writes. “The Kasowitz firm, to defend itself against suggestions that it knowingly violated a protective order, has laid bare discussions with its client and co-counsel, citing an exception to the rules of attorney-client privilege that permits the firm to counter allegations of misconduct. Kasowitz lawyers have placed blame for the Biovail blowup on Howrey, which has been presented with evidence that it should have warned Kasowitz Benson about the protective order. Howrey, meanwhile, asserts that ultimate responsibility lies with the Kasowitz firm, which was lead counsel in the case in which the protected documents were used.”
At press time, Owen was weighing sanctions in the case.
