FTX investors drop Sullivan & Cromwell lawsuit, Girardi firm CFO to plead guilty, plaintiffs ask to move J&J bankruptcy case to New Jersey, and more ?
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?? Good morning from The Legal File! Here is the rundown of today's top legal news:
?? FTX investors drop lawsuit against law firm Sullivan & Cromwell
A group of FTX investors told a Miami federal court Wednesday that they are?voluntarily dismissing their proposed class action against prominent U.S. law firm Sullivan & Cromwell.
The investors?had accused?Sullivan & Cromwell of participating in the defunct cryptocurrency exchange's multibillion-dollar fraud and then enriching itself as FTX's lead bankruptcy counsel. The firm had represented FTX on about 20 matters before it collapsed.
But lead plaintiffs' counsel Adam Moskowitz cited the work done by FTX bankruptcy examiner Robert Cleary of Patterson Belknap Webb & Tyler, who found in reports issued in?May?and?September?that Sullivan & Cromwell was not complicit in the fraud that caused the crypto company's collapse and had not ignored red flags during its representation of former FTX CEO and founder Sam Bankman-Fried.
"Bob Cleary's second report gave us enough evidence that there was no claim there," Moskowitz said.
A Sullivan & Cromwell spokesperson said in a statement that the firm is "pleased that the plaintiffs have withdrawn their meritless claims unconditionally, and our focus remains on returning billions of dollars in recovered assets to FTX’s creditors."
?? Tom Girardi law firm CFO to plead guilty to wire fraud
The former chief financial officer of disbarred California attorney Tom Girardi's law firm is poised to plead guilty to federal criminal charges stemming from his alleged theft of millions of dollars in client funds.
Christopher Kamon will plead guilty to two counts of wire fraud, resolving the two criminal cases federal prosecutors in California brought against him, according to a?plea agreement?filed on Tuesday evening.
Kamon is expected to change his earlier not guilty pleas at a Friday hearing before U.S. District Judge Josephine Staton in Los Angeles.
The plea agreement said that Kamon faces a maximum prison sentence of 40 years, although prosecutors said they would seek a shorter sentence under the deal. Kamon will also have to forfeit $3.1 million under the agreement.
?? CVS, UnitedHealth, Cigna ask FTC's Khan to disqualify herself from insulin case
CVS Health, UnitedHealth Group?and Cigna?have asked U.S. Federal Trade Commission chair Lina Khan and commissioners Rebecca Kelly Slaughter and Alvaro Bedoya to disqualify themselves from an FTC lawsuit that has accused the companies of unlawfully inflating insulin prices.
The three companies own the country's largest pharmacy benefit managers - Caremark, Optum and Express Scripts. They filed their motions with the FTC's in-house court and shared it with Reuters.
The companies said Khan, along with Slaughter and Bedoya, displayed bias against pharmacy benefit managers and prejudged their pricing models.
The FTC suit?accuses CVS Health's Caremark, UnitedHealth's Optum, and Cigna's Express Scripts of unfairly limiting access to insulin drugs with lower list prices and steering patients toward more expensive drugs to increase the spread of profit from negotiated discounts.
An FTC spokesperson declined to comment.
??J&J talc opponents decry bankruptcy as 'deja vu all over again'
A Johnson & Johnson subsidiary got off to a contentious start on Oct. 7 in its third attempt at a multibillion-dollar bankruptcy settlement that would end tens of thousands of lawsuits alleging that the company's baby powder and other talc products caused cancer.
Attorneys for cancer victims said the bankruptcy was a sham at the first court hearing in the case. They urged U.S. Bankruptcy Judge Chris Lopez in Houston to toss the case or send it to New Jersey, where J&J is headquartered and where the healthcare giant's previous attempts at bankruptcy were dismissed.
The J&J subsidiary, Red River Talc,?filed for bankruptcy?protection in Texas on Friday, seeking to finalize a proposed settlement that would pay as much as $10 billion in value over 25 years to end litigation by over 62,000 current talc claimants and prevent anyone from bringing new talc cases against J&J.
Lopez ruled that no talc litigation can proceed against J&J until Oct. 11, while he considers whether Red River's bankruptcy case should proceed in his Houston court or not.
"Right now everything needs to stop until we figure out where this bankruptcy case will ultimately have a home," Lopez said. "There has got to be one judge who is in charge of this."
David Molton, who represents law firms opposed to the deal, said at Monday's hearing that the third bankruptcy attempt was "doomed to fail," despite the company's efforts to present the settlement as a done deal.
"J&J's bankruptcy scheme buys delay, but not peace," Molton told Lopez. "It's deja vu all over again for many of us."
?? That's all for today, thank you for reading?The Legal File and have a great day!
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