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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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Securities Law Exchange BlogSecurities Law Exchange blog offers insight on the latest legal and regulatory developments affecting publicly traded companies. It focuses on a wide variety of topics including regulation and reporting updates, public company advisory topics, IPO readiness and exchange updates including IPO announcements, M&A trends and deal news.

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Chris Lazarini Provides Insight on Case Claiming Legal Malpractice Related to Broker-Dealer Securities Violations

Securities Litigation Commentator

Publications

June 13, 2016

Bass, Berry & Sims attorney Chris Lazarini provided insight on the case of Damian vs. Carey & Winston & Strawn LLP in which the court-appointed receiver of a broker-dealer that committed securities violations sued the broker-dealer's attorneys for alleged malpractice. The Court denied the motion.

Chris provided the analysis for Securities Litigation Commentator (SLC). The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the SLC, please visit the SLC website to sign up for the newsletter.

Damian vs. Carey & Winston & Strawn LLP, No. 15-c-4335 (N.D. Ill., 3/4/16) 

The mere fact that a broker-dealer commits securities violations as a result of its officers ignoring its attorneys' advice and failing to disclose to the attorneys that the advice was based on faulty assumptions does not preclude a claim for legal malpractice by the broker-dealer's receiver against the attorneys. 

In 2014, the Southern District of Florida granted summary judgment to the Commodity Futures Trading Commission in its fraud action against commodities brokerage Hunter Wise Commodities, LLC ("Hunter Wise"), and its principal officers ("Officers"), imposing a $55 million civil penalty jointly and severally against them. The Florida court appointed Plaintiff as Special Monitor and Corporate Manager for Hunter Wise, granting her full authority to sue others to preserve and increase the receivership estate.

Plaintiff sued Defendant attorneys, whom Hunter Wise retained to advise it regarding the impact of the then-pending Dodd-Frank Act on the company's business, alleging that they committed legal malpractice. Defendants moved to dismiss on collateral estoppel grounds, arguing that the Florida court found that the Officers ignored Defendants' Dodd-Frank warnings, knowing, but without disclosing to Defendants, that aspects of it were based on Defendants' faulty assumptions.

Examining the Florida court's opinion, the Court denies the motion. The malpractice claim, the Court explains, involves an examination of the adequacy of Defendants' representation of Hunter Wise, what Defendants were asked to do, what information Defendants were given, what Defendants might have done differently had they investigated more fully, and what Defendants allegedly neglected to do. Because the Florida court did not examine these issues, the Court finds that Defendants failed to demonstrate that the issues sought to be precluded are the same as the issues decided in the prior litigation. 

The Court telegraphs that it does not think much of the malpractice claims, suggesting that Plaintiff will face "a steep uphill battle" in convincing a fact finder that Defendants' acts or omissions proximately caused Hunter Wise to suffer damages, but noting that, at this stage, Plaintiff has stated a minimally plausible claim for legal malpractice.


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