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January 2016 Archives

Law Firm Conflict Of Interest Impacts Oregon Ponzi Scheme Compensation

Law firm conflict of interest contributes to high cost of recouping funds in Lane County's largest Ponzi scheme.

The money to be used for compensation in Berjac of Oregon's alleged Ponzi scheme is dwindling due to high attorney fees that must be paid before hundreds of investors receive payouts.  Over $1.22 million in expenses is being billed by a Portland firm hired by the trustee - a firm that was ultimately dropped from the case when it was revealed to have a conflict of interest involving Umpqua Bank. The hunt for compensation cash now has narrowed to whether two Oregon banks and a Eugene accounting firm are proved partly liable for Eugene-based ­Berjac's activities. The U.S. Bankruptcy Court trustee overseeing the liquidation of Berjac's assets has collected about $11 million by selling Berjac-linked real estate and recovering money from Berjac co-owners Michael and Gary Holcomb and other beneficiaries of the alleged rip-off. But from that amount must be paid the trustee's legal and other bills, which total several million dollars. After that, the roughly 375 investors -- many of them from Lane County -- receive payouts. Those investors are owed about $40 million by Berjac, said Thomas Gerber, an attorney who works for the trustee. The two banks -- Eugene-based Pacific Continental Bank and Portland-based Umpqua Bank, and the Eugene-based accountant, Jones & Roth -- are the last remaining big potential sources of compensation. Some investors despair of getting much back. Eugene resident Sally Piernick, 63, in December wrote to the bankruptcy judge complaining about the high trustee attorney fees and her low chances of recouping much of the roughly $171,000 she had with Berjac when it went under. "Many of us  ...  mentally let go of ever getting our money back," she wrote. "The loss of (my) money affected my life severely then and continues three-plus years later." In the years leading to its collapse in 2012, Berjac used investors' cash to pay interest to other investors, pay Holcomb family members extra-high interest rates on their investments in Berjac, buy luxury items, and delve into speculative real estate projects that flopped in the Great Recession, bankruptcy records show. Investors had thought they were putting their money into Berjac's insurance-premium financing business. Berjac typically paid investors 4 percent to 5 percent annual interest, often for several years. But investors lost all their principal -- in many cases hundreds of thousands of dollars per person -- when the firm went bankrupt in August 2012. It's Lane County's biggest alleged Ponzi scheme ever. Now, one of the last questions centers on whether Jones & Roth -- for auditing Berjac's books -- and the two banks -- for lending money to and receiving payments from Berjac over many years -- were culpable for helping prop up the scheme. "The next big thing is what will happen with the banks" and the accounting firm, Gerber said. In theory, the three could be found liable for the $30 million or more it would take to repay investors in full, he said. But the trustee's lawsuit in U.S. District Court in Eugene against the banks and Jones & Roth still is in its early stages. The three firms dispute that they bear any blame. They have tried, unsuccessfully, to get the federal case dismissed. They declined to comment to The Register-Guard. Investors are frustrated by the slow and expensive legal process. Springfield attorney Thomas Huntsberger, the trustee appointed by the Bankruptcy Court, and the attorneys and accountants working for him, have run up large bills trying to retrieve money for investors. That retrieved money is used to pay the legal bills. Portland law firm Bullivant Houser Bailey, hired by Huntsberger to work on the case from 2012 to May 2014, is in a deepening fight over the $1.22 million bill it submitted to the trustee. While Bullivant worked for Huntsberger -- trying to recoup money from Umpqua Bank and others -- it was using Umpqua as its business lender, taking loans from the bank. Bullivant did not tell Huntsberger about this potential law firm conflict of interest until late May 2014, court records show. On May 29, 2014, Huntsberger dropped Bullivant. Huntsberger then had to rapidly assemble a new legal team to pick up Bullivant's work. The new team had just three months to file claims against entities and people potentially liable for Berjac's debts before the Aug. 31, 2014, Bankruptcy Court deadline for those submittals. Bullivant asserts it did quality work for the trustee and that its relationship with Umpqua presented no conflict. However, Bullivant admitted in a letter to Huntsberger that the ­Bullivant-Umpqua business relationship might make it "appear that our firm was not completely zealous in its evaluation and pursuit of any claims against Umpqua." Portland residents George and Melissa Rex, who lost $450,000 they had invested with Berjac, said in a December letter to the court that Bullivant's conflict of interest and its legal bill are "absolutely outrageous and on the surface appears to be gouging and tantamount to victimizing us creditors yet a second time." Eugene resident ­David Barjas also is angry about Bullivant's bill. Barjas wrote to the court that his investment with Berjac was $106,266 -- about 60 percent of his net worth. A company that buys high-risk debt recently offered him $4,250 for his bankruptcy claim, the disillusioned Barjas told the court. With the legal costs and Berjac's lack of assets, retired Eugene attorney John Cox, who had $443,000 invested with Berjac when it folded, said that unless Umpqua, Pacific Continental and Jones & Roth are found liable, he'd be surprised if investors get back 15 cents on the dollar of what they are owed. A version of this content was originally posted by Christian Wihtol on The Register Guard online. Law Firm Conflict of Interest Representation  - Ball & Bonholtzer Trial Attorney - Los Angeles

Defense Verdict In Med Mal Case Seeking $15 Million

Defense prevails in med mal case brought by family of brain damaged woman.

A jury returned a defense verdict in an emotionally-charged med mal case in which the husband of a Georgia woman left severely brain damaged due to complications during a surgical procedure sought at least $15 million. "There have been a number of substantial plaintiffs' verdicts over the past few years, and I've heard it said that, when somebody goes into a hospital and comes out with substantial injuries, it's going to cost millions," said lead defense lawyer R. Page Powell. "This verdict proves that, despite the underlying tragic outcome this plaintiff suffered, a jury can still focus on the facts and details of the case, and decide on the evidence." Powell, who tried the case with Huff, Powell & Bailey partner L. Evan Cline, said that the lowest amount the plaintiffs sought to settle the case prior to trial was for the $7 million limit of the defendants' combined insurance coverage. Plaintiffs lawyer Jack Slover, who tried the case with Slover, Prieto, Marigliano & Holbert partner Jonathan Marigliano, said they are considering possible appeal options, but that the case may not offer many. "We're looking at it," said Slover. "It was clean case; Judge [Jay] Roth did a good job, the defense did a good job. Over the three years of the case, we had worked out all the issues from an evidentiary standpoint, so there are no big issues there." "It's still real emotional for me," said Slover the day after the verdict was read. "I was a [civil] defense lawyer for many years, and I've also tried murder and death-penalty cases in my career. I have to say this is one of the more traumatic and difficult cases I've ever tried. We got very close to this family." According to the attorneys and case filings, Esmeralda Palacios was a 39-year-old mother of twins with a history of asthma and lung problems when she underwent a lung biopsy at Northside Hospital in March 2012. Palacios was anesthetized, and a Northside staffer attempted to place a breathing tube down her throat and into her lungs. There was some difficulty, and Palacios' blood oxygen levels began to fall. When anesthesiologist Laura Kaufman squeezed the oxygen bag on Palacios' oxygen mask, said Powell, she felt resistance and called for assistance from another anesthesiologist, Donald Silverman. After multiple efforts, the doctors were able to get the tube inserted, but Palacio's oxygen saturation levels continued to plummet, and there was no indication that she was breathing for several minutes as the doctors and other hospital staff worked feverishly to clear her airway. Palacios went into cardiac arrest, and as a result of the loss of oxygen, she suffered brain damage that left her in what Powell said was a vegetative or near-vegetative state. In May 2013, Slover and Marigliano filed suit on behalf of Palacios' husband, Raul Palacios, and her co-conservator in Fulton County State Court, naming Kaufman, Silverman and Northside Anesthesiology Consultants as defendants. There were never any substantive settlement discussions, Powell said. Prior to a mediation earlier this month, the plaintiffs had sought the defendants' policy limits--$3 million for each doctor and $1 million for the anesthesiology practice--and there was "little movement during mediation," Powell said. "Given the severity of her injuries, it was difficult for the plaintiffs to consider anything other than a multimillion-dollar settlement, which I understand," said Powell. "It was kind of an all-or-nothing case; we just couldn't consider anything close to what they wanted. It was just a case that needed to go to trial." The trial began Jan. 11 before Roth, with interruptions for Martin Luther King Jr. Day and a half-day weather-related timeout. Powell said there was some argument as to whether Kaufman had taken adequate precautions for the likelihood that Palacios might experience a bronchospasm, or asthma attack, during the procedure. But the "key to the case" involved whether the doctors had been quick enough to administer epinephrine when Palacios began going into cardiac arrest, Powell said. The main plaintiffs' witness was Tampa anesthesiologist Hans Schweiger, Powell said, while defense experts included anesthesiologists Eric Fishman with WellStar Health System and Stephanie Roundtree with the DeKalb Medical Center. But the main defense witnesses were the defendant doctors themselves, said Powell, who were adamant that their preparation and conduct of the procedure was proper. "We focused on liability; we never contested damages, never contested that her injuries were by the lack of oxygen," he said. "We argued standard of care and causation--whether, even if had given the epinephrine five minutes earlier, would it have prevented brain injury? We argued that, given the severity [of the blockage]--their own expert called it an '11' on a 1-to-10 scale of severity--it wouldn't have made a difference." During closing arguments, Powell said the plaintiffs' lawyers asked for a range of damages based on various life expectancies and whether Palacios remained in Georgia or was moved back to California with family. "By my estimate, the lowest figure would have been around $15 million, and the highest would have exceeded $30 million," he said. The trial ended on Jan. 20, and the jury considered the evidence for about 12 hours over the ensuing days before returning a defense verdict on Monday, Jan. 25. Originally posted by Greg Land on Daily Report. Med Mal Case - Ball & Bonholtzer Trial Attorney - Los Angeles    

Union Lawsuit Against Yahoo Alleges Breach Of Fiduciary Duty

Class action by union pension fund alleges violations of Investment Company Act, breach of fiduciary duty, and unjust enrichment.

A shareholders federal class action lawsuit by a union pension fund claims Yahoo must register as an investment company, as investment securities comprise 90 percent of the company's value.

Former Rough Riders In Concussion Lawsuit Against CFL

Ex-Ottawa Rough Riders join CFL concussion lawsuit seeking $200 million.

Families of former Ottawa Rough Riders Gary Schreider and Dennis Duncan, and retired Canadian Football League player Mike Webster, have joined a class-action lawsuit against the CFL claiming damages for concussions and brain trauma. Gary Schreider was a Rough Riders linebacker, running back and kicker from 1956-61 and 1963-64, sandwiched around 1962 stints with the B.C. Lions and Hamilton Tiger-Cats, while Dennis Duncan was an Ottawa running back in 1971 after three seasons with the Montreal Alouettes. Mike Webster, a lineman for the Lions in 1966 and the Alouettes in 1967-70, has also joined the class action that previously included Korey Banks, Eric Allen, Alondra Johnson and the family of Rod Woodward. The concussion lawsuit seeks $200 million in damages for all former CFL players who have participated in practices and games since 1952. It claims the CFL, its teams, former commissioner Mark Cohon, brain-injury specialist Dr. Charles Tator and the Krembil Neuroscience Centre of Toronto knew or should have known about the long-term risk of brain injury resulting from concussive and sub-concussive blows. Those claims have not been tested or proven in court. Schreider died in January 2011 at the age of 76, several years after he was nudged into retirement as a master of Ontario Superior Court. His son, Gary Schreider Jr., said Friday the man who was the first CFL Players' Association president had displayed increasingly severe symptoms of brain-related problems starting in his mid to late 50s. The younger Schreider said he and his mother contacted Robyn Wishart, a Vancouver lawyer representing the class-action participants as well as former CFL receiver Arland Bruce in another concussion-related lawsuit, after reading an Ottawa Citizen story about Woodward in December. "The motivation is getting the message out and to help (former) players that are suffering through this, to get the message out there because I think this was basically hidden from players for the longest time," Schreider said. "So people are aware of this when they play football and let them make their own decisions. I'm not saying stop playing football. Just let people make their own decisions based on what we know now." "I don't really have anything to hide," former CFLer Mike Webster, who sat between Duncan and Woodward in the locker room with the 1969 Alouettes, said Friday. Webster said he was diagnosed with a traumatic brain injury a year ago after collapsing while at work at a military hospital on Vancouver Island. He still practises, but under supervision by the College of Psychologists of British Columbia. "I don't care if I get a penny out of (the lawsuit)," Webster added. "I would just like to do that for guys I played with and against. ... Luckily at present I'm not as severe as many of my teammates. I've got Roddy Woodward in mind when I say that." Woodward, who spent most of his CFL career as a defensive back and punt returner for the Rough Riders, was recently admitted to hospital. Wishart said Friday the 71-year-old likely would never be discharged and would eventually be transferred to a long-term care facility. The class-action proceeding is on hold pending a decision in Bruce's lawsuit against the league, Cohon, Tator, Krembil Neuroscience Centre and the CFL Alumni Association and its president, Leo Ezerins. The original judge in that case has withdrawn because of illness, so the chief justice of the Supreme Court of British Columbia will hear a fourth day of arguments on Feb. 23. Bruce is seeking to have his day in court, while a lawyer for Cohon and the league argue the case should be heard by an arbitrator because CFL players are represented by a union. "There is no urgency for us," Schreider said of his family, "but I do know there is plenty of urgency with other former players who are suffering now." Originally posted by Gord Holder on Concussion Lawsuit - Ball & Bonholtzer Trial Attorney - Los Angeles

Lawyer Conflict Of Interest Alleged In GM Ignition Switch Bellwether Trials

Attorney asks judge to reexamine settlement fund; claims lawyer conflict of interest on part of plaintiff attorney in first General Motors ignition switch defect trials.

An attorney has requested that the settlement fund established to compensate more than 1,000 customers suing General Motors over faulty ignition switches be reexamined by a judge. Mark Cooper, an attorney representing plaintiffs in the consolidated case, claims

Small Percent Of Doctors Linked To Many Medical Malpractice Claims

Study finds large share of medical malpractice claims linked to very small number of doctors.

 Just one percent of physicians account for one third of paid medical malpractice claims, and these doctors have some distinctive traits in common, according to a Stanford study. "This problem of physicians who accumulate multiple claims and continue to practice ... is a significant policy problem," said lead author David Studdert, a professor of medicine and law at Stanford, "and one that we need to address." In the study, published in the New England Journal of Medicine, researchers looked at more than 66,000 malpractice claims paid against 54,000 physicians nationwide between 2005 and 2014. Researchers focused on paid, rather than unpaid, claims, because that is a marker for substandard care. About one in three malpractice claims is ultimately paid. In the claims the researchers reviewed, one-third resulted in patient death and another 54 percent in serious injury. The study noted that only 6 percent of doctors had any paid claims over the 10-year period studied. The researchers said that the "claim-prone" physicians were disproportionately male (82 percent) and were older, rather than younger. More than half the claims were by doctors in one of four areas: internal medicine, obstetrics and gynecology, general surgery and general practice or family medicine. But the biggest predictor of all in the claim-prone doctors was whether they'd had a prior claim. "Compared to physicians with only one previous claim," Studdert said, "a physician who has had three previous claims is three times as likely to have another one. A physician who has had four is four times more likely and so on." In the study the researchers are clear that they have identified risk factors but that it is up to health care systems, hospital and malpractice insurers to identify and work with these doctors. But they noted that few of these organizations do. "With notable exception," the researchers write, "fewer still systematically identify and intervene with practitioners who are at high risk for future claims." They call for further investigation into predicting which doctors are at risk and then implementing interventions such as training and supervision to improve their quality of care. In California, patients can look up their doctor on the state's medical board website. Depending on the type of malpractice settlement, it will be part of the public record if the doctor has had either three or four settlements within a five-year period. Other information is also available, including whether your doctor has had a felony conviction or is on probation. Patients can use the website simply to determine that a doctor's license is valid. But advocates like Lisa McGiffert, with Consumers Union's Safe Patient Project, say that's not enough and have been pushing the Medical Board of California to require that doctors placed on probation notify their patients. The board has resisted taking this step. "This study is one more piece of information that regulators can use in determining their strategy in addressing the small percentage of doctors who have problems in their treatment of patients," she said. A version of this story first appeared on KQED's State of Health blog. Medical Malpractice Claims - Ball & Bonholtzer Trial Attorney - Los Angeles

Compulsive Gambling At Center Of Abilify Lawsuits

Abilify lawsuits allege patients developed gambling addictions as a result of taking the atypical antipsychotic medication.

Product liability lawsuits filed against Bristol-Myers Squibb Co. and Otsuka Pharmaceutical Co. allege the manufacturers of Abilify failed to adequately warn doctors and patients of the potential risk of developing compulsive behaviors, such as gambling addictions, as a side affect of taking the drug. Abilify (aripiprazole ) is an atypical antipsychotic used to treat schizophrenia, bi-polar disorder and other psychiatric disorders in adults and children. The medication is marketed by Bristol-Myers Squibb and Otsuka Pharmaceutical Co. Among other things, Abilify impacts dopamine, a neurotransmitter that helps control the brain's reward and pleasure centers. On January 20th, Courthouse News Service reported that an Abilify lawsuit had been filed in New Jersey's Bergen County Superior Court on behalf of a man who claims to have developed a gambling addiction shortly after he began using Abilify in December 2010. The Plaintiff further claims that he was able to stop compulsively gambling after he ceased treatment with the drug in August 2013. According to Courthouse News Service, two additional Abilify lawsuits and compulsive gambling allegations were filed on January 13th in the U.S. District Court, Middle District of Florida. Court records further indicate that on January 12th, a fourth Abilify lawsuit was filed in the U.S. District Court, District of Minnesota, by a woman who allegedly incurred gambling losses in excess of $75,000 due to side effects associated with the medication. According to these complaints, dopaminergic reward pathways have frequently been implicated in the etiology of addictive behavior. Among other things, the Abilify lawsuits point out that scientific literature has identified dopamine as a potential cause of pathological gambling for years. Plaintiffs further note that in 2012, the European Medicines Agency required that defendants warn patients and the medical community in Europe that Abilify might be associated with pathological gambling. In November 2015, Health Canada warned that Abilify may be linked to certain compulsive behaviors, including a possible risk of pathological gambling . Yet the U.S. label for the medication fails to mention that pathological gambling has been reported in patients prescribed Abilify. Originally posted by Sandy Liebhard on Abilify Lawsuits - Ball & Bonholtzer Trial Attorney - Los Angeles

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