$103 million Verdict Against Baker & McKenzie
October 30, 2010
They say sometimes reality is better than fiction. Here, the details as alleged are simply fantastic! Even the language used in the complaint fits the bill perfectly. I look forward to the book!
The suit was brought by S. Lavon Evans Jr., who had sought $150 million in actual and punitive damages. He began a drilling company in 1995 in Laurel, Miss., and four years later began drilling wells for businessman Reed Cagle, whose various businesses were represented by Held and Baker & McKenzie, according to the suit.
Cagle introduced Evans to his attorney, Held, whom Evans retained. And for the next several years, Cagle and Evans engaged in various business ventures, including construction of two drilling rigs while Held represented both men.
What Evans didn’t know, according to the suit, was that Cagle was insolvent and, despite an agreement that disallowed it, was using Evans’ significant assets, with Held’s help, to obtain millions of dollars in loans.
In one instance, unbeknownst to Evans, Cagle allegedly used a drilling rig as collateral to obtain a $7 million loan, according to court documents, while at the same time he refused to pay invoices for the rig’s construction or money he owed Evans. Meanwhile, after the rigs were built without any contribution from Cagle, he and his attorneys attempted through various means to give Cagle ownership of the rigs, the suit alleges.
According to the complaint, the defendants drafted legal documents that established subsidiaries of the joint company in Evans’ name and controlled by Cagle, without advising Evans that they had been created. The subsidiaries and Evans’ assets were then used to obtain other loans, which would show up in the bank account of their company, then immediately be withdrawn for Cagle’s other uses.
It wasn’t until early 2007 that Evans realized, after an accountant reviewed the company’s books, that Cagle was insolvent.
When Evans tried to dissolve the business relationship, Cagle and his attorneys “instituted a litigation strategy to bring Evans to his knees,” the suit alleged. Cagle and his various companies accused Evans of stealing the rigs out from under him and obtained a restraining order to intimidate Evans into handing his assets over to Cagle, the suit said.