Risk Update

Conflicts News & Allegations — Lawyers Finances in Focus, Retaliatory DQ Accusation

PG&E victims’ lawyer scrutinized over Wall Street connections” —

  • “San Antonio lawyer Mikal Watts was telling the group about a $13.5 billion settlement he had helped broker with PG&E Corp. to pay victims of fires caused by the company’s power lines. Watts’ clients stood to benefit from that deal, a major milestone in PG&E’s bankruptcy case that became public days earlier.”
  • “Flipping through a presentation projected on a screen flanked by a Christmas tree and a U.S. flag, Watts reviewed the details of the settlement. Then, after at least 50 minutes of talking, he shifted gears. He jokingly told victims that he wanted to ‘be your daddy’ for a little bit, according to a video reviewed by The Chronicle.”
  • “Victims needed to consider ‘all sorts of conflicts of interest out there,’ Watts said. He stressed that he knew he had to earn his clients’ trust.”
  • “What followed was a somewhat confusing spiel about his ‘huge’ line of credit and various exchanges he had with other lawyers and Wall Street financiers before he agreed to the settlement with PG&E. Watts said he learned along the way that part of his line of credit had been ‘in effect, cordoned off,’ or allocated, to two New York financial firms, Apollo Global Management and Centerbridge Partners.”
  • “Apollo holds more than $600 million of PG&E debt and insurance claims against the company, according to court papers filed in April… Members of the group have said in court papers and interviews that Watts’ remarks signal a potential conflict of interest that he did not properly disclose. They have asked PG&E’s bankruptcy judge to intervene, arguing that fire victims were not fully informed when they began voting on the company’s plan to resolve its bankruptcy a few weeks ago.”

Tyson Slams ‘Retaliatory’ Bid To DQ Judge Who Repped It” —

  • “A law firm facing disqualification and its client shouldn’t be able to force out an Arkansas federal judge from a $5 million liability case because he once represented Tyson Foods Inc., as they are retaliating against him because he questioned whether the firm should exit the litigation, the food giant has contended.”
  • “Conway Olejniczak & Jerry SC and its client Robinson Metal Inc. fail to meet the standard set by legal precedent for U.S. District Judge Timothy L. Brooks to recuse himself from the case, even though the judge represented Tyson in unrelated matters about a decade ago, according to the response brief filed on Wednesday by subsidiary Tyson Mexican Original Inc.”
  • “‘Robinson’s motion to disqualify amounts to little more than a retaliatory and slanderous assault on the integrity of this court and its sound rulings on Robinson’s motion to dismiss,’ the response brief reads, ‘as well as a poorly disguised effort to both intimidate and discourage the necessary disqualification of its current counsel.'”
  • “Judge Brooks in March ordered Robinson to demonstrate why Conway Olejniczak should not be disqualified, given that attorney Steven J. Krueger had been deposed as part of the litigation and likely would need to serve as a witness in the case.”