Risk Update

Consuming Conflicts — Steak Dinner Debate, Pot Companies Clashes Over Former GC

A Steak Dinner Keeps Ethics Questions Sizzling in J&J’s Talc Bankruptcy” —

  • “On the second day of a hearing on whether to dismiss Johnson & Johnson’s talc bankruptcy, lawyers supporting the Chapter 11 case headed off to Ruth’s Chris Steak House for dinner in Princeton, New Jersey. They weren’t alone.”
  • “Someone took a photograph of them dining with Randi Ellis, appointed to represent future claimants in the bankruptcy filed by Johnson & Johnson subsidiary LTL Management LLC. And Clay Thompson, of Maune Raichle Hartley French & Mudd in New York, who questioned some of the attorneys on the stand earlier that day, then attached the photo to his July 12 motion to disqualify Ellis as the future claims representative. The dinner, he argued, showed a ‘significant appearance of impropriety and collusion.'”
  • “‘Appearances matter,’ Thompson wrote. ‘Dining out with the half-trillionaire tortfeasor’s lawyer —as that tortfeasor is attempting to capture future victims and cram down current ones—is too much to stomach.'”
  • “On Monday, lawyers for Ellis sent a letter asking U.S. Chief Bankruptcy Judge Michael Kaplan to consider sanctioning Thompson, who unsuccessfully moved to disqualify Ellis months earlier on separate collusion allegations.”
  • “‘The motion is nothing more than a continuation of Mr. Thompson’s campaign to smear, threaten and intimidate the FCR and erode the public’s confidence in this court and the integrity of the bankruptcy process,’ wrote Mark Falk, of Walsh Pizzi O’Reilly Falanga in Newark, New Jersey. ‘Mr. Thompson has repeatedly and baselessly harassed the FCR and invoked rhetoric that risks eliciting continued threats directed at this court and the FCR. His behavior has repeatedly crossed the boundaries of advocacy.'”
  • “Such ‘outrageous antics appear intended to create sensational headlines,’ Falk added, noting that Thompson had not taken photos of Ellis in meetings with lawyers for the official talc claimants committee.”
  • “In a statement, Liza Walsh, of Walsh Pizzi O’Reilly Falanga, said Ellis meets with all parties in the case. ‘The motion itself is not worthy of comment as the motion is frivolous, malicious, unprofessional,’ she wrote.”
  • “The disqualification motion is the latest example of the vitriol that prompted Kaplan to caution lawyers to tone down the rhetoric earlier this year. But it is also emblematic of a sharp divide within the plaintiffs’ bar now brewing over whether to approve the Chapter 11 plan.”

Pot Co. Wants Rival’s Atty DQ’ed Over Alleged Conflict” —

  • “Two cannabis businesses accused of backing out of a deal to sell Bob Marley-branded products are seeking to disqualify the general counsel of the company suing them in Washington federal court, saying the attorney was once ‘intimately involved’ with the defendant entities when they were all under the same corporate umbrella.”
  • “Tilray Inc. and its subsidiary High Park Holdings Ltd. accused Patrick Moen on Thursday of violating ethics rules by aiding Docklight Brands Inc.’s breach-of-contract litigation against the pair of companies, alleging that he drafted the licensing agreement in dispute when all three companies belonged to Privateer Holdings.”
  • “Though Moen has not filed for appearance to represent Docklight in the case, he has signed several declarations submitted by Docklight.”
  • “Tilray, a global group of brands that sells cannabis and hemp consumer goods, said in the motion that its relatively new management did not understand until discovery the scope of Moen’s past work for Tilray and High Park.”
  • “‘But defendants’ privilege review of documents in April 2023 revealed that Mr. Moen was deeply involved in negotiating the license on behalf of High Park and Tilray, in structuring High Park and Tilray, including through Tilray’s IPO, and in preparing and approving Tilray’s public filings that are subject to Docklight’s claims of breach of confidentiality,’ Tilray and High Park said in the Thursday motion.”
  • “Upon discovering the conflict of interest, Tilray and High Park claim they asked that Moen recuse himself and Docklight amend a protective order to prevent him from accessing confidential information produced during litigation. But Moen and Docklight allegedly refused.”
  • “‘Defendants’ further investigation revealed that this is not the case of a general counsel of a parent company that occasionally weighed in on legal matters of the subsidiaries,’ Tilray and High Park said. ‘Rather, Mr. Moen had his own Tilray email account, provided advice and privileged materials to Tilray’s board using that email address, and had significant involvement in Tilray’s legal affairs.'”
  • “Moen, now senior vice president for corporate development and legal affairs at Docklight, was general counsel for Privateer from November 2013 through March 2021, according to Tilray’s motion. During that time, as Moen advised the parent company on all legal and compliance affairs, Docklight and Tilray were formed as subsidiaries of Privateer.”