OUTCOME: Plaintiff's case dismissed due to perjury
A large automotive supplier, was sued for approximately $3 million in royalties allegedly owing for certain technology under a royalty agreement. The technology had previously been outsourced to one of... our client’s suppliers, who assumed responsibility to pay the royalty on our client’s behalf. The supplier stopped paying the royalty when it learned that the plaintiff-inventor may have misrepresented its rights in the technology. During the lawsuit, we discovered that the supplier had secretly made payments to a former employee of our client at a time he was employed by our client. The plaintiff and former employee denied that the payments were improper. They repeatedly swore that the monies were payment for unrelated consulting services performed on nights and weekends, and billed on an hourly basis. However, at trial, we demonstrated that the plaintiff and former employee lied about their relationship. We established that nearly every payment the plaintiff made to the former employee was equal to 50 percent of each royalty payment paid by our client – not for hourly services. During the plaintiff’s case-in-chief, we asked the Court to dismiss the case based on this perjured testimony. The Court granted the motion, dismissing plaintiff’s case and awarding to our client its costs and attorneys’ fees necessitated by the fraud. The Court also referred the matter to the Prosecuting Attorney’s office for investigation of criminal perjury charges.
To read the opinion, go to http://www.millerlawpc.com/opinions/opinion_01.htm
Litigation
Vestevich v. West Bloomfield Township
N/A
OUTCOME: Affirm order vacating consent judgment
Mr. Newman was retained by 28 homeowners in West Bloomfield Township after they have learned that property adjacent to their homes had been re-zoned from a residential classification to a commercial cl...assification without a public meeting. Years earlier, the owner/developer of the property had petitioned the Township to re-zone the property, but his request was denied and he filed a lawsuit in Oakland County Circuit Court and lost. After he exhausted all his appeals, he went back to the Township, and reached a secret settlement which gave the developer the very relief that he had requested in his lawsuit, which he lost years earlier. We filed a lawsuit for the violations of the Open Meetings Act. The Oakland County Circuit Court issued an opinion in which it held that the board's action violated the Open Meetings Act, and its opinion was subsequently upheld by the Michigan Court of Appeals.
The opinion can be found here: http://www.millerlawpc.com/opinions/Vestevich%20v%20W%20Bloomfield%20Twp%20July%2010%202001%20Opinion.pdf
On March 13, 2009, the United States District Court for the Southern District of New York appointed The State of Michigan Retirement System as Lead Plaintiff on behalf of the class of purchasers of AIG... securities. The Court also appointed the Miller Law Firm as co-Lead Counsel. Mr. Newman has been appointed Special Attorney General to the State of Michigan and admitted to the Southern District of New York for purposes of representing the State of Michigan and the Class.
Litigation
in Re General Motors Derivative Litigation
N/A
OUTCOME: Settlement
Plaintiff filed this derivative shareholder action on behalf of General Motors against certain of the Companies’ Officers and Directors, alleging that the Directors failed to properly oversee the Com...pany’s financial reporting, causing loss to the Company and its shareholders.
The Settlement consists of major governance reforms designed to address these accounting problems and to increase the power of the Company’s Independent Directors. Under the terms of the Settlement, GM agreed to adopt significant corporate governance improvements that are designed to remedy the alleged accounting and oversight problems underlying the litigation and increase the power of the Independent Directors. The corporate governance reforms were developed with the significant involvement of Harvard Law School Professor Lucian Bebchuk, one of the foremost experts on corporate governance, and he is the Director of the Program on Corporate Governance at Harvard Law School.
The following are among the corporate governance improvements obtained by Plaintiffs’ counsel in the Settlement:
• the addition of a second “audit committee financial expert†to the Board;
• limits on the number of audit committees on which Directors may serve;
• limits on the number of other companies’ boards on which Directors may serve;
• empowering the general auditor to have direct access to the Audit Committee Chair;
• encouraging Audit Committee and Board members to visit GM facilities and to seek information relevant to their service;
• ensuring that relevant materials are provided to Audit Committee members at least 48 hours before Committee meetings;
• ensuring that, upon a material restatement or reclassification, the Audit Committee makes appropriate inquiry about the cause to determine if any other action should be taken and if additional internal controls should be implemented to prevent recurrences in the future;
• ensuring that the Executive Compensation Committee will review the current Executive Compensation Recoupment Policy to determine if it should be revised;
• mandating that Directors attend the annual meeting, at least 75% of the Board meetings and 75% of the meetings of committees on which they served for two consecutive years or face the prospect of not being re-nominated to the Board;
• requiring that materials are sent to Board Members at least 48 hours ahead of
meetings;
• ensuring that the Board, the DCGC and the Audit Committee have the opportunity to
meet in executive session at least three times per year, without management present;
• requiring that the Presiding Director shall be elected by the Independent Directors and that the Presiding Directorship shall rotate at least once every five years;
• permitting subjective factors to be used by the Independent Directors in evaluating
the CEO’s performance;
• enabling the Presiding Director to take the lead in reporting to the Board on succession planning for the CEO;
• allowing the DCGC to confer with whomever it prefers regarding Board committee assignments and chairmanships; and
• allowing the Presiding Director to have final approval of the agenda for Board meetings, including addition and deletion of agenda items.
GM has implemented all of the agreed-upon governance changes and the Court granted approval of the Settlement on December 22, 2008. The Court also awarded $5 million in attorneys’ fees to Plaintiffs’ counsel, and reimbursed expenses of $384,145.49.
