$12,600,000 Jury Verdict on Fraud Claims Against Major Law Firm
$12,600,000 Jury Verdict on Fraud Claims Against Major Law Firm. Punitive Damages Yet to be Decided
AKRON, Ohio (Oct. 29, 2012) – On Wednesday October 24, a Hamilton County jury handed down a verdict of $12,600,000 largely on behalf of public employee pensioners and other retirees in connection with a 2006 investment in a company in the aerospace and industrial gas turbine industries. The jury found that defendants, the Cincinnati-based law Firm of Dinsmore & Shohl, LLP and its partner Harvey Cohen committed fraud on the buyers in connection with a 2006 private equity investment in which the defendants represented the sellers.
While the buyer was negotiating the purchase of a Cincinnati-area company called Douglas Machine and Tool, Inc. the buyer requested information regarding any threatened litigation related to the selling company and its shareholders and officers. At the time, a major dispute was pending among the selling company’s management shareholders and non-management, minority shareholders. Some of the minority shareholders had threatened to sue management and the company for theft and breach of fiduciary duty.
The suit alleged that the defendant attorneys were aware of the threats and a secret settlement but failed to disclose this. As a result, the buyer proceeded with the $19 million purchase of the company without knowledge about serious allegations which called into question the integrity of the company’s management and subsequent settlement agreements between those shareholders.
TurboCombustor, as successor in interest to buyer, filed a lawsuit against Cohen and Dinsmore & Shohl in the Hamilton County Court of Common Pleas alleging claims of fraud and negligent misrepresentation. During the ensuing two-week trial, one of TurboCombustor’s expert witness, Geoff Stern, former Disciplinary Counsel to the Ohio Supreme Court, testified that the defendants, Cohen and Dinsmore & Shohl, committed fraud. After deliberating for various periods over the course of three days, the jury returned a unanimous verdict in favor of TurboCombustor and against Cohen and Dinsmore & Shohl in the amount of $12,600,000.
Mark Skakun and David Kern of Buckingham Doolittle & Burroughs, LLC and Dennis Murray, Jr. of Murray and Murray Co., L.P. A. worked together to obtain this verdict on behalf of their client. Messrs. Skakun and Murray each commented that this verdict “sends a strong message that the law in our State remains what it has always been – that when attorneys speak, they have the obligation to speak truthfully and to not assist their clients in committing fraud.” Mr. Kern indicated that “he was very thankful that the coordinated efforts of the team working on the case was able to recover money on behalf of the client and its investors, many of which are public employee retirement funds.”
The judgment should increase after interest and applicable fees are added. The punitive damages phase of the trial remains to be conducted.
Additional information can be obtained by calling Dennis E. Murray, Jr. at 419-624-3126,Mark Skakun at (330) 491-5319, or David Kern at 330-258-6489.
Contact: Wendy K. Clifford, Business Development and Marketing Manager
Phone: (216) 615-7314 or [email protected]