Justia Professional Malpractice & Ethics Opinion Summaries

This case stemmed from a dispute between Omniglow, LLC's three members (Leemon, Holland, and Achaian). At issue was whether one member of a Delaware limited liability company could assign its entire membership interest, including that interest's voting rights, to another existing member, notwithstanding the fact that the limited liability company agreement required the affirmative consent of all of the members upon the admission of a new member, or, must the existing member assignee be readmitted with respect to each additional interest it acquired after its initial admission as a member. The court held that the answer depended in the first instance on the specific provisions governing the transferability of Interests in Omniglow's LLC Agreement. When Omniglow's LLC Agreement was read as a whole, as it must be, it allowed an existing Member to transfer its entire Membership Interest, including voting rights, to another existing Member without obtaining the other Members' consent. Thus, Holland's assignment of its 30% Interest to an existing member, Achaian, was effective to vest all of the rights associated with that Interest in Achaian, and Omniglow now had two coequal 50% Members. View "Achaian, Inc. v. Leemon Family LLC, et al." on Justia Law

This case stemmed from a dispute between a hedge fund manager and the hedge fund's seed investor. The central issue was contractual and involved whether the hedge fund manager could use the Gate Provision in the Partnership Agreement to lock up the seed investor. The court held that the hedge fund manager's refusal to honor the withdrawal request and return the seed investor's capital in full was a violation of the Seeder Agreement and a breach of contract. The court held that, in the alternative, even if the Gates were potentially applicable, it was a breach of fiduciary duty for the hedge fund manager to use the Gates solely for a selfish reason. Therefore, the court ordered the immediate return to the seed investor of all of its capital and awarded interest to compensate it for the delay. The court also disposed of several other claims raised by the hedge fund manager and the seed investor. View "Paige Capital Mgmt., LLC, et al. v. Lerner Master Fund, LLC et al." on Justia Law

Plaintiffs, shareholders of Ness Technologies, Inc. (Ness), moved to expedite proceedings in this putative class action, which they filed to enjoin a proposed transaction through which Ness's largest shareholder, Citi Venture Capital International (CVCI), would, through a wholly owned subsidiary, acquire Ness in a cash transaction at $7.75 per share (Proposed Transaction). Plaintiffs contended that the Proposed Transaction was the product of a flawed sales process and that the members of the Board, aided and abetted by CVCI, breached their fiduciary duties to plaintiffs and the class by approving the transaction. Plaintiffs asserted both price and process claims and claims that the Board's disclosures regarding the Proposed Transaction were inadequate. The court held that plaintiffs' Motion for Expedited Proceedings was granted only to the extent that they could take expedited, but necessarily limited and focused, discovery regarding the question of whether either the Board's or the Special Committee's financial advisors were conflicted because of their relationships with CVCI. The motion was denied in all other aspects. View "In re Ness Technologies, Inc. Shareholders Litigation" on Justia Law

Disciplinary proceedings against Respondent Steven Perskie (who retired from the judiciary in 2010) began with the filing of grievances with the Advisory Committee in July 2008 by Alan Rosefielde, a party to a civil action over which respondent presided between February 2005 and October 2006. The litigation was a business dispute involving issues that arose from Rosefielde's employment with and eventual termination from a business based in Atlantic City. Rosefielde contended that his termination was due to his recommendation that his employer end its business relationship with an insurance broker named Frank Siracusa, whom Rosefielde alleged had engaged in improper and questionable business practices. Siracusa was a central witness to Rosefielde’s counterclaim. Respondent had a longstanding business, social, political, and personal relationship with Siracusa, but informed the parties to the litigation several times that notwithstanding his relationship with Siracusa, he was not uncomfortable presiding over the case and evaluating Siracusa's credibility if Siracusa were to appear as a witness. The Advisory Committee recommended that respondent be censured for violating multiple Canons of the Code of Judicial Conduct. Upon review, the Supreme Court held that Respondent violated Canons 1, 2A, 2B, and 3C(1) of the Code of Judicial Conduct and R. 1:12-1(f). The Court censured Respondent. View "In the Matter of Steven P. Perskie, a Former Judge" on Justia Law

This appeal arose from an earlier trial relating to the Enron scandal. The government alleged that Enron loaned out the stake in the barges that it owned off the Nigerian coast to Merill Lynch, risk-free and with a guaranteed return, but made it seem like a sale so that it could book a pretend profit. Defendant, a managing director at Merrill Lynch and the head of its Strategic Asset and Lease Finance group at the time of the transaction, challenged his convictions related to the sale on the grounds that the government violated his right to due process by withholding materially favorable evidence that it possessed pre-trial. The court affirmed and held that the district court did not clearly err in holding that the evidence at issue was not material. View "United States v. Brown" on Justia Law

This case arose when debtor, a former firefighter, and his wife, filed a Chapter 7 bankruptcy petition, but failed to disclose on their bankruptcy schedules either his judgment against the City of Arlington (an asset of the estate) or his associated legal fees (a liability of the estate). At issue was whether judicial estoppel barred a blameless bankruptcy trustee from pursuing a judgment that the debtor, having concealed the judgment during bankruptcy, was himself estopped from pursuing. The court held that it did not. The court concluded that this result upheld the purpose of judicial estoppel, which in this context was to protect the integrity of the bankruptcy process, by adhering to basic tenets of bankruptcy law and by preserving the assets of the bankruptcy estate for equitable distribution to the estate's innocent creditors. View "Reed v. City of Arlington" on Justia Law

The Mississippi Commission on Judicial Performance (Commission) filed two formal complaints against Alcorn County Justice Judge Jimmy McGee alleging willful misconduct and conduct prejudicial to the administration of justice which brought the office into disrepute. The Commission and Judge submitted a joint motion for approval of a 120-day suspension, a public reprimand, costs and fees to the Supreme Court. After its independent review, the Supreme Court agreed that Judge McGee's conduct violated several canons of the Code of Judicial Conduct. The Court disagreed with the Commission's recommendation. The Court found the Judge's actions warranted a public reprimand, suspension from office for 270 days, and costs and fees. View "Mississippi Comm'n on Judicial Performance v. McGee" on Justia Law

Appellant appealed the denial of her application for Social Security Administration (SSA) disability benefits where the ALJ concluded that she retained the ability to perform her past relevant work and was therefore not disabled. The court held that the ALJ was not required to give controlling weight to the opinions of appellant's treating physician. The court also held that because there was substantial evidence in the record to support the ALJ's findings, the court declined to disturb the ALJ's decision on the ground that the ALJ failed to comply with the SSA Commissioner's policies in evaluating the severity of appellant's fibromyalgia and that the ALJ failed to give adequate weight to appellant's statements and the statements of her family and friends. The court further held that the ALJ's hypothetical to the vocational expert was proper and there was no evidence in this case to support a finding that bias impacted the ALJ's decision. Accordingly, the Commissioner's final decision to deny appellant's application for benefits was affirmed. View "Perkins v. Astrue" on Justia Law

Respondent Municipal Court Judge Sheryl Polk McKinney's sister, who was the Clerk of the Town of Varnville, was arrested and charged with embezzlement of public funds, forgery, and misconduct in office.  Respondent's sister was accused of issuing checks in Respondent's name, forging respondent's name to the checks and converting the money for her personal use over an eight year period. Upon review, the Supreme Court found that by her misconduct, Respondent violated multiple Canons of the Code of Judicial Conduct (Rule 501, SCACR). The Court found Respondent’s misconduct warranted a suspension from judicial duties.  Respondent was suspended for thirty days.  View "In the Matter of Municipal Court Judge Sheryl Polk McKinney" on Justia Law

This case arose when appellant alleged claims of tortuous interference with contract or business expectancy and violation of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. 4-88-101, et seq. Appellant subsequently sought a temporary retraining order and preliminary injunction after appellee terminated appellant's patient privileges at a residential nursing home. The court held that appellant did not meet the factors in the Dataphase Syst. Inc. v. C.L. Syst., which evaluated whether to issue an injunction. Consequently, the court held that the district court did not abuse its discretion in denying the motion for a preliminary injunction and the judgment was affirmed. View "Roudachevski v. All-American Care Centers, Inc" on Justia Law