David D. Black

I played a lead role in successfully assisted our clients, two private equity funds and their investment advisors, in resisting a $62 million claim made against them. The case centered around the sale of the stock of Precision Industrial Corporation, a company which manufactured and serviced steel coil processing machinery. After the sale, and amid an industry downturn, the buyer defaulted on its loans and filed for bankruptcy. The buyer then claimed that it had substantially overpaid for the stock of Precision and that our clients had unfairly benefited as part of an alleged leveraged buyout. Filing an adversary proceeding in Bankruptcy Court, the Plaintiffs sought to recover most or all of the original sale price. They blamed the selling stockholders and their advisors for subsequent industry problems and technical issues which surfaced after the stock purchase. When settlement negotiations proved unsuccessful, I argued and prevailed in discovery motions in Court. I then lead the effort to obtain detailed accounting, engineering, and business data which ultimately vindicated our clients in demonstrating that the deal had been fair and reasonable. I worked with expert witnesses, including forensic accountants and business valuation experts, to gather and analyze the pertinent data. I personally took numerous key depositions of the critical fact and expert witnesses. When we presented our case in Court on summary judgment, we convinced Plaintiffs to dismiss their fraud claim, and admit that as to remaining claims, it was "impossible to say Plaintiffs were likely to succeed at trial." The Bankruptcy Court then approved a nuisance value settlement in an amount less than the remaining cost of defense, less than one-half of one percent of the amount claimed in the Complaint.

We were counsel for Procter & Gamble in litigation in 1994-96 against Bankers Trust arising out of two substantial derivatives contracts entered into by P&G. The litigation raised numerous issues of first impression involving the application of contract, fraud, negligence and fiduciary duty, federal and state securities and commodities and RICO law to derivatives contracts, and led to Sixth Circuit and Supreme Court decisions on issues including the discoverability of materials relating to Federal Reserve Board examination of regulated banks and the power of District Courts to enjoin publication of materials filed under seal under protective orders. The case involved massive discovery of hundreds of thousands of pages of documents and thousands of audiotapes and computer files, and required extensive computerization for discovery management. The matter settled shortly before trial, resulting in a $165 million recovery by P&G, the largest (in absolute or percentage terms) of any such publicly reported derivatives recovery.

After trial, obtained dismissal of claim brought by former salesman who alleged that he was entitled to certain protections under Wisconsin Statutes and Kentucky law. The salesman argued that his termination was improper and that he was entitled to substantial damages.