06/03/2009
Cooley Wins $18M Plus Attorneys' Fees for E*TRADE in Four-Year Battle
RESTON, VA -- June 2, 2009 -- Cooley Godward Kronish announced that it prevailed for client E*TRADE Financial Corporation in a four-year-old breach of contract and accounting fraud case against Deutsche Bank AG. After a three-week bench trial in October, 2008, Judge Robert Sweet of the U.S. District Court in the Southern District of New York awarded E*TRADE over $11.5 million in actual damages plus over $6.5 million in statutory prejudgment interest under New York law. The Court also ordered Deutsche Bank to pay E*TRADE's attorneys fees in an amount to be determined in a later proceeding.
The case arose from E*TRADE's 2003 purchase of a Deutsche Bank specialty finance company that originated consumer loans, packaged and securitized the loans and then sold them to the public. The lawsuit alleged that Deutsche Bank knowingly overstated the value of a "Deferred Tax Asset" on the balance sheet of the acquired company that arose from the unique accounting treatment of the securitizations. The case involved a battle of tax experts, as well as fact witnesses from three major accounting firms.
In its 217-page Opinion the Court ruled for E*TRADE on all major breach of contract claims and also found that Deutsche Bank "knowingly" misled E*TRADE about the appropriate tax rate, resulting in a $2 million overstatement.
The Cooley team was led by Partner
Douglas P. Lobel and included Partner
Bob Cahill, Special Counsel
David Vogel and associates
Hans Chen,
Jared Rodrigues and
MaryBeth Wysocki in Cooley's
Reston, VA. office.
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