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Geoffrey W. Heineman - Representative Experience

  • Issues
  • Venue
  • Client Type
  • Practice Areas
  • Full Description
  • Result
  • Fraud; Breach of Contract
  • Supreme Court of New York, County of New York
  • Defendant Directors of a Privately Held Company
  • Business and Commercial LitigationDirector/Officer Liability (including Non-Profits)Professional Liability
  • In 1996, Samer and Hussam Hamadeh founded Vault.com, Inc., an internet based company that provides career planning and information about companies and industry developments. In 2006, representatives of a private equity firm ("VSS") approached the Hamadehs and indicated that it was interested in acquiring Vault. After months of negotiations, the parties entered into a Merger Agreement. As part of the Merger Agreement, $6.899 million in cash of the $65 million purchase price, as well as $1.630 million worth of “rollover” Vault stock, were placed into escrow to be used once accounts receivable and other financial figures were finalized. Shortly thereafter, the VSS contacted the Hamadehs and claimed that the accounts receivable figures were false and misleading by almost $1 million. As a result, VSS asserted several claims against Samer and Hussam, including fraud and breach of contract, and sought to rescind the Merger Agreement (and the return of the $65 million purchase amount).

  • After more than a year of protracted and contentious litigation, the parties were able to reach a negotiated settlement that allowed the Hamadehs to keep the purchase proceeds.

  • Coverage; Mediation; Initial Public Offering; Class Action
  • USDC: Southern District of New York
  • Defendant Insurance Provider
  • Insurance Services
  • In a series of class actions consolidated under the caption, In re: Initial Public Offering Securities Litigation, the plaintiff shareholders alleged that three hundred and ninety technology companies and their underwriters fraudulently inflated share prices during and after the companies' initial public offerings.  The companies conducting the offerings and their directors and officers were alleged to have profited from the scheme by taking advantage of the artificially inflated stock to raise capital, enter into stock-based transactions and sell their individual holdings at high prices.
     

     

  • The second mediation resulted in a global settlement of all claims with terms that our client found to be favorable. Court approval of the settlement was subsequently granted.

  • Insurance Coverage; Interpretation of Director and Officer Policy
  • USDC: District of Connecticut
  • Defendant Insurance Provider
  • Business and Commercial LitigationInsurance Services
  • Analyzed insurance coverage on two primary issues: 1) whether the value of a subsidiary was substantially inflated; and 2) whether the insured's financial statements and level of operating profitability were materially misrepresented by the failure to properly record the costs associated with warrants to third parties as a cost of sales and the failure to fully reveal the contingent nature of such agreements (including the risks of significant re-pricing of warrants and the tracking of the warrants against such sales). The damages estimates far exceeded the insurance coverage available among the entire "tower" of insurance.   Through multiple rounds of mediation at which the insurers challenged whether the entity was a "subsidiary" or mere "affiliate", in which case there was no coverage, we mediated and struck a deal allowing our client to pay only a portion of its policy limits even though it appeared that this was a "policy limits" case. We achieved this result by urging various individual defendants to contribute personally towards the settlement, and demonstrating significant coverage defenses which resulted in the insured agreeing to pay amounts within the insurance tower. 
     

     

  • Negotiated various insurance coverage issues arising out of the securities class action, including whether a certain entity was insured, whether the individual defendants needed to contribute personally towards the settlement and whether the insured entity had non-insured exposure, and helped our client reduce the amount of exposure that it was responsible for during settlement. What originally was an excess of "policy limits" case turned into a case where the insurer saved a portion of its limits.

  • Professional Liability; Legal Malpractice; RESPA; Fraud; TILA; GBL Sec. 349 Claims
  • Saratoga County, New York Supreme Court
  • Defendant Law Firm
  • Business and Commercial Litigation
  • Represented a law firm that was sued as a result of a successful foreclosure prosecution. The plaintiffs sought leave to vacate the underlying foreclosure judgment.  The plaintiffs argued that they had discovered “new” evidence that warranted a vacatur, including “concealed mailings” and the purposeful sending of documents to an "improper mailing addresses."  The implication was that the law firm obtained a default summary judgment on the basis of wrongful conduct.  We argued that the plaintiffs failed to establish why this allegedly new evidence could not have been reasonably discovered three years ago.  We also argued principles of equity did not warrant vacating the judgment of foreclosure because the plaintiffs could not demonstrate any meritorious defense to the foreclosure proceeding, nor could they state a viable claim against the law firm.
     

     

  • The judge granted the motion to dismiss filed on behalf of our clients following briefing and oral argument. No appeal was taken.

  • Insurance Services; Coverage and Monitoring Counsel to Facultative Reinsurer
  • Reinsurer
  • Insurance ServicesProfessional Liability
  • Under the terms of regulatory settlements made with the SEC and a Canadian regulatory agency, the target company insured by our client's reinsured agreed to pay certain penalties and additional monies.  Specifically, a Canadian subsidiary of the target agreed to pay the agreed-upon amounts in Canada. The regulatory settlement contained no express prohibition against the target company seeking to recoup the settlement payment from insurance. 

     

  • Successfully undertook the necessary legal analysis under Canadian law which demonstrated to our client's reinsured and the target why the payments were outside the scope of our re-insured's policy to the target.

  • Defense of Insurance Agents Malpractice
  • Quenes County, New York Supreme Court
  • Defendant Insurance Provider
  • Business and Commercial LitigationInsurance Services
  • On May 22, 2009, Queens Supreme Court Justice Satterfield granted the motion to dismiss filed on behalf of our client, an insurance agent for an insurer.  The plaintiff sued our client for failing to procure adequate umbrella coverage.  We moved to dismiss based on statute of limitations grounds.  The Court found that the time to have sued our client had lapsed before the action was first filed and therefore the plaintiff's claim was barred by the statute of limitations (three years) under New York’s CPLR.   Specifically, the Court found that under the controlling law in the Second Department, the negligence claims asserted accrued when the allegedly inadequate umbrella policy was procured and issued.  The Court went on to observe that, even if the date of the accident for which coverage was sought was deemed to be the date of the injury, the result would be the same because the action was not commenced within three years.
     

  • The trial court granted our client's motion to dismiss, and opposing counsel has filed a notice of appeal.

  • Coverage
  • New Castle County, Deleware Superior Court
  • Defendant Insurance Company
  • Business and Commercial LitigationClass Action/Complex LitigationCoverageInsurance Services
  • Represented an insurance carrier in a $600 million lawsuit  involving a complex coverage action involving the plaintiff, a telecommunication provider, and eight insurance carrier defendants. The plaintiff had sought insurance coverage from the insurers on five different insurance towers for multiple shareholder lawsuits. The multiple lawsuits could be divided into three categories. The first category of lawsuits arose out of the plaintiff's efforts to transform the company from a low growth long distance carrier into a rapidly growing telecommunications giant capable of delivering “bundled services.” The allegations were based on assertions that the plaintiff and its individual officers and directors artificially inflated stock price by painting an unrealistically positive portrait of the company’s financial condition in an effort to ensure the success of the spin-off of its wireless operation. The second category of lawsuits arose out of the IPO of the telecommunication  providers tracking stock. These lawsuits alleged that the plaintiff and certain of its directors and officer misrepresented and/or omitted material facts in connection with the IPO in violation of the federal securities acts. The third category of lawsuits concerned allegations that the plaintiff and certain directors and officers improperly acquired majority ownership control over a now defunct internet service provider and thereafter, misappropriated the provider's technology to the benefit of the plaintiff and to the detriment of the provider, eventually driving the provider into bankruptcy.
     

  • Approximately a month before jury selection was to begin, our client and the one other remaining insurer entered into extensive settlement negotiations which resulted in a resolution our client viewed as a very favorable result.

  • Defense of Director and Officer of Private Corporation
  • USDC: Southern District of New York
  • Defendant Private Company
  • Business and Commercial Litigation
  • The plaintiff was a supplier of fabric based in South Korea and sued our client, a company and its CEO, alleging that our client purposely defaulted on its secured loans and “devised a scheme” to sell its assets and avoid liabilities owed to the plaintiff.  The plaintiff alleged that the client's sale of its assets to co-defendants was the result of a scheme made with actual intent to hinder, delay and/or defraud creditors.  The complaint alleged breach of contract, UCC violations under §2-709 (Action for Price), common law unjust enrichment, account stated, conversion, successor liability and fraudulent conveyance.  The plaintiff asked the court to pierce the corporate veil with respect to the individual defendants including the CEO.

     

  • The court granted the motion to dismiss filed on behalf of our clients, and opposing counsel did not re-file an amended complaint even after the court allowed such an amendment following our demonstration to the plaintiff's counsel of the futility of the plaintiff's arguments as to the corporate and individual defendants.

  • Breach of Fiduciary Duty
  • Kings County, New York Supreme Court
  • Defendant Property Management Company
  • Business and Commercial LitigationDirectors & OfficersInsurance Services
  • In April 2007, a shareholder and tenant of a residential cooperative apartment in Brooklyn, New York, filed suit against the Board of Directors (the “Board”) of the cooperative management association. The plaintiff alleged that the defendants breached their fiduciary duties to her and to the cooperative by engaging in self-dealing and failing to treat all shareholders in a uniform manner. Specifically, the plaintiff alleged that the defendants’ breaches of fiduciary duty occurred in the following ways: (i) the president of the management association receives compensation for his services as a board member; (ii) the garage spaces in the building are not assigned pursuant to proper “rules”; and (iii) the defendants engaged in “improper” billing practices. The plaintiff sought monetary damages and injunctive relief.
     

     

  • After more than two years of protracted and contentious litigation, Justice David Schmidt granted the defendants’ motion for summary judgment finding that the plaintiff was unable to support her allegations with any evidence. In fact, during oral argument on the motion for summary judgment, Justice Schmidt allowed the plaintiff's counsel to supplement its written filings by presenting evidence to support each instance of an alleged breach of fiduciary duty. Counsel, however, was unable to convince the court that any breach had occurred. Accordingly, Justice Schmidt found that the plaintiff was unable to prove her allegations as a matter of law and granted judgment for our clients.

  • insurance; excess; trigger; exhaustion; gap
  • US Court of Appeals for the Fifth Circuit
  • Bad FaithInsurance Services
  • An oil and gas company sought coverage under its directors and officers liability policies for the defense costs and settlement of an underlying shareholder action brought by a former minority shareholder against the company and its directors and officers.  The D&O insurers denied coverage on numerous grounds, and the company filed suit in United States District Court for the Eastern District of Texas.  After the company settled with its primary insurer for less than the full $10 million limits of liability of the primary policy, the first excess insurer, AXIS Insurance Company, moved for summary judgment on the grounds that as a result of the below-limits settlement, the primary policy was not fully exhausted and the AXIS Policy could never be triggered.  In May 2014, the District Court granted summary judgment in favor of AXIS, and the Insureds appealed to the United States Court of Appeals for the Fifth Circuit.  

  • The Fifth Circuit affirmed the District Court’s decision and order granting summary judgment to AXIS.  Applying Texas law, the Fifth Circuit held that the AXIS Policy unambiguously precludes below-limits settlements by detailing precisely what must be paid and by whom before the AXIS Policy can be triggered.  Specifically, the Fifth Circuit held that the phrase “actual payment of all applicable Underlying Insurance” requires that only the primary insurer can make payment and that the insurer must pay “all” of its limits in order to exhaust the primary policy.   Because the primary insurer only paid a portion of its full underlying limits, the Fifth Circuit held that the AXIS Policy has not and can never be triggered.  

  • Bankruptcy; Asbestos; Contract Obligation; Defense; Indemnity
  • US Bankruptcy Court Southern District of New York
  • Plaintiff Auto Parts Manufacturer
  • AsbestosBusiness and Commercial LitigationClass Action/Complex LitigationToxic Tort
  • Retained to represent Remy International, Inc. ("Remy") in the bankruptcy proceeding commenced by General Motors Corporation ("GM"). Remy purchased the assets of the former Delco Remy Division of GM pursuant to an Asset Purchase Agreement ("APA"). The APA, executed by and between Remy and GM, placed certain ongoing indemnity obligations on GM in connection with various litigation and potential claims relating to GM products manufactured and premises occupied during the time period prior to the APA.

  • Assisted Remy in securing testimony and documents needed to defend itself in a number of active cases, and subsequently obtained dismissals in all of those actions. We also assisted Remy in successfully pursuing a claim of bankruptcy for its costs of defense regarding those actions. More importantly we obtained for Remy, as part of GM’s confirmed bankruptcy plan, protection from liability for asbestos claims relating to GM products manufactured and premises occupied during the time period prior to the APA. This is a relatively unprecedented achievement in a bankruptcy action that does not involve a Section 524(g) trust.