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Firm News
Eckert Seamans’ $45M Settlement in Jeopardy Following Supreme Court Ruling
In a stunning turn of events, the $45 million settlement negotiated by Eckert Seamans Cherin & Mellott to resolve litigation stemming from their former partner’s alleged malpractice involving a Ponzi scheme is now in doubt. The recent U.S. Supreme Court ruling in Harrington v. Purdue Pharmaceuticals has cast significant uncertainty on the proposed settlement, as argued by George Bochetto of Bochetto & Lentz, who represents former Eckert Seamans’ clients victimized by their alleged malpractice.
Background and the Supreme Court Ruling
The case centers around former Eckert Seamans partner John Pauciulo, who represented various investment fund managers that invested funds in the merchant cash advance company Par Funding. Par Funding was accused by the U.S. Securities and Exchange Commission (SEC) in 2020 of defrauding investors out of hundreds of millions of dollars. The firm has since been labeled a Ponzi scheme. The $45 million settlement, funded by Eckert Seamans’ insurer, was intended to resolve claims and prevent further litigation.
However, the Supreme Court’s decision in Harrington v. Purdue Pharmaceuticals, which rejected a bankruptcy deal that included legal protections for Purdue Pharma’s owners, has thrown a wrench into the settlement with Eckert Seamans. The ruling highlighted that federal courts cannot issue broad protections to mass tortfeasors who refuse to make significant financial contributions to settlements.
Impact on the Eckert Seamans Settlement
George Bochetto, representing former clients of Eckert Seamans in malpractice cases, stated, “The Supreme Court in Harrington made it clear that federal courts can no longer ‘look the other way’ and issue such free passes to mass tortfeasors such as Eckert who refuse to place their assets on the settlement negotiation table.” The objection filed on July 12 reflects growing opposition from those seeking justice and compensation from the malpractice and lack of oversight by Eckert Seamans.
At a status conference on July 12, U.S. District Judge Rodolfo Ruiz acknowledged the Supreme Court’s ruling as a factor in evaluating the settlement, indicating a more cautious approach towards barring further litigation without consent from all parties involved.
Legal Perspectives
The recent ruling has raised questions about the validity of third-party releases in settlements, especially in non-bankruptcy contexts such as receiverships. Stephen Sather, leader of the bankruptcy practice group at Barron & Newburger, noted that while the Purdue case specifically addresses bankruptcy law, its implications could influence receivership proceedings due to their intertwined nature. Columbia Law School professor Edward Morrison echoed this sentiment, highlighting the complexities and potential overlaps between bankruptcy and receivership laws.
Future Considerations
As it stands, the future of Eckert Seamans’ settlement remains uncertain. Judge Ruiz is awaiting further objections and the receiver’s assessment of the Supreme Court decision’s impact. An evidentiary hearing may be held before any final decision is made.
The fallout from the Harrington ruling extends beyond this case, potentially affecting numerous settlements involving similar legal protections. It underscores the necessity for robust financial contributions from parties seeking to avoid litigation through settlements, thereby ensuring fair compensation for affected investors.
Conclusion
The ongoing legal saga of Eckert Seamans and Par Funding highlights the evolving landscape of mass tort settlements and the increasing scrutiny they face in the wake of landmark judicial rulings. As the legal community grapples with these changes, one thing remains clear: accountability and equitable compensation for defrauded investors are paramount.
Bochetto & Lentz proudly supported the Justinian Society & Foundation’s Annual Meeting
Bochetto & Lentz proudly supported the Justinian Society & Foundation’s Annual Meeting, Election & Scholarship Reception and Luncheon as a Corporate Level Sponsor on June 13, 2024, where our associate Kiersty DeGroote was appointed to serve as Treasurer.
The Justinian Society is a legal organization comprised of attorneys, judges and law students of Italian ancestry. Founded in 1925, the Justinian Society promotes continuing education in law, supports the advancement of qualified and distinguished Justinians in public office, serves the Italian-American legal profession and the community, and strives to uphold a positive image and take action against negative stereotyping against Italian-Americans.
Bochetto & Lentz frequently represents members of the Italian-American community and is proud to support the mission of the Justinian Society.
Membership in the Justinian Society is available to all members of the legal community who wish to support its efforts in advancing and celebrating the Italian-American community. More details here.
Bochetto & Lentz is pleased to announce the firm’s attorneys who have been selected to the 2024 Pennsylvania Super Lawyers® and Rising Stars® lists.
Attorneys Gavin Lentz and David Heim were named to the 2024 Super Lawyers List. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.
Attorneys Kiersty DeGroote and Kean Maynard were named to the 2024 Rising Stars list. The list recognizes the best up-and-coming attorneys who are 40 years of age or younger or who have been practicing law for 10 years or less.
Each year, no more than 5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor, and no more than 2.5 percent of the lawyers in the state receive the Rising Stars designation.
Bochectto & Lentz Helps Ex-CEO of Medical Group Who Alleges He Was Fired for Whistleblowing
A former executive of rehabilitation institute Rothman Orthopaedics sued the company in Pennsylvania state court, claiming he was fired and “perp-walked” out of the building in retaliation for raising the alarm about financial mismanagement practices.
In a recent feature by “We the Italians” magazine, George Bochetto is spotlighted for his pivotal role in defending the legacy of Christopher Columbus in American courts.
George’s legal battles against the removal of Columbus statues and the cancellation of Columbus Day highlight a deep commitment to correcting historical inaccuracies and safeguarding Italian American heritage.
His efforts underscore the firm’s dedication to justice, showcasing how procedural and judicial standards must be upheld. Through George’s work, Bochetto & Lentz demonstrates its commitment to preserving the cultural and historical contributions of Italian Americans to the fabric of American society.
Read the full article here
Bochetto attorney featured in Pennsylvania Bar Association Young Lawyer Division’s newsletter
Bochetto & Lentz attorney Ryan Kirk is featured in the Pennsylvania Bar Association Young Lawyer Divisions Fall 2022 newsletter with his article titled “The Coming Tsunami of COVID-19 Whistleblower Suits.”
Visit Pennsylvania Bar Association Young Lawyer Division Site
Bochetto Attorneys win business dispute arbitration
Recently, founding B&L partner, George Bochetto, and senior B&L associate John O’Connell, conducted a trial before a three member panel arbitration involving a years long business dispute between owners of a large, regional vending business with annual revenues exceeding $18 million. The trial involved the parties’ dispute over a complicated options buy-out contract, where our client’s adversary was enforcing his option to buy our client’s shares based on an erroneous interpretation of the contractual buy-out formula, which, Bochetto successfully argued, was ambiguous and the parties had previously settled. The three member arbitration panel — including two former judges — accepted Bochetto’s arguments in full, resulting in a win for B&L’s client, who received a recovery in excess of $8 million.
Over the years, B&L has earned a reputation for taking on such complicated, commercial litigation cases involving partnership breakups and shareholder disputes in a wide-array of industries. If you think you have problems in the corporate litigation area, please contact us. We welcome the opportunity to assist you through it.
Bochetto Attorneys Score Win in Trademark Suit
When arts and crafts retailer Michaels used another company’s picture frame design, the company that made the original product decided to file a trademark infringement lawsuit and called the Bochetto team.
The plaintiff in this case, MCS Industries, alleged that the defendant, Michaels Stores Inc., copied their trademarked “Format” frames with Michaels’ Structure brand picture frames, even copying the instruction manual. MCS Industries claims that this infringement on their trademarked frames resulted in serious financial losses for the company, seeing sales reduced by 70 percent and losing over $1 million in revenue when Michaels, who originally bought the frames from MCS, introduced their own frames. MCS also says they lost their business with Michaels after that as well.
This case has not gone to discovery yet and the Michaels’ legal team was attempting to get the case thrown out before it went any further. However, the judge ruled that, given the allegations made, it was premature to throw away the case. All in all, the judge rejected Michael’s attempts to throw away the case and their argument that MCS didn’t show clear concrete losses resulting from the infringement.
If you have a Law360 account and would like to read the full article about this case, click here.
Attorney David P. Heim Recognized As One Of The Best Attorneys In Pennsylvania
Best of the Bar™ proudly congratulates Attorney David P. Heim and Bochetto & Lentz, P.C. in Philadelphia, Pennsylvania for achieving one of the Top 100 Verdicts in Pennsylvania in 2021.
Best of the Bar™ membership is limited annually to fewer than the Top 1% of all licensed attorneys, and is only bestowed after a rigorous investigation and verification process. The Best of the Bar™ Medal has been commissioned, designed and minted by the makers of the Pulitzer Prize Medal and the National Medal of Science and honors this accomplishment.
Please visit www.bestofthebar.com for additional details.
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