The firm's prosecution of the WorldCom Securities Litigation, which received extensive media coverage across the globe, has become arguably the most significant deterrent to corrupt Wall Street practices in a generation. On behalf of defrauded investors in the now infamous and bankrupt telecom concern, BLB&G and Lead Plaintiff the New York State Common Retirement Fund (NYSCRF) obtained over $6 billion from the investment banks who underwrote WorldCom bonds and nearly $25 million directly from the pockets of former WorldCom director defendants - more than 20% of the aggregate net worth of these individuals. WorldCom has had a profound impact on how Wall Street investment banks perform due diligence and how corporate directors perform their duties. The events and the case law arising from this litigation have "shaken Wall Street, the audit profession and corporate boardrooms." (The Wall Street Journal)
BLB&G has long been at the forefront of the corporate governance reform movement. The settlement terms of the Cendant Litigation (2000) included some of the most significant corporate governance changes ever agreed to by a public company. Later that year, we prosecuted a shareholder rights class action alleging that the Board of Directors of Warner-Lambert ("Warner") had breached its fiduciary duty to the public shareholders of the Company by agreeing to a merger with American Home Products ("AHP") without giving due consideration to a competing, substantially higher offer for the Company by Pfizer, Inc. Our efforts on behalf of Warner and its shareholders resulted in the overturning of the AHP deal. Pfizer subsequently acquired Warner for $10 billion more than the original merger proposed with AHP.
BLB&G also obtained an unprecedented corporate governance plan as part of the settlement of Columbia/HCA Derivative Litigation (McCall V. Scott), a lawsuit filed against the directors and officers of Columbia/HCA Healthcare Corporation. The case alleged extensive Medicare and Medicaid fraud by management making the company the subject of the largest health care fraud investigation in history. On behalf of 12 public pension funds, including the New York State Common Retirement Fund, CalPERS, LACERA and other institutional investors, BLB&G obtained corporate governance changes which go beyond the requirements both of the Sarbanes-Oxley Act and of the rules that the New York Stock Exchange has proposed to the SEC. Under the sweeping governance plan, the HCA Board of Directors will be substantially independent, and will have increased power and responsibility to oversee fair and accurate financial reporting. A summary of the corporate governance plan and its significance was detailed in our October 2003 Advocate for Institutional Investors. Corporate governance expert Professor Melvin A. Eisenberg called it an "excellent, state-of-the-art corporate governance plan."
In July 2004, BLB&G prosecuted the FirstEnergy Derivative Litigation on behalf of the Teachers' Retirement System of Louisiana and obtained a settlement of the action which provides for the adoption by FirstEnergy's Board of Directors of an extensive corporate governance plan that will result in widespread reforms to FirstEnergy's corporate governance practices.
We prosecute derivative actions against the directors, officers and management of numerous companies on behalf of shareholders. Seeking to reform faulty management structures and reverse illegal self-dealing and breaches of fiduciary duties, we have and continue to represent shareholders against the current and former management of a variety of public companies.
