By Peter Rudegeair
Oct 17 (Reuters) - Greenberg Traurig has won the dismissal
of a $10 million malpractice suit brought by a former employee
of a Greenberg client who faulted the firm for failing to remove
restrictions on his company stock.
Thomas Cusack, a former executive at the military armor
manufacturer American Defense Systems, Inc, last year sued
Greenberg Traurig for malpractice, negligence and breach of
fiduciary duty following the company's initial public offering.
By not taking the necessary steps to have restrictions removed
from 900,000 shares of American Defense stock held by Cusack in
2008, Greenberg prevented Cusack from selling the shares on the
public market, Cusack said.
But Justice Eileen Bransten of the New York County Supreme
Court dismissed the claims on the grounds that Greenberg
Trauring only had an attorney-client relationship with American
Defense, and not with Cusack. Furthermore, the justice on
October 8 said that the three-year statue of limitations for
negligence, which by law begins when an injury first occurred,
had expired by the time Cusack brought his suit in July 2011.
The suit dates to May 2008, when American Defense begain
preparations for its IPO. At the time, the company notified all
of its shareholders, including Cusack, who had since left the
company, that they could have restrictive covenants removed from
shares they held so that the stock could be traded publicly.
To have the covenants lifted, American Defense told
shareholders to contact the company's securities counsel,
Greenberg Traurig, and request that the firm submit an opinion
letter to the armor-maker's transfer agent, Bank of New York
Greenberg Traurig issued an opinion letter for Cusack to BNY
Mellon in June 2008, but Cusack said the bank told him that the
letter was not in an acceptable form. Greenberg Traurig refused
to issue another opinion letter, claiming that American Defense
directed it not to do so, according to Cusack's complaint. That
prompted Cusack's lawsuit.
Cusack said in an interview that he was considering his
options and an appeal but that has not made a final decision. A
Greenberg Traurig spokesperson said that the firm was pleased
that the court dismissed the case and that it and its attorneys
The case is Thomas F. Cusack v. Greenberg Traurig LLP, New
York County Supreme Court, 651952/2011.
For Cusack: Pro se.
For Greenberg Traurig: Justin Chu of Steptoe & Johnson.
(A previous version of this story misstated counsel for
Greenberg Traurig. He is Justin Chu of Steptoe & Johnson.)
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