Edited and corrected: 27 July 2008

Note: The original post–since corrected–mistakenly implied that the jury awarded $36 million against Mr. Berkman. That is incorrect. The award against Mr. Berkman and his companies was approximately $14 million, with the balance being awarded against Arthur Andersen. As well, there were references to “fraud” in the original post. While the jury found against Mr. Berkman on breach of fiduciary duty and negligent misrepresentation, it did not consider a fraud claim against him. I regret the inaccuracies and appreciate the information supplied by Mr. Berkman’s lawyers that provide a basis for clarification.

-DFS

The outcome of the Berkman investor trial–a $36 million verdict divided between Craig Berkman, his company, and Arthur Andersen–isn’t all that surprising to casual observers.

The article is interesting for more, as it gives a behind-the-scenes look at the costs and economics of litigation when well-heeled investors sue over deals gone bad. According to the news report–and I have to wonder whether this is accurate–the lawyers for the investors spent in excess of $1 million to put on the case. I assume that this million dollar figure is only in expenses (”costs”) spent out of pocket and does not include a dime for the thousands of hours that the investors’ lawyers, the Bullivant law firm, spent on the case.

The Bullivant firm had the luxury of representing wealthy investors and pension funds in chasing down the money, so I assume that the investors themselves footed the bill for the expenses. No word on whether the Bullivant firm received payment on an hourly pay-as-you-go fee arrangement or on a contingent fee, which is generally a percentage of the amount recovered by the attorneys.

Regardless, it sounds like my colleagues at the Bullivant firm did a hell of a job putting this thing together. Their success is well-deserved. To his credit, Mr. Berkman noted that the jury had made his judgment, and he would respect that. No doubt the jury worked hard, as this was a long trial with ample amounts of financial evidence.

David Sugerman

Tags: Add new tag, Berkman trial, investor fraud, Oregon consumer lawyer, sugerman