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N.Y. Court Dismisses Kaye Scholer Malpractice Suit

Posted Nov 13, 2007 7:28 AM CDT
By Debra Cassens Weiss

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A New York appellate court has ordered the dismissal of a malpractice suit filed against Kaye Scholer and one of its lawyers by former accounting employees of Computer Associates.

The three plaintiffs lost their jobs in an accounting scandal that resulted in the securities fraud conviction of company CEO Sanjay Kumar, the New York Law Journal reports. They claimed they were wrongfully terminated because they had relied on corporate promises of continued employment if they cooperated in an internal investigation. They also claimed they were defamed based on statements made in the company’s 2004 Annual Report.

CA had paid Kaye Scholer to represent one of the plaintiffs, Irene Salvatore, who contended she got bad legal advice from the law firm that resulted in the termination and defamation. The other two plaintiffs said the legal advice given to Salvatore resulted in their firing.

The court said in a Nov. 7 opinion that the plaintiffs’ contentions were without merit. The court noted that none of the plaintiffs were identified by name in the company report and the statements it made about accounting problems were true.

Since the plaintiffs’ claims against CA must be dismissed, the malpractice suit cannot stand, the court said. It also noted that the two defendants could not sue the law firm since it did not represent them.

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