Government Law

BigLaw Firm Hired to Vet Company Gave It Thumbs-Up--Without Noting Suits It Had Filed Against CEO

Hired in 2010 by a Florida city to check out a private company, in connection with a potential film school project in collaboration with Florida State University, a BigLaw firm gave West Palm Beach a glowing report about Digital Domain Media Group.

Later that year, the city deeded a parcel of land worth $10 million to the company, which filed for bankruptcy last month. Meanwhile, some are now wondering why the report, for which Greenberg Traurig was paid $15,000 by the city, didn’t mention several lawsuits the firm had filed on behalf of another client against Digital Domain’s then-chairman and CEO, John Textor, the Palm Beach Post reports. One of the suits was filed only days before the law firm accepted the West Palm Beach project.

Technically, there was no conflict of interest, since Textor wasn’t an opposing party in the potential land deal, attorneys apparently not involved in the matter tell the newspaper. But some wonder whether public information about the litigation should have been included in Greenberg Traurig’s report. The newspaper article notes that a private investigator hired by the city did provide a report listing litigation against Textor, but didn’t say who had filed the suits.

In a written statement, Greenberg Traurig told the Post that it utilizes a sophisticated conflict review system and there was no conflict for the firm in representing the city. “This was a very limited and brief engagement,” the statement continues, “to produce a report summarizing the perception of the company in the entertainment industry, not a legal analysis nor adverse to any firm client.”

Related coverage:

Palm Beach Post: “John Textor friend sues former Digital Domain chairman for defaulting on loan”

Palm Beach Post: “Digital Domain vetting ignored critical reports, dire finances”

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