Refco Owner Sues Mayer Brown
Posted Jul 27, 2007 3:11 PM CST
By Debra Cassens Weiss
A suit filed yesterday by a private equity firm contends Chicago-based Mayer Brown Rowe & Maw helped commodities broker Refco cover up sham loan transactions.
The suit seeks $245 million in damages, Crain’s Chicago Business reports.
The plaintiff, Thomas H. Lee Partners LP, was the largest shareholder in Refco before its collapse in October 2005. The suit says Mayer Brown should have informed Lee about the transactions before it bought a stake in Refco in 2004.
The U.S. Supreme Supreme Court has restricted third-party liability for corporate wrongdoing. But that shouldn’t pose a problem in Lee’s case against Refco, because it is claiming the Mayer Brown made fraudulent statements directly to Lee about Refco’s financial condition, the Wall Street Journal (sub. req.) reports.
Mayer Brown promises to defend the suit vigorously.