Why McDermott Settlement in $200M Malpractice Case Is Secret

A bankruptcy trustee is citing competitive disadvantage in a motion to seal a malpractice settlement in a $200 million suit filed against McDermott, Will & Emery.

A Daily Journal reporter unearthed a docket entry reporting the settlement while researching a story last month about bankruptcy trustees who see law firms as potential cash cows. Now the Am Law Litigation Daily is reporting on the trustee’s motion to keep the settlement under seal, in part because of the need to protect McDermott from competitors.

"MWE has a strong interest in maintaining the confidentiality of the proposed settlement agreement because it contains confidential information about MWE, disclosure of which could adversely affect its commercial activities," it says. "Specifically, disclosure of the terms of the proposed settlement agreement could provide a road map for any disgruntled current or former client of MWE for the pursuit of litigation against the firm, giving an unfair advantage to MWE's competitors in the marketplace."

The trustee’s suit against the law firm had alleged McDermott improperly delayed a bankruptcy filing for Saint Vincent's Catholic Medical Centers and failed to disclose a possible conflict between two financial advisers to the hospital, one of which offered to buy out the other.