Judge Denies CA Primary Plaintiff Status

Newsday
Tribune Company

November 1, 2007

A federal judge this week denied a crucial request by a committee of CA Inc.'s board to make the company the primary plaintiff in a case that seeks to recover hundreds of millions in alleged ill-gotten gains.

The ruling severely limits, and could effectively end, the company's attempts to recover about $500 million from CA founder Charles Wang and others. A CA spokeswoman declined to comment. Wang, who was never criminally charged in the case, has denied wrongdoing.

In denying CA's motion to re-align the plaintiffs of a combined derivative lawsuit, U.S. District Judge Thomas Platt expressed frustration with the pace and level of revelations of alleged fraud in the civil case. Platt, who in the same ruling also denied plaintiff Sam Wyly's request for the appointment of a special master to pay legal costs he has incurred, said it would be "unproductive" to rule in the case until an appeal by Wyly was heard in a higher court.

William Brewer, an attorney for Wyly and partner at Bickel & Brewer, called the ruling a victory. "It leaves us in control of the only thing that's valuable in the case right now," he said, referring to Wyly's multi-year legal effort to void a clause in a CA shareholder settlement that prevented officials from being sued.

Wyly wants to pursue past and current CA officials and board members. If he is successful in reversing Platt's refusal to disturb the shareholder settlement, CA would then have to reargue in Platt's court that it should be in charge of the CA case rather than Wyly.

Brewer suggested that would be unlikely, saying Platt's decision leaves CA "completely out of the game" in pursuing so-called ill-gotten gains. "They're not even aligned for a spot at the table for the appellate side."