Judge requires resubmission of RICO suit on Puerto Rico bankruptcy

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The federal judge in a suit against more than 160 parties, many connected to the Puerto Rico bankruptcy, put the complaint under seal and called for it to be resubmitted without certain confidential information.

Virginia Phillips, chief U.S. District Judge of the California Central District U.S. District Court, made the order Friday.

Statue of scales of justice

On Feb. 18 former Puerto Rico Paul Hastings bankruptcy attorney Andrew Hennigan filed the suit against McKinsey & Co., Paul Hastings, and more than 160 other parties. The suit was filed following the federal Racketeer Influenced and Corrupt Organizations Act.

On March 25 Paul Hastings and its client the Official Committee of Unsecured Creditors of All Title III Debtors filed an ex-parte application to seeking an order for Hennigan to seal his complaint and to file an amended complaint. Paul Hastings filed it “on the ground that the complaint contains certain information that is protected by the attorney-client privilege, the attorney work-product doctrine, and/or the mediation privilege.”

According to Paul Hastings, its attorneys had contacted Hennigan by letter and email earlier in the month to try to address the confidential information in his motion. On March 25 they stated, Hennigan didn’t cooperate with the attorneys’ requests.

Hennigan didn’t immediately respond to an inquiry by The Bond Buyer.

In her Friday order, Phillips told Hennigan that he should “file an amended complaint that omits privileged and attorney-work product information if he wishes to pursue his claims, no later than March 17, 2020.”

After an inquiry, Courtroom Deputy Clerk Christine Chung told The Bond Buyer that the March 17 date was a clerical error and that a new version of the Phillips order would soon be submitted in the case.

While Hennigan filed the case on Feb. 18, by Monday evening none of the defendants except Paul Hastings had responded or told the court who their legal representative would be.

In his suit, Hennigan sued a large number of the most prominent Puerto Rico bankruptcy law firms for allegedly engaging in illegal activities, advancing their own financial interests over those of their clients.

Hennigan sued over 160 parties including consultant to the Puerto Rico Oversight Board, McKinsey & Co.; board law firm Proskauer Rose; Puerto Rico Fiscal Agency and Financial Advisory Authority law firm O’Melveny & Myers; Unsecured Creditors Committee law firm Paul Hastings; law firm to the Ad Hoc Group of COFINA Seniors Quinn Emanuel; and law firm to OppenheimerFunds and Franklin Mutual Kramer Levin. He also sued Greenberg Traurig, Jones Day, Norton Rose Fulbright, Rothschild & Co., Ernst & Young, KPMG, Citigroup, Bank of America Merrill Lynch, Deutsche Bank, Barclays, Goldman Sachs, BlackRock, and board attorney Martin Bienenstock.

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Puerto Rico Commonwealth of Puerto Rico Puerto Rico Sales Tax Financing Corp (COFINA) Puerto Rico Electric Power Authority Puerto Rico Highway & Transportation Authority Puerto Rico Public Buildings Authority McKinsey & Company Paul Hastings