Steel Hector & Davis has defended its conduct after being slammed by US District Judge Alan Gold in relation to perceived conflicts arising out of its involvement in a controversial $92.3m (£48.8m) payment to top executives of utility company FPL Group.
The Miami giant was appointed by a committee created by FPL’s board in the spring of 2001 to investigate the payments after shareholders filed lawsuits. In a 50-page order denying FPL’s motion to dismiss the consolidated shareholder action against the company, Judge Gold highlighted a number of significant Steel Hector conflicts.
“I think, respectfully, the judge came to the wrong conclusion,” said Alvin Davis, who led the Steel Hector team.
Davis told The Lawyer the firm had been heavily involved in developing the ‘change of control’ language in the FPL compensation policy at issue before the committee.
He dismissed this claim and said the clause was drafted by another law firm during the 1980s.
Also, the firm was appointed following a recommendation by FPL’s general counsel Dennis Coyle (a former Steel Hector partner), who pocketed over $6m (£3.2m) in payments.
Davis denied that Coyle had received any payments and argued that he recommended Steel Hector because the firm had a longstanding relationship with FPL. He then added: “There was no apparent conflict at the outset, but once we discovered the conflict we insisted that another firm be instructed.”