In a dramatic turnaround, White & Case has lost its case against Hong Kong firm Deacons over a team of star insolvency partners the US firm recruited in summer 2002.
When White & Case poached rated Deacons partners Mark Fairbairn and Edward Cairns, Deacons hit back with a Hong Kong lawsuit claiming the two were in breach of their partnership covenants and that White & Case had encouraged the pair to break them.
The judge said White & Case’s conduct, “amounts to a cynical disregard for the rights of Deacons, putting profit before honour, it is below the belt.”
Last Febrary an arbitrator ruled that Deacons could not hold the two partners to a five year restrictive covenant that prevented them from moving to White & Case. Fairburn and Cairns then started work at the US firm.
However, Deacons appealed the arbitrator’s ruling and pressed ahead with parallel High Court litigation against both White & Case and the two partners.
The Hong Kong court today released its judgement upholding several of Deacons’ key claims. According to a statement – issued by the Hong Kong firm, the judge found that:
– Fairbairn and Cairns failed to comply with their obligations and duties as partners of Deacons.
– While still partners of Deacons, Fairbairn and Cairns passed confidential information to the White & Case management.
– Fairbairn and Cairns attempted to persuade clients of Deacons to transfer their work to White & Case.
– White & Case encouraged Fairbairn & Cairns to breach their contractual obligations.
– White & Case further encouraged Fairbairn and Cairns to attempt to persuade clients to transfer their work to White & Case.
The judgment is a major blow for White & Case which has been attempting to build up its restructuring practice in Asia. A later hearing will be held to assess Deacons’ damages.