A HUGE legal battle is unfolding in New York where the Maxwell pensions trustees, represented by the five-partner firm Orans Elsen & Lupert, are taking on investment bank Morgan Stanley and the 106-partner Lexington Avenue firm, Davis Polk & Wardwell in their $100 million claim.
The lawsuit launched by the Mirror Group Newspapers Pension Trustees (MGNPT) is the latest and one of the largest actions yet taken to recover Maxwell pension fund assets.
MGNPT is pursuing assets allegedly held by Morgan Stanley Trust Co at the time of Robert Maxwell's death in 1991. An MGNPT source said it “regretted that Morgan Stanley had not participated in the global settlement last March”.
This was headed by Sir John Cuckney and raked in £276 million, avoiding litigation. “As a result we have issued proceedings to recover losses while in the custody of Morgan Stanley.”
Morgan Stanley refuted the claim: “We strongly believe this suit is without foundation and will seek to ensure that it will be seen as such if it comes to court.”
Morgan Stanley's defence team is led by Munroe Sonnenborn, its legal managing director, with London office senior legal counsel, Graham Russell.
Davis Polks' team is led by senior litigation partner James Benkard.
Orans Elsen & Lupert may be small, but its leading partners Sheldon Elsen and Leslie Lupert, which is handling the claim, has acted successfully for MGNPT in a number of other cases, said trustee chair Philip Sheriden.
He said the trustees were using a long-standing legal team of solicitors and counsel, and its success in chasing assets meant that the funds were now in relatively good health.
Top litigators at Travers Smith Braithwaite, partners Jonathan Leslie and John Kingston, are advising in London. Heavyweight counsel is from Michael Crystal QC of 3-4 South Square and Geoffrey Vos QC of 3 Stone Buildings, chair of the Chancery Bar Association.
Leslie said: “We are liaising with our legal team in America. It will be a leading case on the obligations of bankers acting as custodians of pension fund assets.”
The same team has worked on all MGNPT's actions. A recent claim against Credit Suisse settled out of court for an undisclosed sum.