Lasko Legal Services is focused on resolving disputes for businesses and business professionals. Bennett Lasko has nearly thirty years of experience resolving complex business litigation, including some of the largest and most complex cases in the country. As a small law office, Lasko Legal Services also offers the flexibility to handle matters that would be too small for a large law firm environment.
The sections below describe some of the specific areas of Bennett Lasko’s experience. Please contact Lasko Legal Services for more information or to learn about qualifications and experience in other areas.
Bennett Lasko has won dismissals of more than a dozen “stock drop” shareholder class actions under the anti-fraud provisions of Section 10(b) of the 1934 Securities Exchange Act and Sections 11 and 12 of the 1933 Securities Act and often defended those victories on appeal. He also has litigated proxy solicitation, tender offer and short-swing profits cases, among others.
In complex cases, Lasko Legal Services is an ideal choice for co-counsel to independently represent individual directors, officers or professional advisors that may require separate representation but also need to stay well-coordinated with counsel for other parties.
- Successfully defended audit committee chair of regional bank holding company in securities class action and related state-court litigations arising from a financial restatement and adverse regulatory actions relating to loan loss allowances, lending concentration and underwriting controls. Lewis v. Straka, 535 F.Supp.2d 926 (E.D. Wis. 2008).
- Member of multi-firm team defending Ernst & Young LLP in multiple federal securities class actions arising from audit clients’ admission to the largest accounting fraud by a public company prior to Enron. Responsible as lead attorney for several opt-out and other related cases. See, e.g., In re Cendant Corp. Sec. Litig., 76 F.Supp.2d 539 (D.N.J. 1999); 81 F.Supp.2d 550 (D.N.J. 2000); 139 F.Supp.2d 585 (D.N.J. 2001); Semerenko v. Cendant Corp., 223 F.3d 165 (3d Cir. 2000).
- After nearly twelve years of litigation, including a successful mandamus petition to the Second Circuit on attorney-client privilege issues, persuaded plaintiffs to voluntary dismiss inter-related securities class actions against The Dow Chemical Company and Corning, Inc. with prejudice. See In re Dow Corning Corp., 261 F.3d 280 (2d Cir. 2001). Also obtained dismissal of related state-law shareholder derivative actions.
- Argued and won first impression appeal in the Seventh Circuit Court of Appeals determining that class action plaintiffs who received shares in a spinoff lacked standing to sue because they were neither purchasers nor sellers of securities within the meaning of the securities laws. Isquith v. Caremark Int’l, Inc., 136 F.2d 531 (7th Cir. 1998). Also won dismissal of related state court derivative action.
- Obtained judgment on the pleadings and successfully defended appeal in first case litigated under new SEC rules governing the application of section 16(b) short-swing profits provisions to transactions in derivative securities. Magma Power Co. v. The Dow Chemical Co., 136 F.3d 316 (2d Cir. 1998).
Accountants and auditors exercise professional judgment in the face of the unknown. They issue opinions on which their clients and others rely (or with the benefit of hindsight may claim to have relied) in their business transactions and investment decisions. When their ventures end badly, the disappointed parties too often target the accountants as deep pockets from which to recover their alleged losses.
Defending these cases requires an understanding of auditing and accounting concepts, effective communication with accounting professionals, and the ability to translate their work into terms that are clear and persuasive to judges and juries. Bennett Lasko has honed these skills over more than 20 years defending accounting firms and individual professionals in civil malpractice actions and regulatory proceedings.
- Represented accounting firm and individual auditors in first major SEC investigation of systematic and collusive financial reporting fraud involving multiple Chinese-based “reverse merger” companies. Investigation resulted in no action against clients. See In re China Intelligent Lighting & Electronics, Inc., S.E.C. Litigation Release No. 22755 (July 22, 2013).
- Defended accounting firm and individual tax professional in action alleging malpractice in connection with multiple interrelated business, individual, trust and estate tax returns. Settled case in mediation after expert discovery.
- Defended national accounting firm in action by successor owners of small business lender alleging failure to properly audit asset valuations. After the former client was placed in receivership by the Small Business Administration, obtained voluntary dismissal by the receiver.
- Member of multi-firm team defending Ernst & Young LLP in multiple litigations arising from audit clients’ admission to the largest accounting fraud by a public company prior to Enron. Key issues included purchase accounting, merger reserves, revenue recognition, customer cancellation reserves, and intra-company receivables. See, e.g., In re Cendant Corp. Sec. Litig., 139 F.Supp.2d 585 (D.N.J. 2001); 343 F.3d 658 (3d Cir. 2003).
- Defended accounting firm against “deepened insolvency” and other claims arising from the collapse of a small business health insurer. Settled case in mediation following the completion of expert discovery. Reider v. Arthur Andersen LLP, 784 A.2d 464 (Conn. Super. 2001).
Bennett Lasko regularly litigates cases that involve valuation of businesses, securities, real estate and other assets. He is conversant in valuation methodologies and the financial analyses on which they are based. In addition, Bennett serves periodically as a faculty member in expert witness training programs sponsored by the American Institute of Certified Public Accountants to teach AICPA members to be effective expert witnesses in business valuation and lost profits cases.
- Defense of partnership derivative action challenging, inter alia, the valuations at which general partners acquired subordinated tax increment finance bonds issued to the partnerships to support development of two regional shopping malls. Pielet v. Hiffman, 407 Ill.App.3d 788 (2011).
- Prepared and presented appraisal and valuation experts in eight-figure arbitration to determine value of the land underlying a major Chicago hotel for purposes of establishing ground lease rent.
- Obtained arbitration award on behalf of a real estate investment fund on claims that, among other things, joint venture partner intentionally over-valued nine manufactured housing communities acquired by the joint venture in three states.
- Represented acquirer in post-acquisition arbitration based on sellers’ undisclosed changes in accounting methods that materially overstated EBITDA and resulted in inflated acquisition valuation.
- Worked with appraisal experts to demonstrate the lack of material adverse property value impacts resulting from development of wind energy generation facilities.
Mergers and acquisitions are high-stakes transactions that often involve multiple constituencies with differing interests as well as inherent business risks and uncertainties. Especially for public companies, corporate directors and officers may be required to demonstrate in court that they complied with complex fiduciary responsibilities. Individual directors, officers and outside advisors may require separate representation for a variety of reasons. Litigation counsel must be closely coordinated with transactional counsel and ready to “hit the ground running,” as these cases often move very quickly.
In smaller and private transactions, post-acquisition disputes are more common. These typically involve earn-out provisions, working capital adjustments, questions about the accuracy of financial statement or the consistency of accounting practices, and other contractual representations and warranties. Occasionally, they involve allegations of intentional misrepresentation. Bennett Lasko is conversant with these issues and assists clients to resolve them efficiently.
- Defended company’s response to tender offer by controlling shareholder for minority shares, including appointment of a special committee, public disclosures, and the scope of information provided to the offeror and the special committee. See In re Sauer-Danfoss Shareholders Litig., 65 A.3d 1116 (2011).
- Achieved favorable settlement for controlling shareholder The Dow Chemical Company and its affiliated directors in state law class action challenging freeze-out merger negotiated by a special committee and nationally prominent financial advisors.
- Represented acquirer of insurance claims servicing company in arbitration of post-purchase adjustments and financial statement warranty claims arising from accounting changes that accelerated revenue recognition and understated E&O claim reserves and other liabilities.
- Obtained dismissal of third-party claims in post-acquisition lawsuit seeking to hold audit firm liable for sellers’ alleged misclassification of R&D expenses and other financial statement misrepresentations.
- Supervised forensic investigation and advised private equity client in response to evidence that senior client executives failed to conduct full due diligence and suppressed unfavorable information in obtaining approvals for $190 million Silicon Valley acquisition.
“Business divorce” is a shorthand name for a wide range of situations in which business partners or co-venturers want or need to separate their business interests from each other. Too often, their underlying agreements and organizational documents do not provide a clear path for that separation. Like marital divorces, business divorces are at high risk of becoming unreasonably expensive, overheated and destructive for all concerned.
Business divorces become more difficult and more contentious when the differences between the parties are allowed to fester rather than being addressed promptly. Almost always, the parties will be best served to consult counsel sooner rather than later and start looking for a solution before the situation gets out of hand.
- Represented London-based provider of specialty international payroll services in arbitration of disputes resulting from business partner’s inability to attract profitable clients. Brought in co-counsel with specific subject matter expertise and assisted the parties to renegotiate key business terms, streamline operations, and resolve the arbitration by agreement.
- After break-down of business relationship, obtained arbitration award for fraud, misappropriation and breach of fiduciary duty on behalf of investment fund against operating partner in venture to develop, acquire, and operate manufactured housing communities in three states.
- Brought successful action to enforce requirements contract on behalf of wood pulp supplier after break-up of common ownership relationship with paper manufacturer.
- In response to claims by departing medical practice partner that remaining partners took unneeded business loans to manipulate the formula for repurchasing his partnership interests, defended partnership’s accounting firm and assisted parties to resolve the dispute.
- Assisted second generation family business co-owners to resolve disagreements without litigation regarding the portions of available cash flows to be distributed to co-owners or re-invested in the business.
Fiduciary duties are everywhere in the business world. Corporate officers and directors, general partners, and managers all owe fiduciary duties to the business entities that they manage. Partners owe fiduciary duties to each other. Fund managers owe fiduciary duties to the funds that they manage and often to individual investors as well. Attorneys and trustees also are fiduciaries.
Bennett Lasko has litigated dozens of cases involving fiduciary duty claims. He also has served more than sixteen years as a director of two not-for-profit corporations and throughout his career has advised and assisted directors, officers and other business managers to meet their fiduciary obligations and document the appropriateness of their conduct.
- Defense of limited partnership derivative action asserting breaches of fiduciary duty in connection with general partners’ acquisition of subordinated tax increment finance bonds issued to the partnerships, substantial partnership capital call, financial restructuring, and other transactions over a ten-year time period. See Pielet v. Hiffman, 407 Ill.App.3d 788 (2011).
- Investigated and filed breach of fiduciary duty claims against former CEO that held an undisclosed ownership interest in customer that he introduced to the company and assisted to obtain favorable credit terms. Fiduciary claims led to immediate settlement of underlying collection action and all related disputes.
- Supervised forensic investigation and advised private equity client regarding potential claims and other responses to management conflicts of interest in loan transactions and proposed capital restructuring of 75%-owned portfolio company.
- Advised independent directors of leading national mutual fund group on disclosure obligations, potential claims and other remedial measures in response to error by fund advisor that resulted in multi-million-dollar loss to a money market fund.
- Obtained arbitration award for breach of fiduciary duty and other claims against former partner in venture to develop, acquire, and operate manufactured housing communities in three states.
Appeals are very different from trials and other proceedings in the trial courts. Successful appeals typically require a more academic and dispassionate mindset, emphasizing thorough legal research, detailed analysis of the case law, clear and concise writing, an appreciation for nuance, and the ability to engage appellate judges in a compelling oral argument.
Bennett Lasko has been doing appellate work since his judicial clerkship after law school on the Massachusetts Supreme Judicial Court. Since 2013, he has been peer-selected as an Illinois Leading Lawyer in Civil Appellate Law.
- Successfully defended appeal from judgment dismissing claims seeking to invalidate permits for development of the $500 million Twin Groves Wind Farm in eastern McLean County, Illinois. Taylor v. County Board of McLean County, No. 4-06-1108 (Ill. App. 4th Dist. 2006).
- Argued and won first impression appeal in the Seventh Circuit Court of Appeals upholding dismissal on grounds that class action plaintiffs who received shares in a spinoff were neither purchasers nor sellers of securities within the meaning of the federal securities laws. Isquith v. Caremark Int’l, Inc., 136 F.2d 531 (7th Cir. 1998).
- Successful defense on appeal of trial court order granting judgment on the pleadings in first case litigated under new SEC rules governing the application of section 16(b) short-swing profits provisions to transactions in derivative securities. Magma Power Co. v. The Dow Chemical Co., 136 F.3d 316 (2d Cir. 1998).
- Successful mandamus petition to the Second Circuit Court of Appeals on attorney-client privilege issues in securities class action litigation against The Dow Chemical Company and Corning, Inc. as the owners of Dow Corning Corporation. In re Dow Corning Corp., 261 F.3d 280 (2d Cir. 2001).
- Participated in amicus curiae brief on behalf of medical group in support of the petitioner in a key U.S. Supreme Court case establishing standards for the admissibility of expert witness testimony. Kumho Tire Co., Ltd. v. Charmicheal, 526 U.S. 137 (1999).
- Successful appeal to Texas Supreme Court of “death penalty” sanctions for alleged discovery non-compliance in an underlying personal injury action. Chrysler Corp. v. Blackmon, 841 S.W.2d 844 (Tex. 1992).
Successful investigations are guided by the facts and careful attention to the difference between evidence and inference. They require perseverance to get to the facts, careful analysis to understand the facts, and sound judgment to know what to do with them. Different investigations can have different goals or serve different purposes. For example, there can be a wide difference between assisting management to gain an understanding of what happened in a situation and evaluating what can be proven in court on the basis of sound evidence.
Investigations in today’s business environment also require a strong understanding of information technology, e-discovery techniques, and computer forensics. Bennett Lasko is experienced in all of these areas.
- Retained by audit committee of publicly-held technology services company to investigate allegations of improper expenses, sexual harassment, and other misconduct by senior executive.
- Supervised forensic investigation into suspected seller misrepresentations in $190 million private equity acquisition, uncovered evidence that senior executives of the private equity buyer misrepresented the extent of due diligence they conducted and then suppressed unfavorable information to obtain internal approvals.
- Advised independent directors of major national mutual fund group regarding internal investigation and self-reporting to the SEC of errors in calculation of fund yields reported to investors and in fund marketing materials.
- Investigated and filed breach of fiduciary duty claims leading to immediate settlement against former CEO that held an undisclosed ownership interest in a significant customer that he introduced to the company and assisted to obtain favorable credit terms.
- Supervised forensic investigation and prepared report on suspected inventory irregularities and management conflicts of interest in loan transactions and proposed capital restructuring of 75%-owned portfolio company.