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DAVID W ALLARD v ARTHUR ANDERSEN Click to find out why . . .



Keywords & Phrases
CaseNo: AVAA92311, CourtCode: SU, CourtName: NEW YORK STATE SUPERIOR COURT, Plaintiff: DAVID W ALLARD, State: NY New York, UniqueCaseRef: LCD>AVAA92311, Trustee, York, Allard, Dmc, Motion, Supp, Gpd, Partnership, Cir, Evidence, Objections, Complaint, Paragraph, Lorean, Allegations, Manuals, Contract, Cplr, Memorandum, United Kingdom, Exh, Discovery, Drlp, Payments, Delorean, Ireland, Fraud, Bushell, Damages, Statute, Dmcl, Misc, Sup, Limited Partnership, Gpd Contract, Paid, Thc, Horizon, Breach, Accounting, Fiduciary Duty, Prejudice, Deny, Exclude, Exhibit, App, Support, Guilty Plea, Information Sufficient, Mediators, Guilty, Tax, Relating , ContentID: 120243486

Case Documents
1   HEARING MMM
[ see first page and extracted highlights below  ] ItemID: 107590
4 pages
PDF
2 2000-05 DELOREAN MEET W LAWYERS NOV 1984
[ see first page and extracted highlights below  ] ItemID: 107588
7 pages
PDF
3 1998-05-27 DEF REP MEM IN S MFJ ALT
[ see first page and extracted highlights below  ] ItemID: 107584
5 pages
PDF
4 1998-05-18 SHIMER AFFIDAVIT
[ see first page and extracted highlights below  ] ItemID: 107602
4 pages
PDF
5 1998-05-18 MEM IN OPP TO DEF ALT NEW
[ see first page and extracted highlights below  ] ItemID: 107591
5 pages
PDF
6 1998-05-18 HEARING
[ see first page and extracted highlights below  ] ItemID: 107589
6 pages
PDF
7 1998-04-20 DEF MEM RE VERDICT OR ALT
[ see first page and extracted highlights below  ] ItemID: 107583
6 pages
PDF
8 1998-03-10 PLF MEM IN OPP SUMM JUDGM
[ see first page and extracted highlights below  ] ItemID: 107597
6 pages
PDF
9 1998-03-10 DEF REQUEST TO CHARGE
[ see first page and extracted highlights below  ] ItemID: 107587
6 pages
PDF
10 1998-03-10 DEF MEM IN SUP MFSUMM JUD
[ see first page and extracted highlights below  ] ItemID: 107582
5 pages
PDF
11 1998-03-10 DEF FURTH SUP OF MFSUMM J
[ see first page and extracted highlights below  ] ItemID: 107579
5 pages
PDF
12 1998-03-04 PLF PROP JURY INSTRUCTION
[ see first page and extracted highlights below  ] ItemID: 107600
4 pages
PDF
13 1998-02-18 PLF MEM IN OPP MIN LIMINE
[ see first page and extracted highlights below  ] ItemID: 107596
9 pages
PDF
14 1998-02-11 STATEMENT
[ see first page and extracted highlights below  ] ItemID: 107603
2 pages
PDF
15 1998-02-08 DEF MEM IN LIMINE IRR,MIS
[ see first page and extracted highlights below  ] ItemID: 107580
5 pages
PDF
16 1997-12-09 DEF REPLY MEM IN LIMINE
[ see first page and extracted highlights below  ] ItemID: 107586
6 pages
PDF
17 1997-09-26 ANSWER
[ see first page and extracted highlights below  ] ItemID: 107577
6 pages
PDF
18 1997-09-24 PRE ARGUEMENT SYATEMENT
[ see first page and extracted highlights below  ] ItemID: 107601
4 pages
PDF
19 1997-09-18 ZIRIN AFF VACATE
[ see first page and extracted highlights below  ] ItemID: 107608
4 pages
PDF
20 1997-09-18 STATEMENT
[ see first page and extracted highlights below  ] ItemID: 107605
5 pages
PDF
21 1997-09-18 MEM IN OPP TO VACATE NOI
[ see first page and extracted highlights below  ] ItemID: 107592
6 pages
PDF
22 1997-09-18 DEF REP MEM TO VACATE NOI
[ see first page and extracted highlights below  ] ItemID: 107585
5 pages
PDF
23 1997-09-18 DEF MEM IN S MTD VACATE
[ see first page and extracted highlights below  ] ItemID: 107581
5 pages
PDF
24 1997-04-23 STATEMENT
[ see first page and extracted highlights below  ] ItemID: 107604
8 pages
PDF
25 1997-03-20 COMPLAINT
[ see first page and extracted highlights below  ] ItemID: 107578
4 pages
PDF
26 1996-11-12 TYLER STATEMENT
[ see first page and extracted highlights below  ] ItemID: 107607
6 pages
PDF
27 1993-02-25 PLF FEPLY MEM M ORD ATTAC
[ see first page and extracted highlights below  ] ItemID: 107595
5 pages
PDF
28 1992-10-02 PLF OBJECTIONS AND RESPS
[ see first page and extracted highlights below  ] ItemID: 107599
5 pages
PDF
29 1992-10-02 PLF OBJECT TO 2ND SET INT
[ see first page and extracted highlights below  ] ItemID: 107598
4 pages
PDF
30 1992-03-18 THATCHER DEPOSITION
[ see first page and extracted highlights below  ] ItemID: 107606
5 pages
PDF
31 1991-05-17 MEMO DECISION
[ see first page and extracted highlights below  ] ItemID: 107594
4 pages
PDF
32 1988-09-01 Government Exhibit # 2ND AMENDED COMP
[ see first page and extracted highlights below  ] ItemID: 107576
4 pages
PDF
33 1976-06-01 MEMO AND ORDER
[ see first page and extracted highlights below  ] ItemID: 107593
5 pages
PDF
Total Documents: 33 documents , 170 pages
Price: $ 179.95


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1 . HEARING MMM

EXTRACTED KEY WORDS
TECHNOLOGY
JURORS
VARI
SANDWICH
MOLD
LAY
MAKING PLASTIC BOD
PLASTIC BOD IES
THA
WORTH
TOOLIN
SOMEPLACE
LOTUS
                      d
                      d
                      W







                      3
                      0
                      a
                      H

                      -rl
                      n
        u
I\.     u             2
        Q)            A
0       k             H
a,      k             d
cn                    m
rl      u
        0



               P.
01      4      k
               3
               0
               d
               k
               w
               a






                                                                                 . - --






SNIPPETS:
  • the technology and the process.
  • I`m not sure the jurors understand
  • 11 process as it was c a l l e d, VARI.
  • on a sandwich, they have a f e m a l e mold a n d they lay
  • would have been making plastic bod ies
  • 12 is tha t right?
  • 5 plant and then brought o v e r to t h e DM CL plant?
  • 18 m a k e t he first six months worth of C a rs?
  • ,g from someplace else?
  • 4 Lotus h a d?

  • 2 . DELOREAN MEET W LAWYERS NOV 1984

    EXTRACTED KEY WORDS
    VOULD
    RECEIVERS
    ARTHUR
    ID8
    PREPARING
    THA
    VITH
    TRUSTEE
    ANOTTCR COAPPRNY
    APPCARR
    HROE
    VAS
    SONE
    CONNECTED VITH
    DRUGS
    RTGUIRT
    RLOUNTR
    MADT
    TH8
    TKR
    FEELING
    BCTN
    PAYMENTS
    PRCVIOSR
    COALD
    RECKONING
    IAVTSTI5ATION
    TTRRR
    PLACA
    
                                                                                                       
          t                                                                                            
    
           * -   t
    1
    
    
    
    
    
    
                        isrues.  It also  contains  some background  which  was  uraful  t o  me as I
    
                        newcomer to  t h e   subject,  though  it  may br familiar to  otkerr.  .
    
    
                       2.  lfr Schadr  began by  outlining the general  po8ition vith rcgrrd  t o   tbr
                                                                                    z
                       reeov~ry of assets  from De Larcm.  When  the cmpany  weat  into
    
                       bankruptcy i t  had no  assets and the asstta'b*ing pursue!  by creditors
                                                                              -           . 1
                       are represented  by Claim8 against  third  p r t k i r s   (Fc               
    
                       Arthur  Andrrstn  and  otherr).  The  normal proctdcre  ia  rcalisir.;  assets
    
                       under  a Chapter 7 procedure is that vhen  realisad  a  e o u Z   d K i d t 8  
    
                       distribution and t h i 8   is implement  if  unehallrnggcd.                 I n 
    
                       cast it  i s  pos8ible that De brcan  himself or  Rcnault  Gigkt  cli&le8~e
    
                       the  ID8  claim.  I t   i s  felt at p r e p t   that 8uch a c?.alltr~c would  b
    
                       unlikely  iron  e i t h e r   quart&,  mainly  ttCause,  i n  t h e   e r e  of
    
                       Kr  De hrcan  he w u l d  be CtTJlttd t o   incur  further  r e t r a n t i a l 
    
                       costa  to rupport an  action and  because  pursuit  of r;ct                   UI
    
    
    
    
    
    
    
    
    
    
    
    SNIPPETS:
  • bankruptcy i t had no assets and the asstta'b*ing pursue!
  • Arthur Andrrstn and otherr).
  • is similar t o t h CG action and is anottcr coapprny in which De 4 t u n
  • appcarr t o hroe had a =all f i m n e i a l i n t e r e s t and which vas involved i n
  • meet sone of h i s l e s ~ le rp s s e r connected vith t h e drugs t r i a l.
  • Trustee co;tld rtguirt p y c- m t of these rlountr t o bc madt for th8
  • k n c f f t Gf tkr Trur:cts.
  • Z x r e fa a feeling that t k r c M y have bctn
  • other payments in prcviosr years which coald b brought into t h e
  • reckoning md further iavtsti5ation of ttrrr 1s taking placa.
  • inforaatfon t o Schada and they are preparing A report on tgrofcssionrl cccpctencc of Arthur
  • De Gorean accounts- Schadc suggested that the ID8 or the Receiver.
  • pursue the case rather t h a n rhr J o i n t Receivers since t h i s vould rnrble
  • thm Trustee which is kased q a n a l l tha assets of hr harean.

  • 3 . DEF REP MEM IN S MFJ ALT

    EXTRACTED KEY WORDS
    CORN
    SUP
    YORK
    ALLARD
    AUTHORITY
    TRANSIT
    MISC
    SUPP
    CERT
    COW
    DISTRICT
    BROTHERS
    CREDIT
    SEIDMAN
    LITIGATION
    HIRSCH
    CORCORAN
    AFFD
    BANK
    APP
    CIV
    CREDIT ALLIANCE CORN
    CURIALE
    PEAT
    MARWICK
    MITCHELL
    DERDIARIAN
    FELIX CONTRACTING CORN
    ERNST
    
    SUPRJZME  COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
    DAVID W. ALLARD, JR, Trustee of
    DeLorean  Motor  Company,                              Index No. 60 1473197
                                  Plaintiff,               Justice  Gammerman
                 -against -                                IAS Part 27
    ARTHUR ANDERSEN  & CO. (U.S.A.),
    ARTHUR ANDERSEN & CO. (Republic  of Ireland),  and
    ARTHUR ANDERSEN & CO. (United Kingdom),
    
                                  Defendants.
    
                   DEFENDANTS'  REPLY MEMORANDUM IN FURTHER
              SUPPORT OF MOTION  FOR JUDGMENT NOTWITHSTANDING
                 THE VERDICT OR IN THE: ALTERNATIVE  A NEW TRIAL
    
    
    
    
    
    
    
    
    
    
                                                    BROWN &-WOOD LLP
                                                    Attorneys  for Defendants
                                                    One World Trade Center
                                                    New York,  New York  10048
                                                    (212) 839-5300
    
    
    
                                                                 Table of Contents
    
    
                                                                                                       
    
    Table of Authorities
    
    Prellmlnary
             . .   Statement
    I.           ALLARD FAILED TO PROVE DAMAGES TO DMC
                 PROXIMATELY CAUSED BY ACTS OR OMISSIONS OF AA ......................................  3
    
                 A.         DMC Was Not Injured by Its Increased Indebtedness
    
                  B.         As a Matter of Law, the Case Presented to the
                             Jury Did Not Establish Proximate Causation.,
    
    SNIPPETS:
  • SUPRJZME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • THAT A4 RECEIVE A CREDIT FOR SETTLEMENTS
  • BY ALLARD FROM OTHER PERSONS
  • Allard v. Arthur Andersen & Co,, 924 F. Supp.
  • 130 F.3d 657 (5th Cir.
  • Cenco, Inc. v. Seidman & Seidman, 686 F.2d 449,
  • sub nom., Hirsch v. Arthur
  • Corcoran v. Ambassador Group, Inc., No. 28414/85 (Sup.
  • Oct. 30, 1986), affd, without opinion, 131 A.D.2d 983
  • Cotten v. Republic National Bank,
  • Civ.
  • App.
  • Credit Alliance Corn.
  • Curiale v. Peat, Marwick, Mitchell & Co., 2 14 A.D.2d 16.
  • Derdiarian v. Felix Contracting Corn.,
  • FDIC v. Ernst & Young,
  • Fidel v. Brooklyn & Queens Transit Corp,, 242 A.D. 791
  • Hertz Corn., 130 Misc.
  • Bank of Baroda, 87 F.3d 614, cert.
  • In re Joint Eastern District & Southern District Asbestos Litigation.
  • Dormitory Authority.
  • Gimbel Brothers.
  • Cow., 71 N.Y.2d 599

  • 4 . SHIMER AFFIDAVIT

    EXTRACTED KEY WORDS
    TRUSTEE
    LOREAN
    JOHN
    PAID
    YORK
    COURT
    COUNTY
    DAVID
    ALLARD
    LOREAN MOTOR
    DEFENDANTS
    MOTION
    MEMORANDUM
    LAW
    REFERENCE
    PAYMENTS
    MANUFACTURING
    UTAH
    SNOW GROOMING EQUIPMENT
    MORTGAGES
    EXPENSES
    COURT ORDER
    FAMILY TRUST
    ROY NESSETH
    LAWYER
    THOMAS
    WHEREFORE
    TRUSTEE RESPECTFULLY REQUESTS
    ENTIRETY
    
    SUPREME COURT OF THE STATE OF NEW YORK
    COUNTY  OF NEW YORK
    
    
    DAVID W. ALLARD, JR., Trustee of
    De Lorean Motor Company,
                                          Plaintiff,                  Index No. 601473/97
                                                              :       (Part 27)
                                                                      Justice Gammerman
    
                          -against-                                   AFFIDAVIT OF ZACHARY
                                                              :       SHIMER IN OPPOSITION
    ARTHUR ANDERSEN &  CO.  (U.S.A.),
                                                  ARTHUR              TO DEFENDANTS'
    ANDERSEN &  CO.  (Republic of Ireland)                    :  MOTION FOR  JUDGMENT
    and ARTHUR ANDERSEN.& CO.  (United                                NOTWITHSTANDING THE
    Kingdom) ,                                                :  VERDICT OR IN THE             I
                                                                      ALTERNATIVE A NEW
                                           Defendants.  :  TRIAL
    - -  - - - - - - - - - - - - - -  - - - - - - - - - - -  - x
    
    
    STATE OF NEW YORK  ) :  s s . :
    COUNTY OF NEW YORK
                   ZACHARY SHIMER, being duly sworn, deposes and says:
    
                   1.  I am a member of Chadbourne &  Parke LLP,  counsel
    
    f o r  plaintiff, David W. Allard, Jr., Trustee of De Lorean Motor
    
    Company  (the llTrusteell).  I am fully familiar with the prior
    proceedings herein and  am respectfully submitting this affidavit
    in opposition to Defendants' Motion f o r   Judgment Notwithstanding
    
    the Verdict or i n  the Alternative a New Trial.
    
    
    
    e                                              a            *
    
    
                    3.  The Trustee's memorandum of law also makes
          reference to certain exhibits in evidence at the trial.  Such
          exhibits are annexed as follows:
    
                    Exhibit B  PX 2
                    Exhibit C  PX 100
                    Exhibit D  PX 175
                    Exhibit E  PX 176
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • DAVID W. ALLARD, JR., Trustee of De Lorean Motor Company,
  • I am fully familiar with the prior proceedings herein and am respectfully submitting this
  • The Trustee's memorandum of law also makes reference to certain exhibits in evidence at the
  • Exhibit C PX 100
  • My familiarity with and review of the Trustee's records establishes that the Trustee made
  • to several entities in connection with the settlement between the Trustee and John De Lorean.
  • Manufacturing, a Utah based snow grooming equipment
  • $866,714.41 was paid to cover mortgages and other
  • expenses on certain of John De Lorean's properties which had
  • been restrained by court order; $424,000 was paid to the John De
  • Lorean's family Trust for the benefit of his children;
  • $16,863.19 was paid to John De Lorean's associate, Roy Nesseth;
  • and $50,000 was paid to John De Lorean's lawyer, Thomas W. Kimmerly.
  • WHEREFORE, the Trustee respectfully requests that the motion of defendant Arthur Andersen &

  • 5 . MEM IN OPP TO DEF ALT NEW

    EXTRACTED KEY WORDS
    YORK
    SUP
    CTY
    CONTRACT
    SUPP
    VERDICT
    DEPLT
    CITY
    CORCORAN
    APP
    ESTATE
    ILL
    LOREAN
    MOTOR
    MOTION
    CIR
    QUEENS
    CRENSHAW
    FOLLEY
    BOXBERSER
    BUNDT
    EMBRO
    BUTLER
    BROWN
    CAPITAL WIRELESS
    DELOITTE
    TOUCHE
    CEA
    HAMPTON AFFILIATES
    
    SUPREME COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
    
    
    DAVID W. ALLARD, JR., Trustee of
    De Lorean Motor Company,
    
                                      Plaintiff,            Index No. 601473/97
                                                      :     ( P a r t   2 7 )
                       -against -                           Justice Gammerman
    
    ARTHUR ANDERSEN &  CO.  (U.S.A.),
                                          ARTHUR
    ANDERSEN &  CO.  (Republic of Ireland)
    and ARTHUR ANDERSEN &  CO.  (United
    Kingdom) ,
    
                                      Defendants.  :
    
    
    
    
                        MEMORANDUM OF LAW IN OPPOSITION
                       TO DEFENDANTS' MOTION FOR JUDGMENT
                       NOTWITHSTANDING THE VERDICT OR IN
                          THE ALTERNATIVE R NEW TRIAL
    
    
    
    
    
                                        CHADBOURNE &  PARKE LLP
                                          Attorneys fox-  P l a i n t i f f
                                        3 0   Rockefeller Plaza
                                        New York, New York  10112
                                        ( 2 1 2 )   408-5100
    
    Zachary Shimer
    Marjorie L. Cohen
    Timothy M. Hughes
    Rachel L. Simon
    Shelby K. Ulan
         Of Counsel
    
    
    
                                                         TABLE OF CONTENTS
                                                                                                       
    
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • DAVID W. ALLARD, JR., Trustee of De Lorean Motor Company,
  • TO DEFENDANTS' MOTION FOR JUDGMENT
  • A ' s Malpractice and Breach of Contract
  • I1 THERE ARE NO OFFSETS AGAINST THE VERDICT OF
  • IV THE JURY FOUND THAT DE LOREAN WAS ACTING ONLY TO
  • 93 Prince Street Corp. v. Wolf, 11 Misc.
  • 29 Board of Education v. Sarqent, Webstter, Crenshaw & Folley,
  • Boxberser v.
  • 35 Bundt v. Embro, 48 Misc.
  • 2d 802, 265 N.Y.S.2d 872 (Sup.
  • Queens Cty.
  • 3 Butler v. Brown, 180 A.D.2d 406, 579 N.Y.S.2d 79 (1st Deplt
  • Capital Wireless Corp. v. Deloitte & Touche, 216 A.D.2d 6 6 3,
  • N.Y.S.2d 794 (3d Deplt 1995)
  • Cea v. Freed, 178 A.D.2d 397, 577 N.Y.S.2d 101 (2d Deplt
  • Center v. Hampton Affiliates Inc., 66 N.Y.2d 782, 497
  • City of Milwaukee v. Cement Div., Nat'l Gypsum Co., 515 U.S.
  • Corcoran v. Ambassador Group, Inc., Index No. 28414/85 (Sup.
  • App.
  • Dept. of Economic Development v. Arthur Andersen & Co., 683 F. Supp.
  • Matter of Estate of Rothko, 43 N.Y.2d 305, 401 N.Y.S.2d
  • Fidel v. Brooklyn & Queens Transit Corp., 242 A.D. 791, 274
  • 966 F.2d 101 (2d Cir.
  • Holland v. Arthur Andersen & Co., 571 N.E. 2d 777 (Ill.

  • 6 . HEARING

    EXTRACTED KEY WORDS
    TOOLING
    BODY SHELL
    DRAWINGS
    ROBB
    CONFIRMATION
    SATISFACTION
    SANDWICH
    PRODUCTION
    DIGIOVANNA
    FOAM BEAMS
    CONTRACT
    VAGUE
    BOTTOM
    PLASTICS
    SHOT
    RPR
    CRR
    MOLD
    GAP
    DISAPPEAR
    STATIC POSITION
    SHAKES
    LUCK
    DMC-12
    CHRISTMAS
    FOAM BEAMS FIT
    RECEIVED FIBERGLASS TOOLING
    MASS PRODUCTION
    BODY SHOP
    
                                        e
    
                                                                              2 9 9
    
     1               Mulholland  -  B y   Plaintiff -  Direct/Hess
    
     2       what  do you mean by that?
    
     3                A      Well, when I  visited Lotus at that
     4       particular time, they produced  t h e   body  shell for
    
     5       us.
     6                               I  talk about  a  body shell, maybe  I
    
     7       should try and  simplify it.
     a                               I would describe  it as a  cheese
    
     9       sandwich.  The bottom p i e c e   of  the bread  is the
    
    1 0      female, naturally, tool and the  top one is  the
    11       male.  And  in between you  have  the  sandwiches.
    
    12                               W e l l ,   a  body  shell basically is a
    
    1 3      bottom and a  t o p   with the p l a s t i c   i n j e c t e d   into the
    
    14       s p a c e   between it.  Now, to do  that, you have to
    
    1 5      pull o u t   the air and maintain  t h e   g a p  to allow the
    
    16       plastic  to be  shot into it.  And once it is  shot,
    
    1 7      you've  got to maintain a  vacuum to ensure that that
    
    18       gap doesn't  disappear or become  larger.
    
    1 9                              The Lotus system was  that they
    
    2 0      injected  into t h e   body  shell on a  trolly in a
    
    2 1      static position,  they give a  few little shakes for
    
    2 2      luck, and waited until it had  set.  Naturally, that
    
    23       took time.
    
    2 4                              We c o u l d   not adopt that particular
    
    2 5      a p p r o a c h   as to the production of  the DMC-12.  We
    
    SNIPPETS:
  • they produced t h e body shell for
  • sandwich.
  • The bottom p i e c e of the bread is the
  • 16 plastic to be shot into it.
  • 18 gap doesn't disappear or become larger.
  • they give a few little shakes for
  • 2 luck, and waited until it had set.
  • 5 a p p r o a c h as to the production of the DMC-12.
  • B R I A N DiGIOVANNA, RPR, CRR
  • Christmas of 1980.
  • drawings of the tooling, we received the mold
  • W e received those from Lotus.
  • 14 example, for the foam beams, which are b e a m s - 1 5 hard foam beams fit into t h e body
  • W e received fiberglass tooling.
  • 17 And it was not suitable f o r a mass production that
  • the body shop were for t h e molds themselves and any
  • plastics in between t w o stainless steel
  • Robb at t h e end of t h e deposition
  • I looked for Confirmation from Lotus.
  • They handled it to their satisfaction, and their satisfaction was my satisfaction.
  • that the GPD contract was vague?
  • "ANSWER: Yes, it was vague.

  • 7 . DEF MEM RE VERDICT OR ALT

    EXTRACTED KEY WORDS
    SUPP
    ALLARD
    APP
    UNITED STATES
    HIRSCH
    OVERSEAS INVESTORS
    YORK
    COUNTY
    CIV
    OVERSEAS
    SUP
    PARTNERSHIP
    LITIGATION
    TRANSIT
    HOLDINGS
    CORN
    AUTHORITIES
    JURY
    PROXIMATE
    CAUSATION
    CREDIT
    BANK
    DIV
    CERT
    TRUST
    MISC
    QUEENS
    MARINE
    CITIBANK
    
                SUPREME  COURT OF THE STATE OF NEW YORK
                COUNTY OF NEW YORK
                DAVID W. ALLARD, JR,  Trustee  of
                Debrean  Motor  Company,
                                                                       Index  No. 601473197
                                               Plaintiff,
                                                                       Justice Gammerman
                                -against -                             IAS Part 27
                ARTHUR ANDERSEN & CO. (U.S.A.),
                ARTHUR ANDERSEN  & CO. (Republic  of Ireland), and
                ARTHUR ANDERSEN & CO. (United Kingdom),
    
                                               Defendants.
    
                                       DEFENDANTS' MEMORANDUM IN SUPPORT OF
                                       MOTION  FOR  JUDGMENT  NOTWITHSTANDING
                                THE VERDICT  OR IN THE ALTERNATIVE  A NEW TRIAL
    
    
    
    
    
    
    
    
    a
          e
                Of Counsel:                                     BROWN & WOOD  LLP
                                                                 Attorneys
          *      James  D.
                           Zirin                                           for Defendants
          t
    a            James  J. Sabella                               One World  Trade  Center
                 Madeleine  J. Dowling                          New York,  New York  10048
                                                                 (212) 839-5300
    
    
    
                                                                                                       
    
    
    
    
    
    
    
    
    
    
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • Table of Authorities
  • Jury Failed to Satisfy the Proximate Causation Requirement
  • TO ALLARD
  • App.
  • Allard v. Arthur Andersen & Co., 957 F. Supp.
  • Allard v. Arthur Andersen & Co., No. 84 Civ.
  • 130 F.3d 657 (5th Cir.
  • Bank of Credit & Commerce International (Overseas) Ltd. v. Price Waterhouse,
  • Div.
  • cert.
  • Bennett v. United States Trust Co.,
  • Bundt v. Embro, 48 Misc.
  • Caplin v. Marine Midland Grace Trust Co., 406 U.S. 4 16
  • Citibank, N.A. v. K-H Corp., 968 F.2d 1489 (2d Cir.
  • In re Colonial Limited Partnership Litigation,
  • Hirsch v. Arthur Andersen & Co.,
  • Cotton v. Republic National Bank,
  • Fidel v. Brooklyn & Queens Transit Corp., 242 A.D. 791
  • Gouiran Holdings.
  • 2d 1034 (Sup.
  • Overseas Investors.
  • Prince Street Corn.

  • 8 . PLF MEM IN OPP SUMM JUDGM

    EXTRACTED KEY WORDS
    SUPP
    MISC
    YORK
    APP
    CITIES SERVICE OIL
    BANKR
    LITIG
    MANAGEMENT
    DEL
    CPLR
    COURT
    MOTOR
    TRUSTEE
    STATUTE
    CORU
    TOUCHE
    BANK
    CONSOLIDATED COPPERMINES
    SUP
    GOUIRAN HOLDINGS
    PRINZI
    SPRINGER
    KEIFER
    GRANITE PARTNERS
    HANNOVER
    BECKNER
    FIRSCH
    HOLLAND
    ILL
    
    SUPREME  COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
    
    
    
    DAVID W. ALLARD, JR., Trustee of                             :  Index  No. 97/601473
    De Lorean Motor Company,
                                                                 :           Part11
                                           Plaintiff,
                                                                 :  Justice  Friedman
                                                                       '
                           -against-
    
    ARTHUR ANDERSEN & CO.
                                  (U.S.A.),
    ARTHUR ANDERSEN & CO.
                                  (Republic of
    Ireland)  and ARTHUR ANDERSEN & CO.
    (United Kingdom),
    
                                           Defendants.
    
    
    
    
    
    
                          MOTION  FOR  SUMMARY JUDGMENT
    
    
    
    
    
                                                          CEIADBOURNE  & PARFCE  LLP
                                                           Attorneys for Plaintiff
                                                          30 Rockefeller Plaza
                                                          New York,  New York  10112
                                                          (212) 408-5100.
    
    
    
                                                            TABLE  OF CONTENTS
    
    
                                                                                                       
    
           Preliminary Statement 
    
    
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • NOT BARRED BY THE STATUTE OF LIMITATIONS
  • POINT IV THE TRUSTEE HAS PROPERLY ASSERTED
  • Ahern v. Gaussoin, 611 F. Supp.
  • 74 F.2d 5 19 (7th Cir.
  • CaDital Wireless Coru.
  • Consolidated Coppermines Corn.
  • Misc.
  • 96 N.Y.S.2d 1 18 (App.
  • Prinzi, Springer, Keifer & Shall (In re Gouiran Holdings, Inc.), 165 B.R. 104 (E.D.N.Y.
  • In re Granite Partners.
  • Hannover Corp. v. Beckner, 211 B.R. 849 (M.D.
  • firsch v. Arthur Andersen & Co.,
  • Holland v. Arthur Andersen & Co., 571 N.E.2d 777 (Ill.
  • Izquierdo v. Cities Service Oil Co.,
  • N.Y.S.2d 58 (Sup.
  • KE ProDertv Management Inc. v. 275 Madison Management Corp.,
  • LEXIS 147 (Del.
  • Matanuska Vallev Bank v. Arnold,
  • In re Maxwell Newspapers, Inc., 164 B.R. 858 (Bankr.
  • Touche, 255 N.Y. 170, 174 N.E. 44 1
  • White Motor Corp., 52 1 F.2d 1 1 13 (2d Cir.
  • Litig., 138 B.R. 5 (Bankr.
  • CPLR 205

  • 9 . DEF REQUEST TO CHARGE

    EXTRACTED KEY WORDS
    REQUESTS
    YORK
    TRUSTEE
    UNITED KINGDOM
    DEFENDANTS
    JURY
    SUPREME COURT
    COUNTY
    DAVID
    ALLARD
    DELOREAN MOTOR
    PLAINTIFF
    INTRODUCTORY
    DEFENSES
    CONTRACT
    FRAUD
    CHARGE
    RESERVES
    MOTION
    RAISE
    DIRECTED VERDICT
    PREJUDICE
    WAIVER
    CONTENTIONS
    MOTIONS HERETOFORE
    INSTRUCTIONS
    LAW
    OPINIONS
    RELATING
    
    SUPREME COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
    
    DAVID W. ALLARD, JR., Trustee of DeLorean Motor
    Company,
                                                              Index No. : 601473/97
                               Plaintiff,
    
                 -against-
                                                              IAS Part 11
    ARTHUR ANDERSEN & CO. (U.S.A.), ARTHUR
    ANDERSEN & CO. (Republic of Ireland), and                 Justice Friedman
    ARTHUR ANDERSEN & CO. (United Kingdom),
    
                               Defendants.
    
    
    
                                              DEFENDANTS'
                                    REQUESTS  TO CHARGE
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                                                      BROWN & WOOD LLP
                                                      Attorneys for Defendants
                                                      One World Trade Center
                                                      New York, New York  10048
                                                      (212) 839-5300
    
    
    
                                               Table of Contents
    
    
            Towic                                                    Request No.
    
    
    I.      INTRODUCTORY POINTS
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • DAVID W. ALLARD, JR., Trustee of DeLorean Motor Company,
  • Plaintiff,
  • INTRODUCTORY POINTS
  • Multiple Claims and Defenses
  • Jury to Be Concerned Only With Those Parties
  • THE ROLE OF THE TRUSTEE
  • Misappropriated GPD Contract Proceeds
  • AIDING AND ABETTING FRAUD
  • Defendants Arthur Andersen & Co., Arthur Andersen & Co. (Republic of
  • and Arthur Andersen & Co. (United Kingdom)
  • respectfully request the Court to charge the jury as follows,
  • AA reserves the right to amend or supplement these requests at any time during the
  • These requests are also submitted subject to AA's
  • reservation of its right under the CPLR to raise available defenses to any and all claims
  • by plaintiffs, by motion for directed verdict or otherwise, and are submitted without
  • or waiver of such positions and contentions as have been raised by AA in motions heretofore
  • These requested charges include instructions concerning issues of law with respect to
  • which this Court or other courts have expressed views in opinions in or relating to this case.

  • 10 . DEF MEM IN SUP MFSUMM JUD

    EXTRACTED KEY WORDS
    ALLARD
    DAMAGES
    GPD
    ALLEGED CLAIM
    AUTOMOBILE
    MOTOR
    LIMITED PARTNERSHIP
    DMC
    CAR
    CONTRACT
    DMC-12
    LOAN
    PRODUCTION
    HMG
    DMCL
    ENGINEERING
    DRLP
    PAYMENTS
    LOTUS
    TRUSTEE
    DEEPENING INSOLVENCY
    ALLEGED KICKBACK
    EXH
    ZIRIN
    RECOVER
    PREJUDICE
    AFF
    SUPP
    COMPLAINT
    
    ". r' *i  SUPREME COURT OF THE STATE OF NEW YORK
               COUNTY  OF NEW YORK
       '3
    
               DAVID W. ALLARD,  JR,  Trustee  of
               DeLorean Motor  Company,                                           I Index No. 601473/97
      1                                             Plaintiff,                    I IAS Part 11
                                     -against -
                                                                                        Justice Friedman
               ARTHUR ANDERSEN & CO. (USA.),
               ARTHUR  ANDERSEN  & CO,
                                                    (Republic of Ireland)
               ARTHUR  ANDERSEN  & CO. (United Kingdom),
    
                                                    Defendants.
    
                                                                                  I
    
    
    
    
                                      DEFENDANTS'  MEMORANDUM  IN SUPPORT
                                          OF MOTION  FOR  SUMlMGRY 'JUDGMENT
                                                                                                F\LED
    
    
    
                                                                         BROWN & WOOD LLP
               Of Counsel:                                               Attorneys for  Defendants
                                                                         One  World  Trade  Center
                      James  D. Zirin                                    New York,  New York  10048
                      James  J.  Sabella                                 (212) 839-5300
    
    
    
                                                                  Table of Contents
    
    
    
    Prellmlnary
             . -        Statement..
    
    
    Statement of Facts
    
    ARGUMENT
    
    I.           ALLARD LACKS STANDING TO PURSUE
                 THE ALLEGED CLAIMS AGAINST AA
    
    SNIPPETS:
  • ALLEGED CLAIM FOR "DEEPENING INSOLVENCY"
  • PUNITIVE DAMAGES
  • This case involves an alleged kickback scheme whereby it is claimed that John DeLorean e and
  • not a penny came from DeLorean Motor Company
  • , of which trustee in bankruptcy David W. Allard, Jr.
  • DMC, has no claim for the $17.65 million or for any alleged lost profits;
  • in an effort to recover outlandish and grossly exaggerated damages4 from the auditors for
  • prejudice is Exh.
  • to the Affidavit of James D. Zirin, sworn to November 25, 1997.
  • stipulation discontinuing this action with prejudice is Zirh Aff.
  • See Allard v. Arthur Andersen & Co., 924 F. Supp.
  • The complaint seeks "in excess of $100,000,000" in compensatory damages, at least an
  • enable the manufacture in Northern Ireland of a new automobile,
  • where he'had a track record at Pontiac in automobile production.
  • DMCL.
  • To bring the car to launch, substantial research and development and product engineering
  • Limited Partnership ' and GPD Services, Inc., a Swiss-based Panamanian
  • DRLP was formed on September 22, 1978 to raise money for research and development on the
  • whereby GPD agreed to provide certain research and development for the DeLorean
  • additional payments for salaries and materials.
  • part of the contract, GPD acknowledged that it had retained the personal services of Colin
  • Chapman, the chairman and principal shareholder of Lotus, a well-known publicly held English
  • The project was continually short of money, and HMG was called upon to advance
  • million in loan guarantees), May 1980, and December 198 1

  • 11 . DEF FURTH SUP OF MFSUMM J

    EXTRACTED KEY WORDS
    YORK
    MEDIATORS
    COURT
    TRUSTEE
    PLAINTIFF
    BAR
    LAW
    MEMORANDUM
    MOTION
    WAGONER
    COMMITTEE
    DEFENDANTS
    SUPPORT
    SUMMARY JUDGMENT
    ALLARD MEM
    CIR
    CREDITORS COMMITTEE
    BREACH
    SECOND CIRCUIT
    FIDUCIARY DUTY
    PLAINTIFF LACKS STANDING
    DAMAGES
    HIRSCH
    JUDGE
    RESORTS
    DISPUTING
    INTERPRETATION
    MOREOVER
    ALLEGATION
    
          SUPREME COURT OF THE  STATE OF NEW  Y O N
          COUNTY OF NEW YOFX
    
          DAVID W. ALLARD, JR, Trustee  of
          DeLorean Motor  Company,                                     Index No. 601473/97
                                             Plaintiff,
                                                                       IAS Part 1 1
                               -against-
    a                                                                  Justice Friedman
          ARTHUR ANDERSEN & CO. (USA.),
          ARTHUR  ANDERSEN & CO. (Republic of Ireland)
          ARTHUR  ANDERSEN & CO. (United Kingdom),
    
                                             Defendants.
    8
    
                          DEFENDANTS'  REPLY MEMORANDUM  IN FURT**ER  MbR  1 0 lW
                           SUPPORT  OF MOTION  FOR  SUMMARY JUDGMENT
    
    
    
    
    
    
    
    
    
    
    
                                                             BROWN & WOOD LLP
          Of Counsel:                                        Attorneys  for Defendants
                                                             One  World  Trade  Center
                 James D.
                          Zirin                              New York, New York  10048
                 James J. Sabella                            (212) 839-5300
    
    
    
                                      Table of Contents
    
    
    
    I.       PLAINTIFF LACKS STANDING TO
             PURSUE THE ALLEGED CLAIMS AT BAR. ..............................      2
    
    11.      AA IS ENTITLED TO SUMMARY
             JUDGMENT WITH RESPECT TO ALLEGED
             DEEPENING INSOLVENCY" DAMAGES. ................................       10
    
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW Y O N COUNTY OF NEW YOFX
  • DAVID W. ALLARD, JR, Trustee of
  • SUPPORT OF MOTION FOR SUMMARY JUDGMENT
  • PLAINTIFF LACKS STANDING TO
  • TREBLE DAMAGES CLAIM IS BARPLED
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • DEFENDANTS' REPLY MEMORANDUM IN FURTHER
  • brief,' plaintiff resorts to mischaracterizing the principal cases relied on by AA.'
  • plaintiff presents no New York cases disputing the interpretation of New York law
  • 1997 memorandum in opposition will be cited "Allard Mem."
  • In re The Mediators, Inc., 105 F.3d 822 (2d Cir.
  • It may be noted, however, that when the facts were ventilated before Judge Mukasey, he found
  • PURSUE THE ALLEGED CLAIMS AT BAR
  • not to the guilty corporation."' 105 F.3d at 826 (quoting Wagoner, 944 F.2d at 120 (also
  • While the Second Circuit cited and relied on at least one New York state
  • Unable to dispute that Mediators is the law of New York, Allard resorts to distorting what
  • Barnes v. Hirsch, 215 A.D. 10, affd, 242 N.Y. 555.
  • applying only where a creditors committee5 sues for breach of fiduciary duty,
  • Moreover, in Wagoner, the same rule was applied to bar a trustee from suing
  • Allard repeatedly stresses that Mediators involved a suit by a creditors committee,
  • Of course, Allard did "press" a breach of fiduciary duty claim here, but this Court dismissed

  • 12 . PLF PROP JURY INSTRUCTION

    EXTRACTED KEY WORDS
    INSTRUCTION
    EVIDENCE
    PROFESSIONAL MALPRACTICE
    REQUESTED INSTRUCTION
    YORK
    REASONABLY PRUDENT
    NEGLIGENCE
    CARE
    SOURCE/AUTHORITV
    INJURY
    DMC
    AUDITING RESPONSIBILITIES
    CERTIFIED PUBLIC ACCOUNTANT
    CONTRACT
    PREPONDERANCE
    STANDARD
    JURY INSTRUCTIONS
    YORK PATTERN JURY
    PROXIMATE
    INTERFERE
    ABILITY
    ACCORDANCE
    GAAS
    IRELAND
    UNITED KINGDOM
    DUTIES
    LAW
    TESTIMONY
    CIVIL
    
           SUPREME COURT OF  THE  STATL'  OF NEW YORK
           COUNTY OF NEW YORK
          - _ - - -  - - -  - - - - - - - - -  - - - - - - - - - - -  - X
    
           DAVID W. ALLARD, JR., Trustee of
           De Lorean Motor  Company,
                                                         Plaintiff,               Index No. 601473/97
                                                                                  (Part 11)
                                   -against                                       Justice Gammerman
                                               -
    
           ARTHUR ANDERSEN &  CO -  (U.
                                                     S .A - )  ,
           ARTHUR ANDERSEN &  CO.  (Republic of
           Ireland) and ARTHUR ANDERSEN  &  CO.
           (United Kingdom),
                                                         Defendants.  :
          - - _  -  - - - - -  - - - - - - - - -
                  I                                    - - - - - - - - - - x
    
    
    
    
    
    
    
    
    
                           PLAINTIFF'S REQUESTED INSTRUCTION NO. 1
    b          The Parties Contentions Reqardinq AA's  Conduct A t   Issue
                           I have described your general duties and
           considerations as jurors.  Now, I will set forth some
    a      specific points of law that you  are to use in reaching your
           verdict.
                           In this case,  the  Trustee commenced an action
    a      against defendants Arthur Andersen &  Co.  ( U . S . A . ) ,   Arthur
           Andersen &  Co.  (Republic of Ireland) and Arthur Andersen &
           Co.  (United Kingdom)  (collectively 1IA.Al f)  .  The Trustee
    
    
    
                                   Source/Authority
    
    
    
                        PLAINTIFF'S REQUESTED INSTRUCTION NO.  2
    
                             PreDonderance of the Evidence
                    The Trustee, as plaintiff in this case,  has the
    
    SNIPPETS:
  • SUPREME COURT OF THE STATL' OF NEW YORK COUNTY OF NEW YORK - _ - - - - - - - - - - - - - - -
  • - - _ - - - - - - - - - - - - - - -PLAINTIFF'S REQUESTED INSTRUCTION NO. 1
  • I have described your general duties and considerations as jurors.
  • I will set forth some a specific points of law that you are to use in reaching your verdict.
  • the Trustee commenced an action a against defendants Arthur Andersen & Co. (U.
  • Arthur Andersen & Co. (Republic of Ireland) and Arthur Andersen & Co. (United Kingdom).
  • PreDonderance of the Evidence
  • The Trustee, as plaintiff in this case, has the burden of proving both its breach of contract
  • The credible evidence means the testimony Or exhibits that you consider to be believableA
  • professional malpractice that you must conclude that the
  • Standard Jury Instructions, Civil, Nos.
  • Negligence is a lack of ordinary care.
  • It occurs when one fails to use that degree of care that a reasonably prudent person would
  • Negligence may arise either from engaging i n conduct that a reasonably prudent person would
  • Source/Authoritv
  • New York Pattern Jury Instructions, Civil, No. 2:lO.
  • When I use the words "proximate cause," I am referring to an act or omission that caused an
  • New York Pattern Jury Instructions, C i v i l, No. 2:
  • the negligence of DMC is
  • relevant only to the extent that it interfered with Arthur Andersen's ability to carry out
  • If YOU conclude that DMC did not interfere with Arthur Andersen's ability to carry out its
  • GAAS, you must disregard the actions of DMC entirely.
  • certified public accountant who undertakes to perform duties and responsibilities for a

  • 13 . PLF MEM IN OPP MIN LIMINE

    EXTRACTED KEY WORDS
    BUSHELL
    GUILTY
    MOTION
    TRUSTEE
    MANUALS
    EXH
    GUILTY PLEA
    LOREAN
    PREJUDICE
    BUSHELL DOCUMENTS
    ADMISSIBILITY
    COURT
    PARTICIPATION
    RELATING
    MATERIALS
    YORK
    FRAUD
    PARTNER
    EXHIBIT
    GPD
    MEMORANDUM
    CONVICTION
    LIMINE
    EXCLUDE
    DED ACTION
    GPD CONTRACT
    CONSENT DECREE
    CONTENTION
    SABELLA AFF
    
    
    
                                 TABLE OF CONTENTS
    
    
    
    
    I.  EVIDENCE RELATING TO THE
             BUSHELL GUILTY PLEA IS MATERIAL
             AND aDMISSIBLE ......................................  3
    11.  THERE  IS NO NEED FOR THE COURT TO RULE
       *     ON THE  ADMISSIBILITY OF EVIDENCE THAT THE
             TRUSTEE HAS  NOT  INDICATED HE EXPECTS TO USE . . . . . . . . .  8
    
    
    
    SUPREME COURT OF THE  STATE OF NEW YORK
    COUNTY OF NEW YORK
    
    
    DAVID W. ALLARD, JR., Trustee of
    De Lorean Motor Company,
                                     Plaintiff,         Index No  97/601473
    
                    - against
                            -                           IAS Part 11
    
    ARTHUR  ANDERSEN &  CO.  (U.
                                  S .A.
                                      )  ,              Justice Friedman
    ARTHUR ANDERSEN &  CO.  (Republic of
    Ireland) and ARTHUR ANDERSEN &  CO.
    (United Kingdom),
                                     Defendants + :
    
    
    
                    PLAINTIFF'S mORANDm  OF LAW
                     IN OPPOSITION TO DEFENDANT'S
                MOTION IN LIMINE TO EXCLUDE EVIDENCE
    
                              INTRODUCTION
    
    
    
    Lorean Motor Company  ( llDMC")  and its affiliates, AA claims
    that Bushellls guilty plea to a charge of fraud committed
    against DMC and its affiliates is too prejudicial to be
    
    SNIPPETS:
  • THERE IS NO NEED FOR THE COURT TO RULE * ON THE ADMISSIBILITY OF EVIDENCE THAT THE
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • IN OPPOSITION TO DEFENDANT'S MOTION IN LIMINE TO EXCLUDE EVIDENCE
  • Lorean Motor Company and its affiliates, AA claims that Bushellls guilty plea to a charge of
  • While the excerpts from the briefs filed in the action involving the Department of Economic
  • The Trustee reserves his right to rebut contentions relating to hearsay,
  • EVIDENCE RELATING TO THE BUSHELL GUILTY PLEA IS MATERIAL AN0 ADMISSIBLE
  • Pursuant to the GPD contract, the $17.6 million paid up f r o n t, that was supposed to be
  • While AA's approach to trial preparation makes it impossible to ascertain exactly how AA will
  • Exh.
  • Nevertheless, a U.K. attorney was retained by AA and identified a number of potential
  • In the face of the obvious relevance of such highly probative material, AA's reliance on a
  • 1977), the decision related to the use of a conviction on a motion for summary judgment, not
  • County of Nassau, 190 A.D.2d 664, 665, 593 N.Y.S.2d 2 8 7, 288 ('Ithe value of this evidence
  • The Trustee would accept a properly-worded instruction explaining to the jury that the
  • Since the Trustee did not include any settlement agreements with anyone on his exhibit list,
  • Even more mystifying is AA's argument that references to its audit manuals are unduly
  • AA's I'evidencell on this motion does not support its contention that reference to the
  • S e e, e.g., Sabella Aff.
  • Finally, AA seeks an order precluding the Trustee from making reference to a consent decree

  • 14 . STATEMENT

    EXTRACTED KEY WORDS
    PLEA
    DEFENDANTS
    PLAINTIFF
    EVIDENCE
    GUILTY PLEA
    BUSHELL
    FACTS
    MOTION
    THIRD PARTIES
    JUNCTURE
    SEEKING
    PERMIT
    HEARSAY
    PREMATURE
    MATTER
    IMPLICATES
    GUILT
    PARTICIPATION
    PROSECUTING
    ADMISSIBILITY
    RES JUDICATA
    COLLATERAL ESTOPPEL
    FERNANDEZ
    CIGNA PROPERTY
    CAS
    AD2D
    REFER
    NUMEROUS AUTHORITIES
    SCOPE
    
                                           Plaintiff,
                                                                             Index No. 601473/97
                          - against -                                        SEQ. NO. 002
    
    ARTHUR  ANDERSEN  &  CO.  (USA),  ARTHUR
    ANDERSEN  &  CO.  (Republic  of  Ireland),  ARTHUR
    ANDERSEN & CO. (United Kingdom),
    
    
    
    LEWIS R. FRIEDMAN, Justice
    
              Defendants move for an in limine  order precluding plaintiff from offering certain
    material in evidence at the upcoming trial of this case.
    
               Plaintiffs response has been that  at this juncture  it  is premature to pass  on the
    points raised since it may well be that the evidence defendants challenge in this motion will
    not be  introduced at the trial.  Plaintiff notes that the settlement of the  Trustee with third
    parties, defendants' audit manuals, and the consent decree of one of defendants' partners with
    the SEC are not even on the list of potential trial exhibits that plaintiff seeks to offer.  Under
    those circumstances the court finds that resolution of the issues raised by the motion would
    be premature and purely hypothetical at this juncture.
    
               The only matter that defendants address in this motion that implicates matter that
    plaintiff states it will introduce concerns the guilty plea of Bushell to conspiracy to defraud
    DMCL.  Plaintiff contends that he  is not  seeking to use the plea  "to prove AA's  guilt or
    participation with Bushell, but is seeking to introduce the Bushell plea as evidence that there
    was a fraud perpetrated through the GPD contract" (memo. p. 5).  Defendants note that the
    documents plaintiff is apparently seeking to  introduce contain extensive statements by  the
    prosecuting attorney and the  court  concerning the  facts which were  developed during the
    criminal investigation and are beyond the evidence which will be offered at this trial.  The
    
    
    
                              ALLAE2D v. ARTHUR ANDERSEN & CO.
                                    Index No. 601473/97         Page - 2
    
    
    court is aware that it appears that there are bases for the introduction of guilty pleas by third
    parties in unusual cases to help establish facts at issue during the case at bar, even though the
    plea  would  not  by  binding  under  the  rules  of  res  judicata  or  collateral  estoppel  (see,
    Fernandez  v  Cigna Property  h Cas. Ins.  Co.,  188 AD2d 700, 703).  There is no  need to
    refer  to  the  numerous  authorities for  the  proposition  that  guilty  pleas  are  generally 
    admissible to show merely the guilt or participation of third parties.
    
               The court is not willing at this juncture to pass on the question of the admissibility
    of the Bushel1 plea, the statement that he was guilty or the scope of the documentation of the
    plea  that  would  be  permitted.  The  development  of  the  facts  at  the  trial  will  determine
    whether  the  fact  that  Bushell  was  convicted  or  his  statements,  either  in  open  court  or
    
    SNIPPETS:
  • Plaintiffs response has been that at this juncture it is premature to pass on the points
  • Plaintiff notes that the settlement of the Trustee with third parties, defendants' audit
  • Under those circumstances the court finds that resolution of the issues raised by the motion
  • The only matter that defendants address in this motion that implicates matter that plaintiff
  • Plaintiff contends that he is not seeking to use the plea "to prove AA's guilt or
  • Defendants note that the documents plaintiff is apparently seeking to introduce contain
  • court is aware that it appears that there are bases for the introduction of guilty pleas by
  • Co., 188 AD2d 700, 703).
  • There is no need to refer to the numerous authorities for the proposition that guilty pleas
  • The court is not willing at this juncture to pass on the question of the admissibility of the
  • The court notes that there is little likelihood that the court will, in any event, permit the

  • 15 . DEF MEM IN LIMINE IRR,MIS

    EXTRACTED KEY WORDS
    DELOREAN
    EVIDENCE
    CARS
    GPD
    AUDIT
    EXCLUDE
    MOTION
    MEMORANDUM
    DIRECTORS
    REFERENCE
    CONTRACT
    DMCL
    DMC-12
    ENGINEERING
    DRLP
    PAYMENTS
    YORK
    IRELAND
    UNITED KINGDOM
    ALLEGED DEPARTURES
    DEFENDANTS
    SUPPORT
    SABELLA
    EVIDENCE RELATING
    LOTUS
    DELOREAN MOTOR COMPANY
    COUNSEL
    JURY
    REFERS
    
                  SUPREME  COURT OF THE STATE OF NEW YORK
    I             COUNTY OF NEW YORK
          F       DAVID W. ALLARD, JR,  Trustee of
                  DeLorean Motor Company,                              Index No. 601473/97
                                                     Plaintiff,
                                                                       IASPart  11
          Io                           -against-                       Justice Friedman
                  ARTHUR ANDERSEN & CO. (U.S.A.),
                  ARTHUR ANDERSEN & CO. (Republic of Ireland)
                  ARTHUR ANDERSEN & CO. (United Kingdom),
          c                                          Defendants.
    
                                      DEFENDANTS'  MEMORANDUM IN SUPPORT  OF
                                   MOTION  LIMINE TO EXCLUDE EVIDENCE THAT IS
                                  IRRELEVANT,  MISLEADING  AND UNDULY PREJUDICIAL
    
    
    
          @
    
    
          e
    
    
          Y
    
    
                                                                     BROWN & WOOD LLP
           I)     Of Counsel:                                        Attorneys for Defendants
                                                                     One World  Trade Center
                         James D. Zirin                              New York,  New York  10048
                         James  J.  Sabella                          (212) 839-5300
    
           Q
    
    
    
          -0
    
    
    
                                                           Table of Contents
    
    
    STATEMENT OF FACTS
    
    ARGUMENT
    
    I.        THE COURT SHOULD EXCLUDE EVIDENCE AS TO
    
    SNIPPETS:
  • ITS INTERNAL, AUDIT GUIDELINES
  • THE COURT SHOULD EXCLUDE EVIDENCE OF AN SEC CONSENT DECREE WITH AN ANDERSEN PARTNER
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • ARTHUR ANDERSEN & CO. (Republic of Ireland) ARTHUR ANDERSEN & CO. (United Kingdom),
  • DEFENDANTS' MEMORANDUM IN SUPPORT OF
  • the accompanying Affidavit of James J. Sabella, sworn to November 24, 1997,
  • in support of their motion in limine to exclude at the trial of this action certain evidence
  • concerns an audit subsequent and unrelated to the DeLorean audits.
  • Evidence relating to a guilty plea entered by Frederick Bushell,
  • respectfdly requested that the Court direct that plaintiffs counsel notify counsel and the
  • the Court can consider excluding the reference at that time.
  • in his opening statement to the alleged departures from AA's manuals or the Bushell
  • Motor Cars Limited, a subsidiary of DeLorean Motor Company, in order to
  • settlements are set forth in AA's May 12, 1997 memorandum in support of its motion in the
  • As these are highly prejudicial matters, presumably the Court meant that they would be dealt
  • To avoid unnecessary repetition, AA respectfully refers to the aforementioned portions of its
  • enable the manufacture in Northern Ireland of a new automobile, the DMC-12.
  • HMG acquired the right to nominee two directors to the boards of DMC and DMCL.
  • To bring the car to launch, substantial research and development and product engineering
  • At the heart of the case is a contract among DMCL,
  • whereby GPD agreed to provide certain research and development for the DeLorean
  • up-front payment to GPD of $5,150,000; and DRLP was to make certain other unquantified
  • additional payments for salaries and materials.
  • of Lotus, a well-known English manufacturer of sports cars.

  • 16 . DEF REPLY MEM IN LIMINE

    EXTRACTED KEY WORDS
    MANUALS
    MOTION
    COURT
    SETTLEMENTS
    PLAINTIFF
    MEM
    LIMINE
    REFER
    JURY
    EXCLUDE
    CONSENT DECREE
    ASSERTS
    STANDARDS
    SUPPORT
    PREJUDICE
    REFERENCE
    SABELLA
    SABELLA AFF
    EXH
    BUSHELL CONVICTION
    DEFENDANTS
    MEMORANDUM
    AUTHORITIES
    MOVING
    PROPOSITIONS
    LAW
    CONTRADICTION
    EXPLICIT
    DENY
    
    SUPREME COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
                                                ,       .
    
    
    
    DAVID W. ALLARJI, JR,  Trustee of
    DeLorean Motor Company,                                             Index No. 601473/97
                                         Plaintiff,
                                                                        IAS Part 1 1
                           -against-
                                                                        Justice Friedman
    ARTHUR ANDERSEN & CO. (U.S.A.),
    ARTHUR ANDERSEN & CO. (Republic of Ireland)
    ARTHUR ANDERSEN & CO. (United Kingdom),
    
                                         Defendants.
    
    
                    DEFENDANTS'  REPLY  MEMORANDUM  IN SUPPORT  OF
                    MOTION  IN LIMINE  TO EXCLUDE  EVIDENCE  THAT IS
                  IRRELEVANT, MISLEADING  AND UNDULY P'RIEJUDICIAL
    
           The authorities cited in AA's moving brief'  establish that the Schoemer consent decree
    
    and alleged vio1,ations of AA's audit manuals are plainly inadmissible, highly prejudicial, and
    
    appropriate for exclusion on motion in limine.  Plaintiff Allard's brief does not even purport to
    
    discuss any of the authorities relied on by AA for any of these points.  Not one.  These
    
    propositions are essentially conceded by Allard.
    
           Instead, the essence of Allard's opposition to this motion is that it is premature.  He
    
    asserts, for example, that he may not refer at trial to AA's manuals or the Schoemer consent
    
    decree, and that AA should wait until he does before objecting.  With all due respect, that is a
    
    frivolous position.  Allard ignores that when dealing with prejudicial matter, the law is well-
    
    
    
    
    1       Defendants' Memorandum in Support  of Motion in Limine, dated Nov. 26, 1997 ("AA Mem.").
    
    
    
                 settled that it is appropriate to move in advance of trial, because once the
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • MOTION IN LIMINE TO EXCLUDE EVIDENCE THAT IS
  • The authorities cited in AA's moving brief' establish that the Schoemer consent decree
  • asserts, for example, that he may not refer at trial to AA's manuals or the Schoemer consent
  • Allard ignores that when dealing with prejudicial matter, the law is well1 Defendants'
  • while Allard asserts that he ''has not indicated he expects to use" the manuals
  • Allard does not deny that his counsel may well refer to these matters in his
  • The cases set forth in AA's moving brief, establish, without any contradiction by Allard,
  • reference to such alleged breaches should be excluded on motion in limine.
  • Plaintiffs Memorandum of Law in Opposition to Defendant's Motion in Limine to Exclude
  • Jan. 25, 19X9);3 AA Mem.
  • Unable to refute any of such settled propositions of law,
  • Plaintiff does not deny and appears to concede that if the manuals set forth requirements
  • above prevailing professional standards, the manuals would be irrelevant and inadmissible.
  • A copy of this decision is Exhibit 13 to the Affidavit of James J. Sabella, sworn to November
  • confuse the jury and prejudice AA.
  • jury, whether the consent decree is on his exhibit list or not.
  • he will not refer to it, and his explicit reservation of his alleged right to do so, his
  • that such settlements were made.
  • Exh.
  • Allard claims that AA made arguments with respect to the Bushell conviction in its DED
  • p. 2 n.1) and attached the relevant pages as Sabella Aff.

  • 17 . ANSWER

    EXTRACTED KEY WORDS
    ALLEGATIONS
    INFORMATION SUFFICIENT
    DENY
    DMC
    TRUTH
    ADMIT
    GPD
    ALLEGE
    GPD CONTRACT
    RESPONSE
    DELOREAN
    DMCL
    DEFENDANTS
    ENGAGEMENT
    MONEY
    PAID
    AUDIT REPORTS
    REPEAT
    REALLEGE
    YORK
    ALLARD
    PLAINTIFF
    DRLP
    REFER
    JOHN
    DIRECTORS
    PAYMENTS
    SUPP
    JUDGE MUKASEY
    
    SUPREME COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
    
    DAVID W. ALLARD, JR., Trustee of                        1
    DeLorean Motor Company,
    
                                          Plaintiff,        )      Index No. 601473/97
    
                            -against-                       )  IASPart11
                                                            1
    ARTHUR ANDERSEN & CO. (U.S.A.),                         )  Justice Friedman
    ARTHUR ANDERSEN & CO. (Republic of                                                                 
                                                                            h...  -,
    Ireland) and ARTHUR ANDERSEN & CO.
    (United Kingdom),
    
                                          Defendants.       )
                                                            'r                           SEP  2 6  1997
    
    
                   Defendants Arthur Andersen & Co. (U.S.A.) (now knovin a$ Arthur Andersen            
    
    
    LLP), Arthur Andersen & Co. (Republic of Ireland), and Arthur Andersen & Co. (United
    
    Kingdom), by their attorneys, Brown & Wood  LLP, as and for their answer to the Complaint
    
    dated March 20,1997:
    
                    1 *     Are without knowledge or information sufficient to form a belief as to the
    
    truth of the allegations of Paragraph 1, except admit that the action by David W. Allard, Trustee
    
    of the DeLorean Motor Company, in the United States District Court for the Southern District of
    
    New York, 84 Civ. 7703 (MBM), was dismissed in February, 1997; admit that plaintiff purports
    
    to rely on CPLR 205(a); and allege that some or all causes of action asserted herein fall outside
    
    the scope of said statute.
    
                    2.      Deny the allegations of Paragraph 2, except admit that Arthur Andersen &
    
    CO. (U.S.A.) was a partnership which at all relevant times was engaged in the practice and
    
    
    
                 *  Q..
                    -.?
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • DeLorean Motor Company,
  • * Are without knowledge or information sufficient to form a belief as to the
  • truth of the allegations of Paragraph 1, except admit that the action by David W. Allard,
  • 7703, was dismissed in February, 1997; admit that plaintiff purports
  • and allege that some or all causes of action asserted herein fall outside
  • Deny the allegations of Paragraph 2, except admit that Arthur Andersen &
  • the Board of Directors and chief executive officer of DMC.
  • November 1, 1978, the GPD contract was entered into among GPD, DMCL and DRLP and that
  • said contract was executed by John DeLorean and Marie-Denise Juhan and refer to said contract
  • deny that DMC was a party to the GPD contract and that DMC made any
  • Judge Mukasey held that plaintiff has no cause of action for money paid
  • under the GPD contract because it was DRLP and not DMC that paid the money to GPD.
  • truth of the allegations of Paragraph 1 1, except admit on information and belief that DMCL
  • a series of payments to GPD and Lotus totalling approximately $22 million;
  • I (U.S.A1,924 F. Supp.
  • related entities for certain periods from 1976 to 1982 and refer to defendants' audit reports
  • In response to Paragraph 20, repeat and reallege their responses to
  • In response to Paragraph 2 1, refer to the engagement letters covering

  • 18 . PRE ARGUEMENT SYATEMENT

    EXTRACTED KEY WORDS
    COURT
    YORK
    DISCOVERY
    PLAINTIFF
    JUSTICE FRIEDMAN
    IRELAND
    UNITED KINGDOM
    STATUTE
    LIMITATIONS
    DISMISS
    CPLR
    AMENDMENTS
    DOCTRINE
    SUPREME COURT
    DAVID
    ALLARD
    TRUSTEE
    DELOREAN MOTOR
    INDEX
    PARTIES
    AUDITORS
    DAMAGES
    BASIS
    MOTION
    ABUSE
    DELAYS
    BLAME DEFENDANTS
    REMEDY
    RUSH
    
    SUPREME COURT OF THE STATE OF NEW YORK
    APPELLATE DIVISION:  FIRST DEPARTMENT
    
    DAVID W. ALLARD, JR.,  Trustee of                                 Index No. 601473/97
    DeLorean Motor Company,                                           in the court below
    
                           Plaintiff-Respondent,
           - against -                                                PRE -ARGUMENT STATEMENT
    
    ARTHUR ANDERSEN & CO. (U.S.A.),
    ARTHUR ANDERSEN & CO. (Republic
    of Ireland) and ARTHUR ANDERSEN
    & CO. (United Kingdom),
    
                           Defendants-Appellants.
    
    
           Defendants-Appellants Arthur Andersen & Co. (U.S.A.), Arthur Andersen & Co.
    
    (Republic of Ireland), and Arthur Andersen & Co. (United Kingdom) ("defendants" or AA")
    
    respectfully submit this Pre-Argument Statement in support of their appeal from the order of the
    
    Supreme Court of the State of New York, New York County (Friedman, J.), entered September
    
    18, 1997.
    
           1.      The title of the action is David W. Allard, Jr., Trustee of DeLorean Motor
    
    company, Plaintiff v. Arthur Andersen & Co. (U.S.A.), Arthur Andersen & Co. (Republic of
    
    Ireland), and Arthur Andersen & Co. (United Kingdom), Defendants, Index No. 601473/97.
    
           2.      The full names of the  original parties  to the action are:
    
           Plaintiff:      David W. Allard, Jr.
    
           Defendants:  Arthur Andersen & Co. (U.S.A.)
                           Arthur Andersen & Co. (Republic of Ireland)
                           Arthur Andersen & Co. (United Kingdom)
    
                    There have been no changes in the names of the parties.
    
    
    
            3.         The name, address and telephone number of counsel for appellant are:
    
                       BROWN & WOOD LLP
                       One World Trade Center
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION:
  • ARTHUR ANDERSEN & CO. (Republic of Ireland) and ARTHUR ANDERSEN & CO. (United Kingdom),
  • The title of the action is David W. Allard, Jr., Trustee of DeLorean Motor
  • Ireland), and Arthur Andersen & Co., Defendants, Index No. 601473/97.
  • Plaintiff: David W. Allard, Jr.
  • There have been no changes in the names of the parties.
  • brought by the trustee in bankruptcy of DeLorean Motor Company against the former auditors of
  • years plus trebling under a Michigan statute plus $50,000,000 in punitive damages.
  • a cause of action and on the basis of the statute of limitations.
  • it was a clear abuse of discretion for Justice Friedman to deny defendants
  • the right to take any discovery.
  • court below appeared to blame defendants for the fact that the federal action had consumed 12
  • years and took the view that the way to remedy such delays is to rush the case to trial
  • Second, the case presents the question of whether the 1996 amendments to CPLR 9 214, which
  • the case presents the question of whether the doctrine of "continuous
  • defendants' motion to dismiss on grounds of forum

  • 19 . ZIRIN AFF VACATE

    EXTRACTED KEY WORDS
    DEFENDANTS
    YORK
    DMCL
    ALLARD
    PLAINTIFF
    DEPOSITION
    ENGAGEMENT LETTER
    DISCOVERY
    COURT
    COUNTY
    IRELAND
    UNITED KINGDOM
    SWORN
    DEPOSES
    AFFIDAVIT
    MOTION
    MATERIALS
    CIV
    COMPLAINT
    SECOND AMENDED COMPLAINT
    NOTWITHSTANDING
    BAR
    OBTAINING DISCOVERY
    DEEPENING INSOLVENCY
    DAMAGES
    FORMER OFFICERS
    EMPLOYEES
    CONTEMPLATING
    JOHN DELOREAN
    
    --  ?  4.
    
    
    
    
    
    SUPREME COURT OF THE STATE OF NEW YORK
    COUNTY OF NEW YORK
    
    DAVID W. ALLARD, JR., Trustee of
    DeLorean Motor Company,                              Index No. 601473/97
                                Plaintiff,               AFFIDAVIT OF JAMES D.
                  -  against -                           ZIRIN IN SUPPORT OF
                                                        MOTION TO DISMISS
    ARTHUR ANDERSEN &  CO .  ( V S .A. ,                 AND  TO VACATE NOTE
                                             I
    ARTHUR  ANDERSEN &  CO.  (Republic                   OF ISSUE
    of Ireland) and ARTHUR ANDERSEN
    &  CO.  (United Kingdom)
                                       ,
                                Defendants.
    
    
    
     STATE OF NEW YORK ) )  ss.:
    COUNTY OF NEW YORK)
    
                       JAMES D. ZIRIN, being duly sworn, deposes and says:
    
                       1.       1 am a member of Brown &  Wood LLP, attorneys for
     defendants Arthur Andersen &  Co.  (U.S.A.), Arthur Andersen &  Co.
     (Republic of Ireland), and Arthur Andersen &  Co.  (United
     Kingdom),  I make this affidavit in support of defendants' motion
    
     to dismiss and to vacate the note of issue filed by plaintiff.
                       2 .      The principal purpose of this affidavit is to
     place before the Court  the factual material on which defendants'
     motion is based.  Because these documents are voluminous, rather
     than annex them hereto they have been bound and submitted
     separately.
    
    
    
              3.  The  materials contained in the exhibit volumes are
    as follows:
    
              Exh.  1:  Excerpts from the deposition of M.. Thatcher
              Exh. 2 :       DMCL audited financial statements, Nov. 3 0 ,
                             1979
    
    SNIPPETS:
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • of Ireland) and ARTHUR ANDERSEN & CO. (United Kingdom)
  • JAMES D. ZIRIN, being duly sworn, deposes and says:
  • 1 am a member of Brown & Wood LLP, attorneys for defendants Arthur Andersen & Co., Arthur
  • to dismiss and to vacate the note of issue filed by plaintiff.
  • The principal purpose of this affidavit is to place before the Court the factual material on
  • The materials contained in the exhibit volumes are as follows:
  • Excerpts from the deposition of M..
  • Thatcher Exh.
  • DMCL audited financial statements, Nov. 3 0,
  • Engagement letter from Arthur Andersen & Co.
  • set of interrogatories in Allard v. Arthur
  • The second amended complaint in Allard v.
  • Arthur Andersen & Co., 84 Civ.
  • Notwithstanding the discovery that was taken in
  • there remains discovery to take in the action at bar.
  • This includes obtaining discovery from plaintiff as to
  • DMC's alleged "deepening insolvency" damages, which plaintiff refused to provide in the
  • Defendants are also contemplating taking the
  • deposition of John DeLorean, who was not deposed in t h e federal
  • Sworn to before me this

  • 20 . STATEMENT

    EXTRACTED KEY WORDS
    TRUSTEE
    SDNY
    STATUTE
    SUPP
    REPORTS
    LIMITATIONS
    COMPANION
    ECONOMIC DEVEL
    DMC
    AUDIT
    CONTINUATION
    COMPLAINT
    CPLR
    PAPERS
    AUDITOR
    ACCOUNTANT
    DISMISSING
    MOTION
    BREACH
    FIDUCIARY DUTY
    ALLARD
    BANKRUPTCY
    CONTENDS
    RELIEF
    CONTRACT
    AUTHORITY
    CONTINUOUS REPRESENTATION DOCTRINE
    JUSTICE
    AD2D
    
    is but the continuation of an extensive litigation in the United States District Court for the
    Southern District of New York.  The claims were first asserted in the federal proceeding in
    October  1984.  After  twelve years of litigation the federal court ultimately dismissed this
    action in February  1997 finding an absence of federal jurisdiction.  There is a companion
    case,  Department  of  Economic  Development  v  Arthur  Andersen  &  Co.,  Index  No.
    601474/97, also pending before this court.
    
                In this motion the Arthur Andersen defendants (collectively "AA")
                                                                                                       
    the  fust,  second and  fifth causes of  action in the  complaint on the  grounds that  they  are
    barred by the statute of limitations' and that the breach of fiduciary duty  cause of action is
    
    
    
    I The  court  notes  that  the  substance  of  AA's  arguments were  reserved  for  its  reply 
     discussion of the relevant statute of limitations and the 1996 amendment to CPLR 214[6] is
     than 2 pages of the moving memorandum and consumes nearly  19 pages  of the reply.  This procedure
     "playing fast and  loose" with the court's  reasonable procedures.  The court is also concerned
     raises  an issue of the application of the statute of limitations under Michigan law.  AA  admits
     was not addressed at all in  its moving papers (reply memo. p. 32, n.21).  The court will not
     on which the Trustee was intentionally deprived of his right to respond.  The court is not
     apparent threat that the issue would have to be considered in the future inter  alia  on a motion
     on the pleadings."  There is no such procedure under the CPLR. The Trustee  and HMG have described
     position on the future course of the litigation to be that AA  would prefer any procedure that
     trial of this or the companion case,  at least in this  court.  The court's reading  of the papers
    
                Footnote continued
    
    
    
    e                                    ALLARD v. ARTHUR ANDERSEN & CO.
                                                Index No. 601473197               Page - 2
    
          legally insufficient.  In addition AA moves to strike the Note of Issue, which is allegedly
          premature.  The motion does not address or effect the remaining causes of action.
    
                      This and the companion case are outgrowths of the failure of the DeLorean Motor
          Company  (,,DMC").  In  this  case  plaintiff,  the  Trustee  in -bankruptcy  of  DMC  (the
          "Trustee"), seeks damages from AA which had acted as auditors of DMC.  In the companion
          case the plaintiff,  a  branch  of  the  Government of the  United  Kingdom  (for  convenience
          referred to as "HMG"), which was a major investor in DMC, brings similar claims.  After the
          completion of discovery in the federal action the court granted summary judgment dismissing
          the  federal causes of  action but  denied  the  motion  on the  Trustee's common law  claims
          (Allard  v  Arthur  Andersen  &  Co.,  924  F  Supp  488,  495-6  [SDNY  19961).  The  facts
          underpinning this case are set forth at length in that decision, and the many reported
          in the companion case. (Department of Economic Devel v Arthur Andersen  & Co.,  924 F
          Supp 449 [SDNY 19961; Allard v Arthur Andersen  & Co., 924 F Supp  488 [SDNY 19961;
          Department  of Economic Devel v Arthur Andersen  & Co.,  683 F Supp 449 [SDNY 19881;
          Department  of Economic Devel v Arthur Andersen  & Co.,  747 F Supp 922 [SDNY 19901;
    
    SNIPPETS:
  • is but the continuation of an extensive litigation in the United States District Court for
  • After twelve years of litigation the federal court ultimately dismissed this action in
  • The discussion of the relevant statute of limitations and the 1996 amendment to CPLR 214is
  • AA admits that the issue was not addressed at all in its moving papers (reply memo.
  • The court is not intimidated by AA's apparent threat that the issue would have to be
  • The Trustee and HMG have described A A ' s position on the future course of the litigation to
  • In this case plaintiff, the Trustee in -bankruptcy of DMC, seeks damages from AA which had
  • After the completion of discovery in the federal action the court granted summary judgment
  • The federal court found sufficient the claims on a "deepening insolvency'' theory, that AA's
  • There is no doubt that the filing of a bankruptcy petition tolls the relevant statute of
  • The filing of the petition is an "order for relief'.
  • AA contends that the applicable statute of limitations for the Trustee's contract and
  • The Trustee asserts that the continuous representation doctrine prevented any of the claims
  • An extensive, thoughtful analysis of the subject has been written by Justice Gammerman in
  • The court need not repeat what Justice Gammerman has said but notes that his decision is
  • v Steiner & Modore, 147 AD2d 225,228 [3d Dept. 19891).
  • A4 contends that the complaint fails to state a cause of action for breach of fiduciary duty
  • Generally the cases have emphasized the notion that the auditor is to be "independent" of the

  • 21 . MEM IN OPP TO VACATE NOI

    EXTRACTED KEY WORDS
    MOTION
    BREACH
    DISMISS
    FIDUCIARY DUTY
    LITIGATION
    ALLARD
    MOTOR
    TRUSTEE
    DEFENDANT
    COMPLAINT
    UNITED KINGDOM
    MEMORANDUM
    POSTPONE
    FRAUD
    DISCOVERY
    FEDERAL ACTION
    CONTRACT
    MALPRACTICE
    LIABILITY
    MCKENZIE
    STATUTES
    LAW
    COURT
    YORK
    DAVID
    LOREAN MOTOR COMPANY
    IRELAND
    OPPOSITION
    VACATE
    
                                       TABLE OF CONTENTS
    
                                                                                            Pase
    TABLE OF AUTHORITIES. . *. * . *   . . . . . . . .  . . . .          . . . . . . . . . . .   ii
    PRELIMINARY STATEMENT ..................................                                    2
    
    BACKGROUND .............................................                                    3
           A.  AA's Fraudulent Misconduct . . . . . . . . . . . . . . . . . . .   3
           B.  The Summary Judgment Motion In The
                           Federal Action .............................                         4
    
    ARGUMENT I                AA'S MOTION TO DISMISS THE TRUSTEE'S
                    f            BREACH OF CONTRACT, MALPRACTICE
                                 AND BREACH OF FIDUCIARY DUTY
                                 CLAIMS IS MERITLESS . . . . . . . . . . . . . . . . . . .   6
           A.  The Trustee's Breach Of Contract And
                           Malpractice Claims Are Timely . . . . . . . . . . . . . .   6
           B .      The Trustee's Breach Of Fiduciary Duty
                           Claim Should Not Be Dismissed . . . . . . . . . . . . . .   10
                    1.  The Breach Of Fiduciary Duty Claim
                                 Is Part O f   The Same Transaction Or
                                 Occurrence As The Claims In The
                                 Federal Action ........................                      11
                    2 .        Accountants Like AA Owe A Fiduciary
                                 Duty To Their Clients . . . . . . . . . . . . . . . . .   13
    ARGUMENT 11.  THE TRUSTEE'S NOTE OF ISSUE WAS
                                 APPROPRIATELY FILED, AND THE COURT
                                 SHOULD IMMEDIATELY SCHEDULE A
                                 TRIAL IN THIS TWELVE-YEAR-OLD
                                 LITIGATION ............................                      .14
    
    
    
    
    
    
    
    
    
    
    
                                                   i
    
    
    
                                        TABLE OF AUTHORITIES
    
    
    
    
    SNIPPETS:
  • Federal Action
  • The Trustee's Breach Of Fiduciary Duty
  • Allard v. Arthur Anderson & Co.,
  • Allard v. Arthur Anderson & Co.,
  • 13-14 McKenzie v. McKenzie, 78 A.D.2d 585 (4th
  • Van Dussen-Storto Motor Inn v. Rochester Telephone C o r g.
  • Statutes
  • SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK
  • MEMORANDUM OF LAW IN OPPOSITION
  • TO MOTION TO DISMISS AND TO VACaTE NOTE OF ISSUE
  • In an effort to postpone a trial after twelve years of litigation, defendant has filed a
  • Plaintiff, David W. Allard, Jr., trustee in bankruptcy of De Lorean Motor Company
  • The complai