“Bankruptcy Trustee Moves for Debevoise Disqualification in Delaware” —

• “The liquidating trustee in a bankruptcy case has moved to disqualify Debevoise & Plimpton attorneys from representing a private equity firm, claiming the law firm previously worked on the other side of the deal that spurred the bankruptcy.”
• “Debevoise represents Clayton Dubilier & Rice, which personal care wholesaler High Ridge Brands claims pushed its investors to purchase $250 million in High Ridge bonds despite knowing the now-bankrupt company was headed downhill.”
• “Alan Halperin, the liquidation trustee for High Ridge who is represented by Grant & Eisenhofer’s Gordon Novod, moved Sept. 30 to disqualify Debevoise, alleging at least nine Debevoise attorneys worked with High Ridge on the same 2017 transaction that ultimately resulted in the suit that now alleges fraud, fraudulent transfer, violation of multiple securities laws and a breach of fiduciary duty.”
• “Having represented both sides in the case filed under seal in December 2021, Halperin argued, keeping Debevoise on the winddown in Delaware bankruptcy court presents a clear conflict of interest. Halperin is asking U.S. Bankruptcy Judge Brendan L. Shannon to bar Debevoise from further representing Clayton Dubilier or switching to represent the other side.”

“Opioid MDL’s Verdict Watchdog Deserves DQ, Pharmacies Say” —

• “The watchdog overseeing implementation of a verdict against CVS Pharmacy, Walgreens and Walmart in multidistrict opioid litigation has a conflict of interest because he’s already a special master tasked with impartial dispute resolution in the MDL, the drugstore chains said on Wednesday.”
• “According to the motion, [Special Master] Cohen’s role as administrator will give him ‘broad access’ to the companies’ files, employees and internal systems. That sort of access “is inappropriate for a special master to have — especially one like special master Cohen” who “works hand in hand” with Judge Polster and decides important matters involving discovery, jury instructions and motions for summary judgment, the motion asserts.”
• “‘Most fundamentally, those with personal knowledge of matters in a case are disqualified from being neutral judicial arbiters,’ the nation’s three largest pharmacy businesses argue Wednesday, citing the official Code of Conduct for United States Judges.”
• “Whereas a special master is expected to be ‘a neutral adjunct’ who assists Judge Polster in an evenhanded manner, an administrator is obligated to enforce Judge Polster’s verdict benefiting Lake and Trumbull counties in northeastern Ohio, and Cohen’s role as administrator ‘cannot be reconciled with his role as special master,’ the motion states.”
• “CVS, Walgreens and Walmart Inc. characterize the purported conflict of interest as a form of irreparable harm, which is one of several factors Judge Polster would weigh when considering whether to stay the appointment. The administrator’s oversight powers implicate another type of harm because they will allow ‘intrusive and sweeping access to highly sensitive and private patient health information,’ the pharmacies say.”
• “After a jury last year found the pharmacies liable for an oversupply of opioid painkillers, Judge Polster held a bench trial to determine remedies. He ultimately issued a verdict that ordered the pharmacies to pay $650 million and adopt various business practices aimed at ensuring safe sales of controlled substances.”