BY MARK HARRINGTON |
mark.harrington@newsday.com
8:26 AM EDT, August 21, 2007
The battle between CA Inc. and former chairman
Charles Wang has intensified, as the company asked a federal judge to
"clarify or amend" his recent decision rejecting claims by Texas tycoon
Sam Wyly so CA itself could pursue its founder's fortune.
A filing last week by lawyers for a special litigation committee of CA's
board notes the company has already hired lawyers, "made substantial
efforts preparing to proceed against Mr. Wang and others," and advised the
court it is "eager to prosecute the claims" related to the company's
$2.2-billion accounting scandal. CA previously has said it seeks $500
million from Wang.
CA's filing surprised lawyers for Wyly, a dissident shareholder who had
written to the CA board's special litigation committee just days before,
asking that they approach Judge Thomas Platt together to pursue the claims
after Platt had testily dismissed them the week before.
In the CA filing on Thursday, lawyers for CA's committee asked Platt to
reassert the rejection of Wyly's requests and to make a clarification or
amendment that a statute of limitations restriction would not sink CA's
attempt to pursue Wang and others.
CA's lawyers have asserted that Wang and former chief financial officer
Peter Schwartz "actively concealed from CA and its board of directors the
wrongdoing and their personal involvement." Both men were improperly
enriched as a result of the scam, CA claimed.
CA's filing seeks a selective opening of a 2003 shareholder settlement
agreement that shields current and past CA executives and directors from
being sued in connection with the accounting scandal. The carve-out would
allow it to pursue Wang, Schwartz and others.
Wyly, whose suits name more than a dozen current and former executives and
directors, wants to negate all the releases to investigate and pursue a
larger sphere of possible wrongdoers, including board members. "Evidence
is abundant that the releases were obtained improperly and fraudulently,"
Wyly lawyer William Brewer said yesterday.
Wang, in a rare statement on the scandal in April, called the CA board's
claims against him "fallacious" and suggested they were based on the
testimony of convicted felons. A spokesman for Wang yesterday declined to
comment.
Henry Putzel, a Manhattan-based attorney for Schwartz, also denied the
charges. Schwartz "absolutely asserts his innocence of any wrongdoing."
A source with knowledge of the case said the special litigation committee
and Wang had been negotiating a settlement before the committee's report
was released in April, with a dollar figure said to be in the tens of
millions. Wang is said to have rejected it on principle.
In a letter last week to lawyers for CA's litigation committee, Brewer, an
attorney at the firm Bickel & Brewer, questioned CA's understanding of the
law, and blamed CA and its committee for the "delay and obstruction" that
it says "fueled the court's frustration" that ultimately led to the
dismissal of Wyly's requests for relief. Wyly is expected to file a notice
of appeal this week to take his claims to a higher court.
A spokesman for CA declined to comment.
CA's decision not to join with Wyly to ask the judge for reconsideration
showed the special litigation committee was intent on "protecting its
colleagues on CA's board and others" rather than shareholders, Brewer
wrote to CA's lawyers.
