September 2009 Newsletter

Henry Kissinger
Marc Redlich with former Secretary of State Henry Kissinger, who serves as a Member of the Board of Directors of the American Council on Germany.
Dear Friends and Colleagues,

     I hope this letter finds you and your family well, and that you have had a pleasant summer.

     Over the past several months we have been involved in a number of interesting cases and activities which I thought you might like to know about.

     As you might imagine, our clients’ problems reflect the difficulties in the economy at large. One client, a stockbroker, had to leave his former brokerage house voluntarily due to the poor situation on Wall Street, and joined a rival firm. A peculiarity of the brokerage industry is that so-called “signing bonuses” and subsequent annual bonuses granted to employees come with what is euphemistically referred to as “golden handcuffs”, in this case long-term loan agreements for the same amounts being paid in bonuses. The “loans” are paid down over an extended period, in this case five years. If the broker leaves anytime before the end of the five-year period, s/he has to repay the remaining portion of the bonus. Worse, when bonuses are paid after subsequent years of service, they too are documented as five-year loans. So, even if a broker stays with the same firm for many years, whenever s/he leaves, the broker will still face a substantial repayment of the past bonuses that were earned.

     As in so many other employment cases, many brokers don’t even realize the import of the numerous forms and documents that they signed that first day of work with a new firm, until they leave and get a demand letter for loan repayment, with interest, of what could be hundreds of thousands of dollars. That is the situation we faced when the client was served with a demand and threat of industry-administered arbitration. Fortunately, through negotiations and research, we were able to reach a settlement for a small fraction of the demand, payable over an extended period of time without interest accruing. This is just one example of being faced with a difficult, apparently insurmountable conundrum, and turning it into a successful result for the client.

      In another case, a real estate developer we represent was faced with a substantial claim to which there was again, little in the way of a legal defense available. The problem was the size of the debt and the client’s inability to raise funds from lending institutions to repay it. The latter problem results directly from the banking meltdown that followed the Bear Stearns and Lehman failures last year. What we were able to do for the client is once again, to resolve the case for a fraction of the original claim, to be repaid over an extended period, most of which would be without interest accruing. When I was a young lawyer just starting out in practice, a wise older lawyer at the firm told me that “there is always something you can do for a client,” no matter how serious the straits it was in. That philosophy continues to serve me and my clients well.

      I reported previously on a divorce case I took over about a year and a half ago. My client, the husband, came from a financially successful family, and had personally been successful before the economy turned sour. The parties had reached a settlement, which had unraveled before I got involved in the case. Over the course of the subsequent year, with the bad economy, the husband had been unable to find new work. But the wife persisted in demanding a judgment based on her previous expectations and premised on his future earning ability. Two days of trial were held, during which we were able to show that the wife had testified falsely at her earlier depositions. Just before the trial was to resume several months later, she agreed to a settlement for the cash equivalent of about 8% of what she could have had a year and a half before if she had not unraveled the earlier settlement.

      We recently went through a twelve-day trial at the Massachusetts Commission Against Discrimination, where I represented a woman whom we strongly believe was terminated because of her age from a company owned by one of the wealthiest families in the country. Of 13 employees terminated around the same time, 12 were over 40 years old (the suspect category, pursuant to the statutory and case law), 10 were over 50, and 2 were over 60. Our client was just shy of her 60th birthday. It was a hard-fought trial and we are in the process of completing final briefs for the hearing officer. We expect a favorable result and I will let you know how the case turns out in one of our future newsletters.

      In a completely different forum, I was asked to represent two students at a local college. They had been accused of cheating, allegedly based on an anonymous tip. The peculiar aspect of this was that no one, not the professor or other exam proctors, had ever seen evidence of cheating at any of the six or seven examinations the students took together in two different courses. The basis of the accusation was that a statistical comparison of their test results which were still available, showed that their multiple choice answers were exactly the same in some 245 out of 250 questions, and that these identical answers included exactly the same wrong answers. In the first exam, they had answered 4 of the questions differently. In all the subsequent exams, they had just one different answer. Quite remarkable. Based on the school’s statistical analysis, it concluded that there must have been cheating going on.

     The school scheduled a Disciplinary Committee hearing and provided the students with its supporting documentation just two weeks before the hearing, and its statistical analysis one day before the hearing, with further analysis materials just 5 minutes before the hearing. This was a case where these students, who had generally outstanding grades, became real working partners with me in fashioning our defense. We were able to show that the students were roommates, had the same major, studied together on these courses, prepared study guides together, and that even some of the questions the professor had marked wrong were probably right, based on textbook evidence that the students researched. We worked as a team with the students and their families to present a strong, cogent defense to the accusations. The result was a full vindication from the Disciplinary Committee. The losses to them and their families if they had been found guilty, and very possibly expelled from school, would have been devastating in terms of tuition already paid, loss of future earnings in their chosen field, and the destructive impact it would have had on their lives. Needless to say, the clients and I were very pleased with the result.

      In another case, I was able to assist an older couple in convincing the wife’s insurance carrier to reinstate health care benefits that it had cut off for a period of time. This had caused great economic and emotional distress to the couple. The benefits are now being paid, including retroactive payments.

      The Friends of Switzerland honored with its Stratton Prize, Dr. Douglas Sears, Associate Provost of Boston University, who served as Superintendant of the Chelsea Public Schools during its partnership with BU, and who went on to become Dean of the University’s School of Education. He had served earlier in his career as a member of the U.S. diplomatic corps, including a tour in the Bern Embassy with Ambassador Faith Whittlesey, who joined us for the festivities. Our upcoming program of luncheons this year features speakers on the economy, art, entrepreneurship and our ever popular Holiday luncheon in December featuring a musical performance by talented young musicians.

      The American Council on Germany, of which I am Boston Warburg Chapter coordinator, also sponsors monthly speaker luncheons. We recently hosted a luncheon featuring a talk about the resistance efforts in Germany up to and during the last World War, which are not well known generally in the U.S. We will also host a talk by the General Consul in Boston about the upcoming German national elections. At a recent Annual John J. McCloy Dinner of the ACG, I met and chatted with our former Secretary of State, and former Harvard professor, Dr. Henry Kissinger, who is a member of the ACG’s Board of Directors. A photo from the event is enclosed. If you are interested in knowing more about FOSI or the ACG, please contact me.

     These last six months have been very interesting and successful both for our clients and our firm. We continue to practice in a wide range of legal areas, including trials and appeals, corporate business and commercial law, real estate issues, employment, discrimination, divorce and university law.

     If you have any questions about these cases or about any legal matters where we can be of assistance to you or someone you know, please do not hesitate to call on me.

     As always, kindest personal regards.

Marc Redlich


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