Free Motion for Summary Judgment - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10

John J. Bouma (#001358) James R. Condo (#005867) Patricia Lee Refo (#017032) Joseph G. Adams (#018210) SNELL & WILMER L.L.P. 400 E. Van Buren Phoenix, AZ 85004-2202 Telephone: (602) 382-6000 E-Mail: [email protected] Attorneys for Defendant Kirkland & Ellis IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Diane Mann, as Trustee for the Estate of LeapSource, Inc. et al., Plaintiffs, No. CIV 02-2099 PHX RCB KIRKLAND & ELLIS' MOTION FOR SUMMARY JUDGMENT REGARDING MALPRACTICE AND PROFESSIONAL NEGLIGENCE (COUNT 10) (Assigned to Hon. Robert C. Broomfield) Defendants. (Oral Argument Requested)

11 v.
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 · GTCR Golder Rauner, L.L.C.; a Delaware limited liability company, et al.,

Snell & Wilmer L.L.P.

The Trustee's malpractice theory against Kirkland & Ellis ("K&E") is this: · K&E represented GTCR in early 2001 concerning GTCR's relationship with LeapSource; and K&E had a conflict because it simultaneously represented LeapSource in early 2001, or alternatively, because it had represented LeapSource during the September 1999 formation negotiations during which it learned that Christine Kirk, who became LeapSource's CEO, wanted a firmer funding commitment from GTCR than GTCR was willing to give.

This theory cannot survive summary judgment. First, there is no evidence at all from which a jury could conclude that any conduct by K&E proximately caused the demise of LeapSource. LeapSource was represented and advised by independent lawyers throughout late 2000 and 2001 in connection with its funding dispute with GTCR. Those lawyers told LeapSource -- as the Court has already ruled -- that GTCR's funding
Case 2:02-cv-02099-RCB Document 328 Filed 02/27/2006 Page 1 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

commitment was not a firm, unconditional $65 million promise. Given that LeapSource had qualified, competent, independent lawyers, there is no connection whatever between anything K&E did and LeapSource's ultimate decision to file for bankruptcy. Second, should the Court need to look beyond the missing proximate cause link to the question of whether K&E had an actionable conflict of interest vis-à-vis LeapSource, the evidence is undisputed that K&E was not representing LeapSource in early 2001 -- it was representing only GTCR. Moreover, even assuming solely for this motion that K&E did represent LeapSource in some limited fashion during the September 1999 formation negotiations, that representation was not substantially related to the funding issue that was in dispute between LeapSource and GTCR in early 2001 and, therefore, did not give rise to any conflict. Whatever caused LeapSource to fail, it was not legal malpractice by K&E. Accordingly K&E moves pursuant to Fed. R. Civ. P. 56 for summary judgment on Count Ten of the Fourth Amended Complaint. The Trustee has argued in other briefs that the actions of David Eaton, a partner at AEG Partners, LLC who rendered financial services to LeapSource in 2001, should be imputed to K&E. There is no evidentiary support for this claim. As explained more fully in K&E's separate Motion For Summary Judgment Regarding Vicarious Liability (filed on September 8, 2005, Doc. #250), Eaton and his company were not agents for K&E. Rather than repeat those arguments, K&E respectfully refers the Court to the legal arguments and substantial evidence in that motion. This motion is directed solely to the lawyers at K&E who represented GTCR in its investment in LeapSource, not to the conduct of Eaton. This motion is supported by the following Memorandum of Points and Authorities and the separately-filed Statement of Facts In Support of Motion for Summary Judgment Regarding Malpractice and Professional Negligence ("SOF").

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Case 2:02-cv-02099-RCB

Document 328 - 2 -Filed 02/27/2006

Page 2 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

MEMORANDUM OF POINTS AND AUTHORITIES I. FACTUAL BACKGROUND. A. GTCR and Christine Kirk Were Each Represented By Their Own Attorneys In Negotiating GTCR's Investment in LeapSource.

K&E has represented GTCR in private equity transactions and investments for well over two decades. (SOF ¶ 1.) When GTCR began negotiating in earnest with Christine Kirk, who would become CEO of LeapSource, over the possibility of forming a business process outsourcing company, GTCR turned to its longstanding counsel at K&E for legal advice and assistance. From the earliest point of K&E's involvement in August and September 19991, Kirk understood that "GTCR was a long-standing client of Kirkland & Ellis." (SOF ¶ 3.) Kirk had previously retained counsel at the Chicago law firm of Sachnoff & Weaver to represent her in the negotiations with GTCR. She first spoke with Jeff Gilbert, a partner at the Sachnoff & Weaver firm, in April 1999 or earlier, months before the negotiations with GTCR began in earnest. (SOF ¶ 4.) Gilbert initially was advising Kirk concerning her departure from Arthur Andersen, but by late August and early September, his partner Jeff Schumacher was advising her in connection with the negotiations with GTCR. (SOF ¶ 5.) Schumacher, who was Kirk's principal counsel throughout the negotiations with GTCR and K&E, is an expert in representing clients in negotiations with venture capital firms. (SOF ¶ 6.) He has over two decades of experience in corporate and securities work, and has served as the head of the securities group at Sachnoff for over ten years. (Id.) In early September 1999, Kirk was also considering financing options other than GTCR, and the lawyers at Sachnoff advised her concerning multiple "potential funding sources," including GTCR. (SOF ¶ 7.) Once she decided to proceed with GTCR, Sachnoff represented Kirk "in connection with negotiations with GTCR concerning a K&E's first invoice regarding GTCR's investment in LeapSource covered a time period starting on September 1, 1999. (SOF ¶ 2.)
Case 2:02-cv-02099-RCB Document 328 - 3 -Filed 02/27/2006 Page 3 of 23
1

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

potential business opportunity." (Id.) In September 1999, GTCR and its counsel K&E began exchanging draft deal documents with Kirk and her counsel Schumacher. Kirk's lawyer reviewed and commented on each of the five deal documents -- including the documents that were between only LeapSource and GTCR. (SOF ¶ 8.) Schumacher commented on multiple drafts of the agreements, and K&E prepared revised drafts based on those comments. (Id.) In the course of these negotiations, Schumacher explained each of the agreements to Kirk and answered all of her questions. (SOF ¶ 9.) From the very beginning, both Kirk and her lawyers at Sachnoff understood that K&E was representing GTCR, which they knew to be a long-standing client of K&E. (SOF ¶ 10.) Kirk knew that K&E was actively negotiating with her lawyers at Sachnoff on behalf of GTCR. (SOF ¶ 11.) Indeed, Kirk knew throughout her time at LeapSource that K&E continued to have GTCR as its client. (SOF ¶ 12.) One of the key issues in the negotiation between GTCR and Kirk was the nature of the funding commitment by GTCR. Steve Ritchie, the K&E partner handling the negotiations for GTCR, explained that Kirk's lawyers "raised objections to the language we drafted in the documents" because "[t]hey were looking for a firmer commitment from GTCR." (SOF ¶ 13.) For instance, a draft of the purchase agreement dated September 16, 1999 reflects Schumacher's handwritten notes and his focus on GTCR's commitment of "up to" $65 million. (SOF ¶ 14.) Schumacher agreed that negotiations with K&E centered "on whether that language should be deleted or replaced with other language which would remove the conditional aspect associated with those words." (SOF ¶ 15.) Ultimately, the "up to" language remained in the agreement. Schumacher explained to his client Kirk that "there were conditions to the funding" and that it was not a firm commitment. (SOF ¶ 16.) Kirk admitted that her lawyers "fully explained" the Purchase Agreement to her and that she understood its term before she signed it. (SOF ¶ 17.) Kirk never met any of the K&E lawyers representing GTCR on the LeapSource transaction, either during the negotiations or at any other time. (SOF ¶ 18.) During the
Case 2:02-cv-02099-RCB Document 328 - 4 -Filed 02/27/2006 Page 4 of 23

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

negotiations, she spoke briefly with Richard Clyne, a K&E associate, who told her that he would be faxing her materials to sign and return. (SOF ¶ 19.) She claims that she spoke with Steve Ritchie, a K&E partner, sometime in September 1999, but cannot recall any conversations with him thereafter. (SOF ¶ 20.) Kirk never told her lawyer Schumacher that she had any substantive conversations with any K&E lawyer. (SOF ¶ 21.) B. LeapSource was Unrepresented Until After the Deal Documents Were Executed Because It Had No Independent Interests.

While the deal documents were being negotiated, a legal assistant at K&E prepared and filed the necessary paperwork to form Kirkco, LeapSource's predecessor, as a Delaware corporation on September 16, 1999. (SOF ¶ 22.) The Trustee now claims that K&E represented LeapSource commencing on that date. Kirk's lawyer Schumacher, however, was not surprised that K&E had filed the incorporation papers and did not believe that this rendered K&E counsel for Kirkco. (SOF ¶ 23.) Schumacher testified that Kirkco did not need to be represented by counsel between September 16 and 27 because "[i]t didn't have independent interests at that stage. The shareholders were -- the putative shareholders were -- I viewed them as the parties in interest." (SOF ¶ 24.) Moreover, during that time, LeapSource had no assets with which to retain counsel. (SOF ¶ 25.) As Schumacher testified, it is "typical for the corporate entity being formed to be unrepresented for some period of time while the parties negotiate other documents relating to the funding of that corporate entity." (SOF ¶ 26.) Kirk never told her lawyer that she understood K&E to be representing LeapSource while the deal documents were being negotiated. (SOF ¶ 27.) Moreover, there is no retainer letter between K&E and LeapSource. As the sole director of the company once it was incorporated, Kirk acknowledges that she was responsible for retaining counsel for the company. (SOF ¶ 28.) However, she could not identify any conversation or writing in which she retained K&E to serve as LeapSource's counsel during the period between September 16 and 27, 1999. (SOF ¶ 29.) Further, she does not recall anyone from K&E telling her that K&E would be representing
Case 2:02-cv-02099-RCB Document 328 - 5 -Filed 02/27/2006 Page 5 of 23

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

LeapSource. (SOF ¶ 30.) No lawyer who worked on the transaction -- from either side of the deal -- thought K&E represented LeapSource in any aspect of the transaction. (SOF ¶ 32.) Indeed, Schumacher's contemporaneous time entries -- sent to LeapSource in invoices -- regularly reference K&E as "attorneys for GTCR." (SOF ¶ 33.) Accordingly, Schumacher never thought that K&E had a conflict of interest, nor did he believe that K&E committed malpractice. (SOF ¶ 34.) Similarly, his partner Jeff Gilbert, who represented LeapSource in litigation with Kirk's former employer Arthur Andersen until August 2000, never thought that K&E ever had a conflict of interest. (SOF ¶ 35.) The testimony of Kirk's lawyer that LeapSource was unrepresented in the negotiations is entirely consistent with the opinions of Sy Peck, an experienced venture capital lawyer whom K&E retained as an expert in venture capital transactions. In Mr. Peck's undisputed expert opinion2: During the formation stage, the company does not need to be represented by counsel. The company does not have independent interests at this stage. The putative shareholders on the two sides of the transaction are the only parties in interest at this time. I am not aware of a single leveraged build up or consolidation transaction where the company was represented during the formation stage. (SOF ¶ 36.) C. After the Company Was Funded in September 1999, LeapSource Hired Its Own Lawyers at Other Law Firms.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Once it was funded on September 27, 1999, LeapSource retained lawyers to represent it. Sachnoff continued its work with Kirk and started representing LeapSource, both for corporate matters and in the litigation with Arthur Andersen. (SOF ¶ 38.) Sachnoff represented LeapSource, Kirk, and others in the Arthur Andersen litigation until Plaintiffs have no venture capital expert. Their ethics expert, Prof. Geoffrey Hazard, was told to assume that Kirkland was engaged in September 1999 to provide legal representation to LeapSource. (SOF ¶ 37.) Hazard did no investigation whatever to determine whether that assumption was true, and readily acknowledged that he is not an expert in venture capital transactions. (Id.)
Case 2:02-cv-02099-RCB Document 328 - 6 -Filed 02/27/2006 Page 6 of 23
2

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

the settlement agreement was finalized in September 2000, and it did corporate work for LeapSource in the months immediately following the formation of the company. (SOF ¶ 39.) In October 1999, LeapSource retained the Phoenix firm of Osborn Maledon as its principal outside counsel for transactional and corporate work. (SOF ¶ 40.) Sachnoff & Weaver stopped doing transactional work for LeapSource when the company retained Osborn Maledon to perform the same type of work. (SOF ¶ 41.) Osborn Maledon lawyers regularly attended meetings of the LeapSource Board of Directors. (SOF ¶ 42.) By contrast, no K&E lawyer ever attended a LeapSource board meeting. (Id.) Internal LeapSource documents describe Osborn Maledon as the company's "general counsel," and Rhodes testified that Osborn was "regular outside counsel" to LeapSource. (SOF ¶ 43.) From October 1999 through August 2001, Osborn Maledon billed LeapSource over $290,000 for corporate/transactional work. (SOF ¶ 44.) Like the lawyers at Sachnoff, LeapSource's lawyers at Osborn never believed that K&E was representing LeapSource. Michelle Matiski, the Osborn Maledon partner who was LeapSource's lead corporate lawyer from October 1999 until the company filed for bankruptcy in July 2001, testified that K&E never represented LeapSource, that she never observed K&E rendering legal services to LeapSource, and that she never concluded that K&E had a conflict. (SOF ¶ 45.) In fact, Matiski repeatedly told Kirk -- as early as October 1999 -- that K&E was representing GTCR and looking out for GTCR's interests, not LeapSource's. (SOF ¶ 47.) In addition to Osborn Maledon and Sachnoff & Weaver, LeapSource hired other law firms to perform legal work, such as the Weinberg Legal Group for intellectual property matters. (SOF ¶ 48.) A company document dated June 6, 2000 listing vendor agreements identified law firms under the heading "Professional Services," including Osborn Maledon and Weinberg Legal Group. (SOF ¶ 49.) LeapSource does not list K&E on that list of vendors supplying professional services to the company. (Id.) Similarly, in 2000, LeapSource sent out letters to its various legal counsel asking them to respond to
Case 2:02-cv-02099-RCB Document 328 - 7 -Filed 02/27/2006 Page 7 of 23

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

audit requests from the company's auditors. LeapSource did not send an audit request letter to K&E. (SOF ¶ 50.) D. K&E's Work in Connection With LeapSource Was Entirely for the Benefit of GTCR.

Because LeapSource was obligated under the Purchase Agreement to pay GTCR's legal fees incurred in connection with LeapSource, K&E sent its bills jointly to LeapSource and to GTCR. (SOF ¶ 51.) Tina Rhodes, LeapSource's controller responsible for managing relations with legal counsel, recognized that this obligation did not make K&E counsel for LeapSource. (SOF ¶ 52.) During the short life of LeapSource, K&E's representation of GTCR, the principal investor, required that there be limited contact between K&E and LeapSource. After the company was funded, the only K&E attorney who communicated with LeapSource was Clyne, the junior associate. (SOF ¶ 53.) He prepared supplements to the purchase agreement to document GTCR's continuing investments in the company, and printed out related board consents and stock certificates3. (Id.) As counsel for GTCR, Clyne confirmed with LeapSource's counsel at Osborn Maledon that K&E would continue to perform this work for GTCR. (SOF ¶ 54.) Matiski, LeapSource's lawyer, did not think there was anything improper about K&E preparing stock certificates for LeapSource, and she did not think it meant that K&E was counsel for LeapSource. (SOF ¶ 55.) In addition, Kirk and Clyne communicated briefly in early October 1999 about a draft offer letter and employment agreement checklist for LeapSource. Though the parties dispute the nature of these communications, it is undisputed that all of the employment agreements between LeapSource and its employees (except Kirk) were prepared by Osborn Maledon and were not finalized by K&E. (SOF ¶ 56.) Soon after LeapSource was funded, in October or November 1999, Clyne stopped sending documents related to GTCR's additional funding directly to Kirk for signature Under the operative agreements, GTCR received additional LeapSource stock with each additional investment.
Case 2:02-cv-02099-RCB Document 328 - 8 -Filed 02/27/2006 Page 8 of 23
3

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

and started going to Rhodes. (SOF ¶ 57.) During the more than one year period of October-November 1999 through February 27, 2001, Clyne only spoke with Rhodes between four and seven times, and the conversations were limited to "administrative-type matters, ministerial-type issues," such as obtaining signatures. (SOF ¶ 58.) He does not recall any conversations with Kirk after November 1999. (SOF ¶ 59.) Rhodes, the person at LeapSource who "managed relations" with legal counsel, never went to K&E for substantive legal advice for LeapSource during her entire tenure with the company, though she was aware that K&E performed certain ministerial tasks related to GTCR's investments in LeapSource. (SOF ¶ 60.) She did not believe that performing these minor tasks made K&E counsel for LeapSource. (Id.) To the contrary, she wrote to LeapSource's counsel at Osborn Maledon that K&E's Richard Clyne was "GTCR's counsel." (SOF ¶ 61.) She dealt only with Clyne, not any other lawyers at K&E, and the only conversations that she had with Clyne concerned the issuance of stock certificates and minutes. (SOF ¶ 62.) In addition to the ministerial tasks involving GTCR's investments, K&E reviewed a 2000 loan transaction to LeapSource that was guaranteed by GTCR. GTCR had a relationship with Harris Bank pursuant to which the bank extended loans to GTCR portfolio companies, supported by a GTCR guaranty. (SOF ¶ 63.) K&E reviewed the loan transaction on behalf of GTCR to ensure that the documents were in proper order. (Id.) In March, 2000, Harris Bank moved the loan to its parent company, Bank of Montreal, and K&E again reviewed the documentation on behalf of GTCR. (SOF ¶ 64.) Even Chris Kirk was not surprised that GTCR wanted its lawyers involved in the loan that GTCR was guaranteeing on behalf of LeapSource.4 (Id.) In late 2000, a stock option issue arose between LeapSource and GTCR as to which LeapSource and its counsel Matiski understood K&E represented GTCR. LeapSource authorized the issuance of certain stock options to certain employees and When LeapSource filed for bankruptcy, GTCR had to pay $10.25 million to the bank under the guaranty. (SOF ¶ 65.)
Case 2:02-cv-02099-RCB Document 328 - 9 -Filed 02/27/2006 Page 9 of 23
4

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

others, the result of which was to dilute GTCR's stock ownership interest in LeapSource. Matiski, for LeapSource, and Clyne, for GTCR, negotiated over how to correct the dilution without causing tax consequences. (SOF ¶ 67.) On behalf of LeapSource, Matiski negotiated with Clyne, representing GTCR, to draft an amendment to the purchase agreement to resolve this issue. (Id.) E. In 2001 K&E Was Representing and Advising Only GTCR In Connection With Its Investment in LeapSource.

Even Kirk admits that K&E had no conflict of interest, and did nothing that damaged LeapSource, during 2000. (SOF ¶ 69.) However, the Trustee contends that K&E somehow developed a conflict of interest in early 2001, when GTCR began discussions with LeapSource about future investments. In Kirk's own words, she was aware at the time that "GTCR was in constant contact with Kirkland & Ellis during January and February of 2001." (SOF ¶ 70.) According to Kirk, GTCR would tell her, "`we need to get back and talk to K&E about this,' or `we need to call K&E about this'" during this time. (Id.) Kirk understood these statements at the time to mean that K&E was providing legal advice to GTCR principals. (Id.) There is no evidence that K&E gave any legal advice to LeapSource in 2001. LeapSource's lawyer Matiski testified that Kirk and Gilman told her in early 2001 that they believed K&E had a conflict of interest because it purportedly represented both LeapSource and GTCR. (SOF ¶ 75.) Matiski corrected them by telling Kirk and Gilman that "Kirkland & Ellis represented and had always represented GTCR and was not looking out for the interests of LeapSource." (SOF ¶ 76.) Matiski told Kirk and Gilman it was clear that "LeapSource and Chris were not represented by K&E." (Id.) In mid-February 2001, Kirk retained separate counsel, Steve Savage of Fennemore Craig, to represent her personally in matters relating to LeapSource and GTCR. (SOF ¶ 77.) Neither Matiski nor Savage told Kirk that K&E had a conflict of interest with LeapSource. (SOF ¶ 78.)

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Case 2:02-cv-02099-RCB

Document 328- 10 Filed 02/27/2006

Page 10 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Kirk admits that while she was CEO of LeapSource -- from September 1999 until February 27, 2001 -- LeapSource suffered no damage as a consequence of any supposed conflict of interest. (SOF ¶ 79.) Moreover, she could not identify any specific legal advice that Clyne gave to LeapSource or GTCR in 2001. (SOF ¶ 80.) After Kirk was terminated as CEO, LeapSource continued to look to law firms other than K&E for legal advice. The company sought advice on the termination of Kirk and other officers from the firm of Jennings Strouss & Salmon. (SOF ¶ 81.) Osborn Maledon continued actively to represent LeapSource until it filed for bankruptcy. None of LeapSource's lawyers ever concluded that K&E had a conflict or asserted to K&E that it had a conflict. (SOF ¶ 34, 35, 45.) No one at LeapSource ever asserted to K&E that it had a conflict of interest. (SOF ¶ 59, 60, 79.) When this litigation began and K&E appeared on behalf of its client GTCR, no one asserted that K&E had a conflict of interest. On July 31, 2002, plaintiffs filed their First Amended Complaint, naming K&E as a defendant. II. EXPERT OPINIONS AND TESTIMONY. The Trustee retained Professor Geoffrey Hazard to offer expert opinions and testimony regarding the conduct of K&E. (SOF ¶ 82.) A. Hazard Assumes, But Does Not Opine, That K&E Represented LeapSource.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

In his expert report Prof. Hazard assumed that "Kirkland was engaged in September 1999 to provide legal representation to LeapSource," and that the representation lasted until at least February 2001. (SOF ¶ 83.) He assumed that K&E provided advice to GTCR between January and March 2001, but did not offer advice to LeapSource or inform LeapSource that a conflict of interest existed. (SOF ¶ 84.) From these assumptions, Hazard concluded that K&E had a conflict of interest arising from its supposedly concurrent representation of GTCR and LeapSource in late 2000 through March 2001. (SOF ¶ 85.) In the alternative, he opined that if LeapSource had become a former client by late 2000, K&E had a conflict of interest because its work
Case 2:02-cv-02099-RCB Document 328- 11 Filed 02/27/2006 Page 11 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

for GTCR in 2001 was "substantially related to the matters handled for LeapSource." (SOF ¶ 86.) He offered no opinion on causation, but stated that he understands there will be other evidence stating that LeapSource would have survived had it been "properly advised and assisted." (SOF ¶ 87.) In his deposition, Hazard confirmed that he merely assumed that K&E was engaged to represent LeapSource in September 1999. (SOF ¶ 88.) He did not conduct any independent investigation to confirm this assumption and relied only on a "narrative" of supposed facts supplied by plaintiffs' counsel. (SOF ¶ 89.) He did not know who supposedly engaged K&E or whether there was an engagement letter between K&E and LeapSource. (SOF ¶ 90.) He readily conceded that his opinions would change if K&E was not engaged to provide legal representation to LeapSource. (Id.) He admitted that it would be relevant to his opinion to know whether Kirk's lawyers testified that K&E was not representing LeapSource. (SOF ¶ 92.) He also conceded that if LeapSource had agreed to pay GTCR's legal fees, it would be "appropriate" for K&E to furnish LeapSource with copies of its invoices for LeapSource to pay GTCR's legal fees. (SOF ¶ 93.) He agreed his opinions could change if LeapSource was regularly represented in corporate matters during the year 2000 by another law firm. (SOF ¶ 94.) He also agreed that it would be relevant to his opinion if internal LeapSource documents referred to another law firm as the company's "general counsel." (SOF ¶ 95.)5 At his deposition, Hazard testified that K&E's supposed conflict in 2001 is based on K&E's knowledge, acquired at the time that the formation documents were executed, "that Mrs. Kirk has wanted a firm contract arrangement; knew that it was not provided; and that therefore the reliance would have to be on the idea of good faith implementation of a less of a non-strict commitment, non-specific." (SOF ¶ 96.) In particular, Hazard claimed that K&E knew that Kirk thought that "good faith" entailed a "more positive Plaintiffs' counsel did not include any of these facts in the narrative they wrote for Prof. Hazard.
Case 2:02-cv-02099-RCB Document 328- 12 Filed 02/27/2006 Page 12 of 23
5

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

helpful attitude" and that GTCR didn't share that view. (Id.) Hazard admitted, however, that Kirk's desire for a firm commitment was "not confidential," and that "everyone knew that Chris Kirk wanted a firmer commitment" and that GTCR refused to give it. (SOF ¶ 97.) As Hazard opined, a conflict existed in 2001 because K&E's client GTCR was taking a position "adverse to Ms. Kirk's conception of what their responsibility is." (SOF ¶ 99.) But Hazard admitted that K&E learned this information while representing its client GTCR and while Kirk was represented by her own lawyers. (Id.) B. Hazard Admitted That There is No Proximate Cause if LeapSource Had Independent Legal Counsel.

Hazard also admitted that whether LeapSource received independent advice from other law firms in 2001 was a key factor. According to Hazard, if LeapSource had obtained independent legal advice in January-March 2001, then "a conflict with Kirkland might have could well be vitiated or nullified by the fact that the LeapSource is getting independent advice." (SOF ¶ 103.) Indeed, as Hazard put it, "if you say that LeapSource had independent representation on the subject matter of its relation to GTCR, . . . then it would be a very substantial question -- to put it mildly -- as to whether there's any proximate causation between whatever Kirkland was doing for GTCR and any consequence to LeapSource." (SOF ¶ 104.) III. THE UNDISPUTED FACTS DEMONSTRATE THAT THE TRUSTEE CANNOT PROVE HER MALPRACTICE CLAIM. A. Required Elements of a Legal Malpractice Claim.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

To prove her legal malpractice claim, the Trustee must establish: (1) the existence of an attorney-client relationship that imposes a duty on the attorney to exercise that degree of skill, care, and knowledge commonly exercised by members of the profession, (2) breach of that duty, (3) that such negligence was a proximate cause of resulting injury, and (4) the fact and extent of the injury. Phillips v. Clancy, 733 P.2d 300, 303 (Ariz. Ct. App. 1987). As set forth below, the undisputed facts show that no action by K&E proximately caused any injury to LeapSource and, in any event, that K&E never had an
Case 2:02-cv-02099-RCB Document 328- 13 Filed 02/27/2006 Page 13 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

actionable conflict of interest. B. Expert Testimony Is Necessary to Establish a Malpractice Claim.

It is well-settled that expert testimony is required to establish the standard of care in a legal malpractice claim. See Asphalt Engineers, Inc. v. Galusha, 770 P.2d 1180, 1181-82 (Ariz. Ct. App. 1989); Baird v. Pace, 752 P.2d 507, 509 (Ariz. Ct. App. 1987) (same); see also Flanders & Medeiros, Inc. v. Bogosian, 65 F.3d 198, 206-07 & n.16 (1st Cir. 1995) ("the requirement of expert testimony in proving most types of malpractice claims has been so widely adopted that `it may even be malpractice to litigate a legal malpractice case without expert testimony'" (citation omitted)). Accordingly, the scope of the Trustee's claim of legal malpractice against K&E must be supported by the opinions and testimony of Prof. Hazard, plaintiffs' designated expert on the issue. Based upon his assumption that K&E represented LeapSource in the formation negotiations and thereafter, Hazard opines that K&E developed a conflict of interest when it represented GTCR in late 2000 and early 2001. Hazard states that the conflict is based on K&E's knowledge, acquired at the time that the formation documents were executed, "that Mrs. Kirk has wanted a firm contract arrangement; knew that it was not provided; and that therefore the reliance would have to be on the idea of good faith implementation of a less of a non-strict commitment, non-specific." (SOF ¶ 96.) This testimony makes it clear that the Trustee's claim of malpractice is strictly limited to the period from late 2000 through early 2001. To the extent that the Trustee contends that K&E breached any duty owed to LeapSource in any other time period, summary judgment is warranted because the claim is not supported by expert testimony. C. 1. K&E Did Not Proximately Cause Any Injury To LeapSource. The Trustee Has Failed to Produce Any Evidence of Causation to Support The Claim of Legal Malpractice.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

To withstand summary judgment on the claim of legal malpractice, the Trustee must produce evidence sufficient to raise a genuine issue of fact that K&E's alleged breach "was a proximate cause of [the] resulting injury." Phillips, 733 P.2d at 303. In
Case 2:02-cv-02099-RCB Document 328- 14 Filed 02/27/2006 Page 14 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

other words, the Trustee cannot satisfy her burden on causation by merely pointing to an alleged conflict of interest. In a malpractice action, as distinguished from a disqualification motion, a plaintiff must come forward with specific facts showing that a breach of duty by K&E was the proximate cause of damage suffered by LeapSource. See Brosie v. Stockton, 468 P.2d 933, 936 (Ariz. 1970) ("The whole theory of his cause of action is that the defendant had represented both plaintiff and his wife in a divorce case. This is not enough to show damage."). Accord State v. Stockton, 499 S.E. 2d 790, 800 (N.C. Ct. App. 1998) ("The former client must establish not only that the attorney possessed and misused the client's confidences, but also that the fiduciary breach was a proximate cause of the injury.") (quoting 2 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 16.23 at 484 (4th ed. 1996)); Richter v. Van Amberg, 97 F. Supp. 2d 1255, 1261 (D.N.M. 2000) (the Rules of Professional Conduct "provide some guidance in determining the professional obligations of a lawyer, but they do not provide independent grounds for a legal malpractice claim."); Wilbourn v. Stennett, Wilkinson & Ward, 687 So.2d 1205, 1217 (Miss. 1997) ("the conclusive presumption of shared confidences cannot be substituted for a causal connection between the acts of the lawyer and the alleged damages"). On the undisputed facts of this case, the Trustee cannot possibly meet this burden. According to the Trustee's expert Prof. Hazard, K&E supposedly had a conflict of interest by representing GTCR regarding its LeapSource investment in late 2000 and early 2001 "in that matters for GTCR at that point were substantially related to the matters handled for LeapSource." (SOF ¶¶ 86, 100.) The conflict supposedly arose from K&E's knowledge that Kirk wanted a firm funding commitment from GTCR, even though Hazard admits that Kirk's desire for a firm commitment was "not confidential," and that "everyone knew that Chris Kirk wanted a firmer commitment" and that GTCR refused to give it. (SOF ¶¶ 96, 97.) There is no causal connection between Kirk's very public desire for a firmer commitment from GTCR -- which everyone (including GTCR) already knew -- and any
Case 2:02-cv-02099-RCB Document 328- 15 Filed 02/27/2006 Page 15 of 23

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

harm suffered by LeapSource in 2001. The nature of the funding commitment was a heavily negotiated point during September 1999. (SOF ¶¶ 13-15.) Obviously, GTCR knew in 1999 about Kirk's desire for a firmer commitment. It did not learn this "news" from K&E -- or anyone else -- in 2001. More broadly, Kirk's desire in 1999 for a firmer commitment was irrelevant to the failure of LeapSource in 2001, whether this information was public or confidential. This Court has already held, as a matter of law, that the Purchase Agreement "is perfectly clear that it imposed a conditional funding obligation on GTCR. Mann has mistakenly claimed that this obligation required full funding of the $65 million. The clear and unambiguous terms belie this assertion." See Order dated 9/30/2003 (doc. # 72) at 11. In the absence of specific evidence establishing causation, the Trustee must present expert testimony to substantiate the link between the claimed breach and the alleged injury. See Carbone v. Tierney, 864 A.2d 308, 314-15 (N.H. 2004) ("Unless the causal link is obvious or can be established by other evidence, expert testimony may be essential to prove what the lawyer should have done.") (quoting 5 R. Mallen & J. Smith, Legal Malpractice § 33, at 116 (5th ed. 2000); see also Rose v. Welch, 115 S.W.3d 478, 484-85 (Tenn. Ct. App. 2003) (in a legal malpractice action, expert testimony necessary to establish proximate cause "unless the alleged malpractice is within the common knowledge of laymen"); Gregg v. National Med. Health Care Services, Inc., 699 P.2d 925, 928 (Ariz. Ct. App. 1985) (expert testimony required to establish proximate cause in medical practice case unless causal relationship is readily apparent to the trier of fact). But, Hazard makes it clear that he is not offering an expert opinion on causation. Hazard's expert report states only, "I understand that there will be other evidence that, if LeapSource had been properly advised and assisted, it would have survived as a functioning company rather than going into bankruptcy." (SOF ¶ 87.) In his deposition, Prof. Hazard testified that he is "not providing" evidence of causation. (SOF ¶ 105.) In this case, the causal link between K&E's knowledge of Kirk's desire for a firmer funding commitment and any damage suffered by LeapSource is entirely missing.
Case 2:02-cv-02099-RCB Document 328- 16 Filed 02/27/2006 Page 16 of 23

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Without any evidence or expert testimony to establish proximate causation, summary judgment is warranted. 2. Prof. Hazard Conceded That There Would Be No Causation If LeapSource Was Represented By Other Independent Law Firms.

What is more, Hazard admitted that if LeapSource received "independent legal advice," it "would raise a question about any proximate cause." (SOF ¶ 103.) As he noted, "if you say that LeapSource had independent representation on the subject matter of its relation to GTCR, . . . then it would be a very substantial question -- to put it mildly -- as to whether there's any proximate connection between whatever Kirkland was doing for GTCR and any consequence for LeapSource." (SOF ¶ 104.) This statement is certainly correct. In this case, LeapSource's outside counsel has testified that she provided representation to LeapSource regarding its relationship with GTCR and K&E. Matiski told LeapSource when she was first retained that the agreements with GTCR did not provide a firm funding commitment. (SOF ¶ 46.) At LeapSource's direction, Matiski tried to negotiate a new promise from GTCR in December 2000 that it would fund the full $65 million -- and GTCR refused. (SOF ¶ 68.) Matiski represented LeapSource in its continuing discussions with GTCR in early 2001 over its funding. (SOF ¶ 73.) Kirk admits that Osborn's representation of LeapSource was competent and that Osborn fulfilled all of its duties to LeapSource. (Id.) She also consulted with her lawyers at Sachnoff about GTCR's funding responsibilities. (SOF ¶ 74.) In short, there is abundant and undisputed evidence that LeapSource had competent, independent legal counsel throughout its negotiations with GTCR in late 2000 and early 2001. This independent representation by other law firms torpedoes any claim by the Trustee that any action by K&E proximately caused injury to LeapSource. When combined with Kirk's actual knowledge that K&E was representing GTCR during this time, there is no evidence that K&E's alleged breach caused any harm to LeapSource.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Case 2:02-cv-02099-RCB

Document 328- 17 Filed 02/27/2006

Page 17 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

D.

K&E Did Not Have An Actionable Conflict of Interest. 1. There is No Evidence That K&E Simultaneously Represented GTCR and LeapSource in 2001.

There is no evidence to support Hazard's assumption that K&E simultaneously represented GTCR and LeapSource in 2001, as the funding dispute unfolded. LeapSource's controller, responsible for managing the company's outside counsel, testified that K&E was not representing LeapSource. (SOF ¶¶ 52, 60.) LeapSource's counsel at Osborn Maledon testified that K&E was not representing LeapSource, and that she told Kirk so repeatedly. (SOF ¶¶ 47, 76.) The lawyers at K&E testified that they were not representing LeapSource. Kirk knew that GTCR was in constant communication with its lawyers at K&E in January and February, and Kirk cannot point to any legal advice K&E rendered to the company in 2001.6 (SOF ¶¶ 70, 71.) Because there is no factual basis for Hazard's assumption of simultaneous representation, it cannot support the Trustee's claim. 2. There is No Substantial Relationship Between K&E's Representation of GTCR in 2001 and Its Supposed Prior Representation of LeapSource.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

In the alternative, Hazard opines that K&E's representation of GTCR in 2001 was "substantially related" under Ethical Rule 1.9(a) to its supposed representation of LeapSource in September 1999 and was therefore improper. But even if K&E had represented LeapSource during its formation in 1999, that would not have precluded K&E's subsequent representation of GTCR in late 2000 and early 2001. The ministerial work performed by K&E to form the corporate shell for what would become LeapSource ­ such as incorporating the company and registering it to do business ­ has no relationship to the issues that arose in early 2001 regarding GTCR's obligation to fund LeapSource.

As the Trustee will surely note, Dan Yih of GTCR testified without foundation in response to a misleading question that he believed K&E to be counsel for LeapSource. (SOF ¶ 72.) He further testified, however, that he had no personal knowledge that K&E ever represented LeapSource. (Id.)
Case 2:02-cv-02099-RCB Document 328- 18 Filed 02/27/2006 Page 18 of 23

6

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Hazard's opinion rests upon his assumptions about the work that K&E performed during the formation, not record evidence. For instance, Hazard assumed for purposes of his opinion that K&E was specifically retained to represent LeapSource, and admitted that his opinion would change if the assumption was incorrect. (SOF ¶¶ 83, 88, 90.) He conceded that he did not know precisely what K&E was retained to do. (SOF ¶ 91.) In fact, the evidence shows that K&E's work related to LeapSource in 1999 was limited to ministerial tasks performed by a legal assistant, such as filing incorporation papers and qualifying the company to do business. In her deposition, Kirk confirmed that K&E's work during the formation period was limited to such minor tasks: Q: What legal advice did Kirkland & Ellis provide to you prior to September 27, 1999? About filing a -- filing tax forms, about which states that we should file the corporation in, about things that should go into other employment agreements.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

A:

Snell & Wilmer L.L.P.

[. . .] Q: Besides information concerning tax forms, where the corporation should be incorporated and registered, and things that should go into employment agreements between LeapSource and certain employees, is there any other legal advice that you contend Kirkland & Ellis provided to you or through you to LeapSource in September 1999?

[objection] A: Not that I can recall at this time.

(SOF ¶ 31.) For purposes of this motion, K&E accepts Kirk's testimony as true and objectively "reasonable." See In re Pappas, 768 P.2d 1161, 1167 (Ariz. 1988) (citing In re Neville, 708 P.2d 1297, 1302 (Ariz. 1985)); Guillebeau v. Jenkins, 355 S.E.2d 453, 458 (Ga. Ct. App. 1987) (an "attorney-client relationship cannot be created unilaterally in the mind of a would-be client; a reasonable belief is required"). This work by K&E was not substantially related to K&E's subsequent representation of GTCR in late 2000 and early 2001, when GTCR ultimately concluded to
Case 2:02-cv-02099-RCB Document 328- 19 Filed 02/27/2006 Page 19 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

stop funding of LeapSource. According to Hazard, K&E's representation of GTCR "involve[d] measures to wind down LeapSource," and it was substantially related to the alleged earlier representation of LeapSource on the ground that "you help somebody set up a company; then you help somebody take it apart." (SOF ¶ 100.) When asked about the nature of the advice given by K&E to GTCR at that time, Hazard said that he "infer[s] that the subject matter included whether GTCR was doing what its policy or plan was going to be concerning funding." (SOF ¶ 101.) Hazard admitted that he did not have specific information about the privileged advice that K&E gave to GTCR, but he inferred the content of the advice from GTCR's claim of privilege for those communications. (SOF ¶ 102.) Simply put, there is no logical connection ­ let alone a substantial relationship ­ between the ministerial tasks that K&E performed to form Kirkco in 1999 and the issues that later arose in late 2000 and early 2001 about GTCR's funding of LeapSource. None of the tasks that K&E performed to form LeapSource -- such as the incorporation or filing of tax papers -- was ever at issue in late 2000 or early 2001. There is no evidence that K&E or GTCR attempted to undo the incorporation of LeapSource or to revoke the qualification of the company to do business. Instead, as LeapSource's attorney at Osborn Maledon recognized from the very beginning, GTCR's obligation to fund LeapSource arose from the deal documents that were heavily negotiated between Kirk and GTCR. (SOF ¶ 46.) This Court already has held that the documents do not create a firm funding commitment in favor of LeapSource from K&E. Kirk also asserted that she received legal advice regarding "things" that should go into employment agreements. However, her employment agreement was negotiated by her attorneys at Sachnoff and GTCR's attorneys. All other LeapSource employment agreements, as the parties agree, were prepared by LeapSource's lawyers at Osborn Maledon, not K&E. (SOF ¶ 56.) Kirk could not recall any specific advice that she received regarding the employment agreements.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Case 2:02-cv-02099-RCB

Document 328- 20 Filed 02/27/2006

Page 20 of 23

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Notably, the Trustee does not argue that Kirk or anyone else at LeapSource ever gave confidential information to K&E, or that K&E used confidential information in any way. Even Hazard concedes that this case does not involve a lawyer using confidential disclosures against a former client. (SOF ¶ 98.) As courts in Arizona and elsewhere have recognized, a substantial relationship between matters for a former client and a current client will constitute a conflict of interest only if the matter involves "any disclosures of confidential information" from the former client. Alexander v. Superior Court, 685 P.2d 1309, 1316 (Ariz. 1984). If no disclosures of confidential information are involved, "the substantial relationship test is not applicable." Id. Put differently, "the `substantial relationship' test between subject matters of representation must be a reality, involve actual adversity and a breach of confidences." Wilbourn v. Stennett, Wilkinson & Ward, 687 So.2d 1205, 1216 (Miss. 1996); see also State v. Petree Stockton, L.L.P., 499 S.E.2d 790, 800 (N.C. Ct. App. 1998) ("To state a claim against an attorney representing a client adversely against a former client, `the past client must show more than the potential for misconduct.'") (quoting 2 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 16.23 at 484 (4th ed. 1996)). Without evidence of specific confidences at issue or a meaningful relationship between K&E's ministerial work and the GTCR's later decision to stop funding, there can be no conflict of interest founded on the "substantial relationship" test. Plaintiffs' conclusory allegations are not enough to raise a genuine issue of material fact. See Doe v. Chand, 781 N.E. 2d 340, 347 (Ill. Ct. App. 2002) ("[S]uch generalized allegations are wholly insufficient to meet the [litigant's] burden of demonstrating a substantial relationship between the current and former representations or to justify the drastic step of disqualifying Doe's counsel."). IV. CONCLUSION. The Trustee cannot succeed on her malpractice claim. The overwhelming evidence in the record shows that K&E never represented LeapSource and that there is no evidence of proximate causation. Without evidence to support these essential elements, the
Case 2:02-cv-02099-RCB Document 328- 21 Filed 02/27/2006 Page 21 of 23

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Trustee's claim is fatally flawed. Summary judgment on this count is appropriate. DATED this 27th day of February, 2006. SNELL & WILMER L.L.P.

By

s/ Joseph G. Adams John J. Bouma James R. Condo Patricia Lee Refo Joseph G. Adams Attorneys for Kirkland & Ellis

CERTIFICATE OF SERVICE I hereby certify that on February 27, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Leo R. Beus Scot C. Stirling Beus Gilbert, PLLC 4800 North Scottsdale Road Scottsdale, AZ 85251 Attorneys for Plaintiffs Don P. Martin Edward A. Salanga Quarles & Brady Streich Lang, LLP Two North Central Phoenix, AZ 85004-2391 Attorneys for GTCR Defendants and Defendants Nolan, Rauner, Yih, Donnini and Canfield David S. Foster Latham & Watkins, LLP Sears Tower, Suite 5800 233 South Wacker Drive Chicago, IL 60606 Attorneys for GTCR Defendants and Defendants Nolan, Rauner, Yih, Donnini and Canfield Merrick B. Firestone Ronan & Firestone, P.L.C. 649 North Second Avenue Phoenix, AZ 85003 Attorneys for Michael Makings

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Case 2:02-cv-02099-RCB

Document 328- 22 Filed 02/27/2006

Page 22 of 23

1 2 3 4 5 6 7 8

Foster Robberson Richard A. Halloran Lewis and Roca LLP 40 N. Central Avenue Phoenix, AZ 85004-4429 Attorneys for David L. Eaton and AEG Partners LLC Steven J. Brown Steve Brown & Associates, L.L.C. 1440 E. Missouri, Suite 185 Phoenix, AZ 85014-2412 Attorneys for Plaintiff Diane Mann, as Trustee for the Estate of LeapSource, Inc. s/ Joseph G. Adams

9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

1754514

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case 2:02-cv-02099-RCB Document 328- 23 Filed 02/27/2006 Page 23 of 23

Snell & Wilmer L.L.P.