Monthly Archives: October 2004

DuPont Photomask acquired

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Japanese technology and printing company Toppan Printing Co. announced on Tuesday that it will acquire Round Rock, Texas-based DuPont Photomasks Inc. for about $650 million. The deal will create the world’s largest maker of photomasks, which are like stencils that are used to etch circuits onto silicon and, thus, are key components in semiconductor production. The transaction is expected to close in early 2005.
Under the deal, DuPont Photomasks shareholders will receive $27 a share. After the completion of the deal, the U.S. company will become a wholly owned Toppan unit named Toppan Photomasks Inc. DuPont Co., which is DuPont Photomasks’ largest shareholder with about a 20% stake, has agreed to the deal.

Stros 2004 Review: Stros-Braves Playoff Preview

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The media is all aflutter with the fact that the Stros have never beaten the Braves in three previous playoffs (in 1997, 1999, and 2001), but that fact is irrelevant to the current series. Only five of the Stros’ 25 man roster were even on the 2001 club (Bags, Bidg, Ausmus, Viz, and Berkman) and the same roster turnover is true for the Braves. So, these are different teams at a different time, and what has occurred in the past is largely just the stuff of baseball myths that media types enjoy discussing while trying to figure out something perceptive to say.
In its essence, baseball is a simple game. While at bat, a club tries to score more runs than its opposition. While in the field, the club tries to get three outs each inning before the opposition scores as many runs as the club has scored. Thus, creating runs while hitting, and saving runs while pitching and playing defense, are the most important indicators of success in baseball. That’s why I like the statistics of runs created against average (“RCAA”) and runs saved against average (“RSAA” and RCAA are explained here) — they are solid reflections of how a player and a team stacks up against an average player and an average team in their league at any particular point in time.
Based on RCAA and RSAA, the Braves should beat the Stros in this series, but not by much. Moreover, based on RCAA and RSAA, the Cubs and the Giants should have beaten out the Stros for the Wild Card Playoff spot, so the statistics are simply indicators of probable performance, not dispositive predictive tools. The nature of human performance generally and the charm of baseball in particular is the unpredictability of it all.
Since my most recent periodic review of the Stros hitters’ RCAA and the pitchers’ RSAA, the Stros overtook both the Giants and the Cubs in the NL Wild Card playoff race, and the clubs’ final RCAA and RSAA bear out what happened. Here are the Stros hitters’ final RCAA numbers, courtesy of Lee Sinins, through the end of the regular season:
Lance Berkman 69
Carlos Beltran 46 (28 with the Stros, 18 with the Royals)
Jeff Bagwell 17
Jeff Kent 12
Mike Lamb 11
Craig Biggio 8
Jason Lane 3
Eric Bruntlett 2
Willy Taveras 0
Chris Tremie 0
Jason Alfaro -2
Chris Burke -3
Orlando Palmeiro -4
Richard Hidalgo -9
Adam Everett -11
Morgan Ensberg -12
Jose Vizcaino -14
Raul Chavez -19
Brad Ausmus -26
After falling back to ninth a week before the end of the regular season, the Stros’ seven game winning streak to close out the season was bolstered by another surge in hitting that resulted in the Stros finishing seventh out of the 16 National League teams in RCAA (50), while the Braves finished fifth (60 RCAA). Frankly, that means the teams are about equal in hitting, as the Stros RCAA would be 8 points higher than the Braves had Beltran played with the club the entire season.
Insmuch as the Stros were at 17 RCAA a week ago, their hitting over the last week of the season was flat remarkable. Berkman and Beltran concluded monster years, and Bags and Bidg rebounded nicely after their lull following the earlier 12 game winning streak. Moreover, after being essentially an average National League hitter for the entire season, Jeff Kent went nuclear in the last week of the season and improved his RCAA from 1 to 12. Jason Lane also improved notably over that time, raising his -2 RCAA to a plus 3 by the end of regular season.
Now, here are the Braves’ individual RCAA figures:
J.D. Drew 66
Eli Marrero 14
Marcus Giles 13
Chipper Jones 11
Johnny Estrada 9
Julio Franco 6
Charles Thomas 5
Adam LaRoche 2
Rafael Furcal 1
Damon Hollins 1
Andruw Jones 0
Dewayne Wise -5
Wilson Betemit -6
Nick Green -8
Jesse Garcia -9
Mike Hessman -9
Eddie Perez -11
Mark DeRosa -20
In effect, the Braves have an outstanding hitter in Drew, who is almost equal to Berkman, but then a big dropoff to their second best hitter — there is clearly no Beltran-caliber second best hitter on the Braves. That is an advantage for the Stros, but it is offset by the fact that the Stros are pulled down by the amount of play that deficient hitters Ausmus, Chavez, Viz, and Ensberg receive. Stros manager Phil Garner would be well-advised to play the much more productive Lamb during the playoffs over Ensberg.
The big difference in the Braves and the Stros is in pitching, where the Braves are stronger even though the Stros’ pitching staff is quite good. Here are the Stros pitchers’ RSAA:
Roger Clemens 32
Brad Lidge 26
Roy Oswalt 22
Wade Miller 10
Dan Miceli 6
Octavio Dotel 5
Andy Pettitte 4
Chad Qualls 3
Russ Springer 3
Dan Wheeler 3
Darren Oliver 1
Brandon Backe 0
Mike Gallo -2
Chad Harville -2
David Weathers -2
Jeremy Griffiths -3
Ricky Stone -3
Kirk Bullinger -6
Jared Fernandez -6
Pete Munro -9
Carlos Hernandez -10
Brandon Duckworth -11
Tim Redding -15
The Stros are fourth among the 16 National League teams with a team RSAA of 46, which is the position that the Stros’ staff has been for most of the second half of the season. On the other hand, the Braves staff’s RSAA is a stout 89, which is second only to the Cubs’ staff that measured a heady 121 on the season (how again did the Cubs blow their lead in the Wild Card Playoff race?).
Clemens, Lidge and Oswalt are three of the best pitchers in baseball, and that’s a good nucleus for a short series. Miceli has bounced back well from his three week stint on the DL with pink eye, but beyond those four pitchers, the Stros are relying on a slew of young and not so young pitchers who are average or barely above average. Inasmuch as all of those pitchers seem to be pitching well right now (particularly the irrepressible Backe), the Stros may be able to bob and weave through a five game series with this bunch. However, in the longer seven game series in the LCS and the World Series, that lack of quality depth might get exposed. Unless, of course, these fellas simply step up on this national stage and continue to improve as they have over the past couple of weeks. I’m through doubting this bunch of competitors.
Here are the Braves pitchers’ individual RSAA:
Jaret Wright 21
Antonio Alfonseca 14
John Smoltz 14
Horacio Ramirez 13
John Thomson 13
Juan Cruz 12
Kevin Gryboski 8
Paul Byrd 5
Russ Ortiz 4
Roman Colon 2
Chris Reitsma 2
Tom Martin 1
Dan Meyer 1
Tim Drew 0
Mike Hampton 0
Sam McConnell 0
C.J. Nitkowski 0
Armando Almanza -2
Will Cunnane -4
Jose Capellan -6
Travis Smith -9
Jaret Wright, the Braves first game pitcher against Clemens, has pitched basically as well as Oswalt this season, so he is darn good pitcher. But interestingly, the rest of the Braves staff is essentially a bunch of well above-average and just above average pitchers, but none which had the seasons of Clemens, Lidge or Oswalt. Thus, the depth of the Braves’ pitching gives them an advantage, but the starting pitching matchups for the first three games favor the Stros:
Game One: Clemens (32 RSAA) v. Wright (21 RSAA)
Game Two: Roy O (22 RSAA) v. Mike Hampton (0 RSAA)
Game Three: Brandon Backe (0 RSAA) v. John Thomson (13 RSAA)
So, despite the Braves greater depth in quality pitching, this is really a very even series based upon the production of the respective teams’ players at this time. That’s why small adjustments such as playing Lamb over Ensberg and perhaps giving the emerging Lane some swings for Bidg could be the difference between winning and losing this series. Here’s hoping that Manager Garner can continue to pull the right strings that he so effectively selected during the drive for the Wild Card playoff spot.
Now, here are some other observations on the final statistics from the regular season:

Although the Cubs pitching was the best in the National League by far, their hitting went into the tank. As the Stros climbed from an RCAA of 18 to 50 in the last week of the season, the Cubs’ RCAA fell from 17 to 2 during the same week. Say bye-bye, Sammy!

Although the Giants’ 90 RCAA was stout and second best in the league behind the Cards’ astronomical 152, they lost the Wild Card Playoff race because of their lack of balance. The Giants’ pitching staff’s RSAA was only 16. And even the Giants’ RCAA is somewhat deceptive because of how top-loaded it is — the incredible Barry Bonds had a league-leading RCAA of 152 alone!

And let’s take a look at the key players that the Stros traded away either before or during this season:

Billy Wagner: 10 RSAA or slightly better than Dan Miceli.

Octavio Dotel: 3 RSAA or about like Chad Qualls.

Richard Hidalgo: -20 RCAA or worse then Raul Chavez (19). Ugh!

John Buck: -9 RCAA or about like Adam Everett.

Inasmuch as the Stros essentially got Beltran in return for Dotel and Buck, even a numbskull could evaluate that as a good trade. However, GM Gerry Hunsicker and Stros’ owner Drayton McLane both came under severe media criticism for the Wagner and Hidalgo trades, which got rid of huge salaries on players of declining production. Those critical media types owe Messrs. McLane and Hunsicker an apology, but I doubt that they will even get an objective evaluation of the trades in the mainstream media, much less an apology. So it goes.

Another Enron-related plea deal

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Timothy DeSpain, Enron’s assistant treasurer from 1999 to 2002, was arraigned before a federal magistrate Tuesday and released on a $100,000 bond in connection with securities fraud criminal charges that he conspired with other Enron executives to present Enron’s financial picture in a false light to investors.
Late Tuesday, Mr. DeSpain entered into a plea agreement (his statement in support of the plea deal is here) in which he pled guilty to a single count of securities fraud in return for the Justice Department’s agreement to grant him immunity from prosecution for any other crimes that he committed at Enron or his subsequent employer so long as Mr. DeSpain truthfully testifies in Enron-related criminal trials and cooperates with the Justice Department’s on-going Enron criminal investigation.
According to the Justice Department criminal information pleading, Mr. DeSpain was in charge of keeping Enron in touch with credit-rating agencies and was involved in schemes intended to make Enron appear healthier than it was to pump and maintain investment-grade credit ratings. Low or below investment-grade credit ratings make it expensive for companies to borrow money, which was critical to Enron’s online energy trading business. Under his plea agreement, Mr. DeSpain alleged that, at the direction of Enron treasurers, he and others frequently misrepresented cash flow from operations in order to hide the nature of the transactions and benefit from the pumped-up credit rating.
Mr. DeSpain worked for three treasurers at Enron. Ben Glisan, who is currently serving a five year prison sentence after pleading guilty to one count of conspiracy to commit wire and security fraud in September 2003; Raymond Bowen, who resigned last week as Enron’s chief financial officer and treasurer and who has never been charged with a crime; and Jeffrey McMahon, who has never been charged with a crime, but whose name was recently mentioned by Michael Kopper during his testimony in the ongoing Enron-related Nigerian Barge criminal trial as Andy Fastow‘s proposed “fall guy” if Enron’s accounting treatment of the barge transaction were ever to fall apart.
Another transaction mentioned in Mr. DeSpain’s plea bargain involves Project Nahanni, an Enron deal that arose in 1999 when Enron was at least short of its cash flow target. Enron reported cash from the sale of Treasury securities as a result of Profect Nahanni, but Mr. DeSpain alleges in his plea bargain that he was aware of no business purpose for the transaction other than to create cash flow. As a result, Mr. DeSpain claims that Enron falsely advised credit agencies that Project Nahanni was the sale of a merchant asset rather than explaining the true nature of the transaction, which Mr. DeSpain contends would have undermined Enron’s credit rating.
Finally, in his plea bargain, DeSpain also alleges that he was involved in fraudulent conduct in connection with Enron’s “prepay” strategy where the company reported that it had sold an asset and generated cash, but did not disclose that it had incurred a future debt obligation. Mr. DeSpain alleges that Enron’s treasurers ordered him no to reveal to the credit rating agencies the true nature of the prepay transactions.
The Justice Department’s plea deal with Mr. DeSpain is consistent with the strategy for generating witness testimony that the prosecution is currently using in the Nigerian Barge trial. Four of the prosecution’s first six substantive witnesses in that trial intially denied any wrongdoing in connection with the transaction. However, after reaching plea bargains with the Justice Department, those witnesses now contend that they were involved in a coverup of an alleged “side deal” between Enron and Merrill Lynch. The prosecution contends that the alleged side deal, if disclosed to Enron’s auditors, would have required Enron to restate earnings that it booked from the transaction with Merrill Lynch.

R.I.P., Gordo Cooper

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Gordon Cooper, one of the original Mercury Space Program‘s astronauts, died of natural causes on Monday at his home in Ventura, California at the age of 77.
Mr. Cooper’s death leaves just three of the original seven Mercury astronauts still living — John Glenn, the former senator from Ohio, Walter M. (“Wally”)Schirra, and M. Scott Carpenter. Virgil I. (“Gus”) Grissom was one of three astronauts killed in a 1967 fire inside an Apollo capsule on the launching pad, and Donald K. (“Deke”) Slayton and Alan B. Shepard died of natural causes several years ago.
As the pilot of the last Mercury mission, Mr. Cooper was the last American astronaut to fly alone in space. His mission on May 15-16, 1963 covered 34 hours and 20 minutes, which was more than all five of the previous Mercury flights combined. When the automatic system that was supposed to control the descent of his Mercury capsule failed, Mr. Cooper took control manually and made a bull’s-eye landing just 7,000 yards from aircraft carrier that picked up the Mercury capsules.
Mr. Cooper subsequently flew a long mission in the Gemini Space Program in which he demonstrated that a trip to the moon was feasible. Mr. Cooper’s second and last trip into space was on Gemini 5, a two-man, eight-day mission in August 1965 that set a space endurance record of over 190 hours.
Among the many firsts in spaceflight that Mr. Cooper achieved was that he was the first person to sleep in space (seven and a half hours like a log, he reported). He was also the first astronaut to fly twice, and the first American to be televised from space.
Mr. Cooper was also immortalized in film by former Houstonian Dennis Quaid‘s excellent portrayal of him in the wonderful 1983 film of Tom Wolfe’s equally superb book, “The Right Stuff.” For anyone who grew up during the early days of the American space program, “The Right Stuff” is a must see. I recently watched it again with one of my teenage sons, and we thoroughly enjoyed watching how the original astronauts took enormous risks to do something that is considered commonplace by many in my son’s generation. I also enjoyed sharing with him many of the stories of the original Mercury astronauts that are now an essential part of Houston folklore.
Rest in peace, Gordo Cooper.

IRS demands a big tip from Brinker

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In this Form 8-K filing with the Securities and Exchange Commission today, Dallas-based Brinker International Inc. — the operator and franchiser of Chili’s Bar & Grill and a number of other popular casual-dining restaurants — said the Internal Revenue Service has demanded “the employer’s share of FICA taxes on unreported tips during the examination period totaling $31.4 million.” It is not clear from the statement in the filing whether the $31.4 million represents the taxes owed or the amount of unreported tips.
The company also disclosed that the the IRS is alleging that alleged that Brinker has failed to fulfill its obligations under a 1996 tip-reporting alternative-commitment agreement with the IRS and has retroactively revoked the agreement. As a result, the IRS is alleging that some portion of the unreported tips should have been treated as service charges subject to employment taxes. The proposed assessment is based on the assumption that the cash-tip reporting rate should have been about two percentage points less than the charge-tip reporting rate.
In the filing, Brinker asserted that it has complied with all of the terms of the January 1996 agreement and with the law pertaining to the employment-tax treatment of service charges, and that it is “vigorously” contesting the accuracy of the proposed assessment related to unreported tips.
Restaurant owners and their counsel should watch this situation carefully. Brinker is a big fish in the restaurant industry, and a successful IRS assessment on this issue will send shock waves through the industry.

Fannie Mae Enron?

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This Wall Street Journal ($) editorial examines the recent report issued by the Office of Federal Housing Enterprise Oversight (Ofheo) in regard to Fannie Mae‘s accounting machinations and what it found is troubling, to say the least.
By improperly delaying the recognition of income, Fannie Mae created a cookie jar of reserves and by improperly classifying certain derivatives, it was able to spread out losses over many years rather than recognizing them immediately. Accordingly, Fannie Mae’s managers in any quarter could reach into the cookie jar of reserves to compensate for poor results or add to it to lessen good ones. As the WSJ notes, this arrangement gave Fannie Mae “inordinate flexibility” in reporting the amount of income or expenses over reporting periods, which allowed it to manipulate earnings in order to hit target numbers for executive bonuses for Fannie Mae executives:

Ofheo details an example from 1998, the year the Russian financial crisis sent interest rates tumbling. Lower rates caused a lot of mortgage holders to prepay their existing home mortgages. And Fannie was suddenly facing an estimated expense of $400 million.
Well, in its wisdom, Fannie decided to recognize only $200 million, deferring the other half. That allowed Fannie’s executives — whose bonus plan is linked to earnings-per-share — to meet the target for maximum bonus payouts. The target EPS for maximum payout was $3.23 and Fannie reported exactly . . . $3.2309. This bull’s-eye was worth $1.932 million to then-CEO James Johnson, $1.19 million to then-CEO-designate Franklin Raines, and $779,625 to then-Vice Chairman Jamie Gorelick.

The WSJ concludes:

Fannie Mae isn’t an ordinary company and this isn’t a run-of-the-mill accounting scandal. The U.S. government had no financial stake in the failure of Enron or WorldCom. But because of Fannie’s implicit subsidy from the federal government, taxpayers are on the hook if its capital cushion is insufficient to absorb big losses. Private profit, public risk. That’s quite a confidence game — and it’s time to call it.

2004 Weekly local football review

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Texans 30 Raiders 17. With the Stros winning the Wild Card playoff spot at the Juice Box downtown, the Texans did their part at Reliant Stadium to make Sunday a very good day for Houston sports fans. David Carr easily had his best game of the season as he was 14-22 for 238 yards, one TD pass in finding Andre Johnson as a secondary receiver on the play, no interceptions or fumbles, and 35 yards rushing on 8 carries. The Texans offensive line played well, protecting Carr sturdily and allowing third team running back Jonathan Wells to run for 105 yards. On the defensive side, the Texans were able to turn a Jamie Sharper sack into a TD and, while they did not ever really stop the Raiders’ offense, they did pick off three Kerry Collins‘ passes and force two fumbles. The high-scoring Vikings come to town next Sunday, so the Texans’ defense better plug the holes or else the Texans offense may need to score 40 just to stay in the game. Will the over/under on that game break 60?
Longhorns 44 Baylor 14. The Horns endured their final scrimmage of the pre-season before the real season begins next weekend in Dallas against Oklahoma. Although the Arkansas win from three weeks ago was a solid one, the three other teams that the Horns have played are not remotely comparable to Oklahoma’s talent level. Similarly, Oklahoma’s only reasonably tough game to date was this past weekend’s win over Texas Tech, which was not particularly impressive. So, to a certain extent, next week’s Red River Shootout will involve two talented, but largely unproven, teams. Although I think the addition of Dick Tomey to UT’s defensive coaching staff will improve that unit, I’m not sure that the improvement will be sufficiently developed at this stage of the season for the Horns to hold the Sooners under 28 points, which I think is a requirement of beating them. And the Horns still have to figure out now to deal with the fact that the Sooners head coach Bob Stoops is a far superior game day tactician to UT’s head coach Mack Brown.
Texas Aggies 42 Kansas State 30. This was a strange game. The Aggies really never stopped Kansas State, but four Wildcat turnovers allowed the Ags to have a short field for several of their scoring drives. Moreover, the Wildcats were behind for much of the game by double figures, so they abandoned their potent rushing attack behind Darren Sproles, despite the fact that it appeared to be working quite well. Nevertheless, with two and a half minutes to go, the Wildcats were driving the ball in Aggie territory and down only 35-30. Then, the KSU coaching staff inexplicably makes several questionable play calls and, for one of the only times in the game, the Aggie defense holds and KSU turns the ball over on downs with a minute and a half to go. As the Ags are running out the clock, Reggie McNeal takes off around left end and scoots 62 yards for a TD to put the game away. The Ags travel to Ames, Iowa next Saturday to play the Iowa State Cyclones, who are coached by my old friend Dan McCarney.
Memphis 41 Houston 14. On their way to a 1-6 record, the Coogs lay an egg against a good Memphis team. The problem with junk offenses such as the one the Coogs run is that, once the opposition’s defensive coordinators have seen it, they make adjustments and force the offense to do something else. If the junk offense does not have something else that it can do well, then it gets ugly in a hurry, and that’s where the Coogs find themselves now. Art Briles‘ second season is quickly turning into a rocky one. The Coogs play Southern Miss next on this week’s ESPN Thursday night football.
San Jose State 70 Rice 63. When I first heard this score, I thought that Rice’s basketball season had started early. The Owls uncharacteristically blew leads of 34-7 and 63-49, and somehow figured out a way to lose despite gaining 634 yards. In case the Owls had any doubts that their decision to move to Conference USA is the correct one, the attendance at this game was only 4,000, which means that this game drew less than a large number of Texas high school football games each week. Rice plays SMU next Saturday night at Rice Stadium.
And remember that Kevin Whited has the best weekly review of Big 12 games over at PubliusTx.net.

Stros 2004 Review: A playoff drive for the ages

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The Stros charged into the playoffs on Sunday afternoon with their 18th consecutive home victory by beating the Colorado Rockies 5-3 to win the National League WildCard playoff spot.
The win capped an incredible late season turnaround for the Stros, who were a season-worst 56-60 on Aug. 14. From that point on, the Stros won 36 out of their next 46 games, which included a 12 game winning streak. They then closed the season out in a tight race with the Giants and Cubs by winning nine out of their last 10 and their final seven straight. The Stros now go to Atlanta for Game One of the National League Division Series on Wednesday against the Braves, who have eliminated Houston three times in the past seven postseasons. The first playoff game in Houston will be next Saturday, October 9.
Brandon Backe filled in admirably on Sunday for the ailing Roger Clemens, who came down with a stomach virus last night and could not pitch today as expected. Backe — who slept in today thinking that Clemens was starting and thus, did not learn that he was starting until a couple of hours before game time — pitched five strong innings and drove in the Stros’ first two runs.
After closer Brad Lidge‘s final pitch in the ninth, the Stros ran out of the dugout to meet near the mound for hugs and high-fives while red and white confetti rained down on the fans from the Juice Box roof.
Assuming he recovers from his stomach virus, Clemens is scheduled to pitch game one of the division series against the Braves, with Roy O slated to start game two. I will break down the matchup between the Stros and the Braves in a post in the next day or so.

“We’ll Getcha & Mangle Ya”

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New York-based Weil, Gotshal & Manges is a major international law firm that is particularly well-known in bankruptcy and reorganization circles. The firm is counsel for the debtors-in-possession in both the Enron and MCI/WorldCom reorganization cases, which are two of the largest chapter 11 cases in history. Over the past 20 years, Weil has built upon its reorganization expertise to become a well-regarded and well-balanced full service firm.
However, the firm’s nickname within the legal profession — which is the title of this post — makes fun of the firm’s traditionally high fees charged to its clients, and this New York Sunday Times article reports on two pending lawsuits against the firm that reflect another image problem at Weil and other big law firms — i.e., that the firm is more incentivized to make money than to protect the interests of its clients:

Weil Gotshal is embroiled in two lawsuits by former clients who contend that the firm breached its duty to provide them with its undivided loyalty, as state rules on ethics require. The cases – one by the owners of a luxury shop, now defunct, in the Mall at Short Hills, N.J., and one by the pop singer Michael Bolton – stem from very different circumstances. But each case is a cautionary tale for big law firms, experts say.

The fashion boutique’s allegations against Weil are particularly troubling:

[The owners of] Fashion Boutique of Short Hills [are pursuing] their contention that the law firm represented them in a suit against the fashion house Fendi even as it also agreed to represent Prada in another case. A few months earlier, Prada had teamed up with LVMH Mˆet Hennessy Louis Vuitton to buy a 51 percent stake in Fendi.
Weil Gotshal did not tell the owners, Annette C. Fischer and her daughter, Randi Fischer, that it was also representing Fendi’s new owner until seven months after it started working with Prada; by then, a jury was already deliberating the Fischers’ contention that Fendi had used unfair business practices to run them out of business to protect its new flagship store on Fifth Avenue in Manhattan. In the case against Weil Gotshal, Fashion Boutique is seeking $15.5 million, an estimate of the value of lost business.

Despite these troubling allegations, Weil, Gotshal is not shying away from the fight — the firm has asserted a counterclaim against the firm’s former clients in the Fashion Boutique lawsuit for $2.7 million in unpaid attorneys’ fees.
And Mr. Bolton’s allegations against the firm stem from the firm’s attempt to represent the conflicting interests of co-defendants who have potential claims against each other if the claim against them is established:

Mr. Bolton . . . sued Weil Gotshal in New York Supreme Court in Manhattan last December, seeking $30 million. The firm had defended him, along with his publisher, Warner-Chappell Music Ltd. of Britain, and his record label, Sony Music Entertainment Inc., in a 1994 suit contending that Mr. Bolton had infringed someone else’s copyright with his 1991 hit “Love Is a Wonderful Thing.” When a jury found that the song was too much like a 1964 tune of the same name by the Isley Brothers, [Mr. Bolton and the other defendants] were ordered to pay more than $5 million in damages. Mr. Bolton, however, soon learned that he was personally responsible for the entire judgment because his contracts with both Warner-Chappell and Sony said that he would indemnify them in the event of a judgment of copyright infringement.

Expect both of these cases against Weil to be resolved or settled before trial. If Weil cannot resolve the cases through summary judgment, then the firm will not risk allowing a jury to tabulate the damages against the firm. Jurors tend to get out their calculators when assessing damages against a law firm defendant.