Highland Capital v. Leonard Schneider, et al.

Highland Capital Management sued Leonard Schneider, RBC Dominion Securities Corp., et al. for the Schneiders' refusal to complete a securities trade of subordinated promissory notes purchased by Highland pursuant to an oral agreement. Highland alleged that the Schneiders refused to settle the trade after receiving material non-public information from Jenkens & Gilchrist Parker Chapin, LLP.

According to Lackey Hershman:
"Lackey Hershman, LLP, obtained a $36 million judgment for its client Highland Capital Management, L.P., on March 10, 2008. The judgment was entered by Judge Peter K. Leisure in the United States District Court for the Southern District of New York and was based on a jury verdict rendered on March 6, 2008, following a three-week trial. The jury
awarded an additional $28.4 million to RBC Capital Markets Corporation, represented by Seward & Kissel, LLP, for a total jury verdict of approximately $64.5 million. The jury returned its verdict after only two and a half hours of deliberation. Judgment was entered against Leonard Schneider, Leslie Schneider Zabala, Susan Schneider, and Scott Schneider, the former owners and operators of Jeri-Jo Knitwear, Inc., and Jamie Scott, Inc.

Highland was represented at trial by Paul B. Lackey, Jamie R. Welton, and Kristen Miller Reinsch, from Lackey Hershman, LLP. RBC was represented at trial by Michael J. McNamara, Jack Yoskowitz, Mandy DeRoche, Kimberly White, and Thomas Ross Hooper, of Seward & Kissel, LLP. The Schneiders were represented by Alvin M. Stein, Katherine C. Ash, Allison Caire Aucoin, and Amos Alter, of Troutman Sanders, LLP, and formerly of Jenkens & Gilchrist Parker Chapin, LLP.

The case stemmed from the Schneiders' refusal to complete a securities trade of subordinated promissory notes purchased by Highland pursuant to an oral agreement. Highland alleged that the Schneiders refused to settle the trade after receiving material non-public information from Jenkens & Gilchrist Parker Chapin, LLP.

"The jury verdict leaves no doubt that oral agreements to purchase and sell securities are binding and enforceable under New York law," said Jamie R. Welton, a partner at Lackey Hershman who tried the case for Highland. Lead counsel for Highland, Paul Lackey, said, "The jury verdict and final judgment against the Schneiders is the result of years of hard-fought litigation and demonstrates Highland's unwavering commitment to litigate to judgment even the most difficult of cases."

In April 2007, New York's highest court concluded that the notes at issue in this case were "securities" as defined by Article 8 of the New York Uniform Commercial Code. See Highland Capital Management, L.P. v. Schneider, et al., 866 N.E.2d 1020 (N.Y. 2007). "This was an incredibly important case to the securities industry. This verdict validates the market's reliance on the integrity of its participants," said Mark Okada, Co-Founder and Chief Investment Officer of Highland Capital Management, L.P., who testified at the trial. "Lackey Hershman demonstrated an unmatched skill set in and out of the courtroom and tried the case with lethal precision," said Scott Ellington, Assistant General Counsel for Highland Capital Management, L.P.

Editor's Note: Supplemental information is available via e-mail upon request to Mary Montgomery at mary_montgomery@richards.com.

About Lackey Hershman, LLP

Lackey Hershman, LLP, litigates matters in state, federal, and appellate courts around the country. While the attorneys at Lackey Hershman, LLP, have litigated almost every imaginable type of case, Lackey Hershman, LLP, has particular expertise and experience in finance, hospitality, advertising, and contract disputes. Although Lackey Hershman, LLP's clients range from billion-dollar financial institutions to individual entrepreneurs, they have one thing in common - the desire for the most aggressive, creative, and effective representation in the country. Lackey Hershman, LLP's goal is to effectively, efficiently, and rapidly resolve its clients' problems, regardless of whether that resolution must take place in the public domain, the courts, the boardroom, or anywhere else. A litigation team from Lackey Hershman, LLP, accepts nothing less than finding the optimal solution to any client's problem, regardless of the size of the client, the opponent, or the problem.

About Highland Capital Management, L.P.

Highland Capital Management, L.P., is an SEC-registered investment adviser specializing in alternative fixed-income investment strategies. The firm manages over $38 billion in senior secured loans, high-yield bonds, structured products, mezzanine debt, and equities for a global institutional investor base. The firm is made up of a team of over 258 professionals, including over 127 investment professionals, in offices located in Dallas, New York, and London."

Plaintiff's verdict for $36 million.

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