Objection to K&L Gates, Le-Nature's Accord Withdrawn

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K&L GATES

In his filing Tuesday, Kirschner had said the settlement agreement fully protected Pascarella & Wiker in the event that it was permitted under the law to assert a claim for contribution or indemnity against K&L Gates.

"The settlement and bar order would fully protect the P&W parties by affording them the same rights against the trustee, by means of a judgment reduction, that they would otherwise have had against the K&L parties in an action for contribution," Kirschner said.

Kirschner had also said that, under Pennsylvania law, "there is serious doubt as to whether the P&W parties would even have a right to contribution or indemnification by the K&L parties in connection with any contractual liability to the trustee."

Kirschner said the Griffin release was necessary to ensure K&L Gates receives "the full benefit of their bargain, and that they will not be forced to relitigate or be held liable a second time on account of settled liability."

Kirschner had said it isn't surprising that Pascarella & Wiker hadn't identified any case law discussing a Griffin release in the breach of contract context because it would appear modern Pennsylvania law does not provide for contribution or indemnity for contractual liability of the type alleged in this case.

"However, even if contribution and indemnity were available in the breach of contract context, the P&W parties' position would lead to the absurd conclusion that no bar order in a case involving more than one defendant could ever be approved if any contract-based claims remained pending against any nonsettling defendant," Kirschner had said. "Such a result would be inconsistent with the strong policy favoring settlement, and the reality that defendants 'buy little peace through settlement unless they are assured that they will be protected against co-defendants' efforts to shift their losses through cross-claims for indemnity, contribution, and other causes related to the underlying litigation.'"

K&L Gates hired Pascarella & Wiker to assist in an investigation K&L Gates had been hired to do in 2003 on behalf of a special committee of the board of trustees of Le-Nature's charged with looking into whether certain executives were mismanaging finances. Kirschner has argued in the state-court action that the firms' failure to detect any fraud allowed the fraudulent activity to continue for three more years until Le-Nature's went into bankruptcy in 2006.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI. •

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