Litigation
May 28, 2011
Bankruptcy Yields $112.5 million Payout on $350 million Verdict
A venture capitalist who won a hefty $350 million judgment over a business deal gone bad has agreed to settle for $112.5 million plus any money left over from the sale of the defendant's online credit card business.
Daily Journal Staff Writer
A venture capitalist who won a hefty $350 million judgment over a business deal gone bad has agreed to settle for $112.5 million plus any money left over from the sale of the defendant's online credit card business, bankruptcy court documents show.
Douglas Shooker of Auerbach Acquisition Associates Inc. - represented by Jennifer L. Keller and Pierce O'Donnell - won the judgment against credit card industry executive Gregory S. Daily in Los Angeles County Superior Court in 2009. It was the largest jury verdict recorded in the state that year.
Shooker accused Daily of stealing his idea for Internet-based credit card payments. After the verdict, Daily immediately filed for bankruptcy protection in Nashville and appealed.
Under terms of a settlement recently made public in bankruptcy court documents, Shooker will receive $112.5 million plus any money left after the sale of Daily's iPayment business.
Other creditors who will receive payments in the bankruptcy deal include Daily's defense lawyers from Morgan, Lewis & Bockius LLP, who will recover $1 million.
The appeal at the 2nd District Court of Appeal was withdrawn by the parties Thursday. Auerbach Acquisition Associates v. Daily, B219534.
Shooker had hired Richard A. Derevan of Snell & Wilmer to defend the judgment. Daily hired Barry R. Levy at appellate firm Horvitz & Levy LLP.
The settlement marked a bit of good news for O'Donnell, who is facing federal charges that he made $26,000 in illegal contributions to the 2004 presidential campaign of John Edwards. Meanwhile, Keller, of Keller Rackauckas LLP in Irvine, is fresh off another win for client MGA Entertainment in a billion-dollar lawsuit with Mattel over rights to the Bratz doll.
The attorneys involved in the case declined to comment on the settlement. href="mailto:
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Laura Ernden
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