On February 5, 2009, Davis Polk obtained summary judgment in the Eastern District of Louisiana on all claims brought against its client Credit Suisse, a day before the case was scheduled to go to jury trial in New Orleans. The case involved claims by the plaintiff that Donaldson Lufkin & Jenrette (DLJ), which was acquired by Credit Suisse in 2000, fraudulently induced him to loan $10 million to his company, Independent Energy (IE), in June 2000.
The facts of the case involve a $10 million unsecured loan by the plaintiff, subordinate to a £165 million credit facility that DLJ and a group of banks previously made to IE and was due to expire in September 2000. Plaintiff, the founder and former CEO of IE, was trying to salvage his company and in addition to his own loan, raised a further $65 million from friends allegedly on condition that the banks keep funding IE through its financial problems. DLJ, in addition to the credit facility, had also performed a number of financial services for IE. But after IE's liquidity problems worsened during the summer of 2000, and the banks decided not to extend its credit facility, IE entered insolvency proceedings. The bank group was repaid the entire amount of the credit facility through IE's bankruptcy proceedings, but plaintiff was not repaid his $10 million.
In 2005, plaintiff filed a complaint against DLJ and its corporate successor Credit Suisse. According to plaintiff, his making the loan and raising $65 million in additional funding was his part of an oral agreement with DLJ in June 2000, and that in return DLJ promised to continue funding the company through its financial problems. In March 2007, the lower court granted summary judgment in favor of DLJ, based on the Louisiana Credit Agreement Statute (LCAS), which requires all agreements between a creditor and a debtor to be in writing. In May 2008, the Fifth Circuit reversed on grounds that LCAS did not apply to this case because, based on the factual record before the court, plaintiff was not a debtor. On February 5, 2009, Davis Polk obtained summary judgment again, this time on grounds of prescription: plaintiff had waited too long to file his complaint in 2005, when he knew in October 2000 that he was not being repaid through IE's bankruptcy proceeding. The court had concluded that plaintiff had sufficient information to prompt further inquiry and timely prosecution of his claims and rights, and was barred by the statute of limitations from pursuing his claim.
The trial team included partner Lawrence Portnoy and associates Daniel S. Kahn, William R. Miller Jr., Wesley M. Mullen and George Turner. Former associates Lia N. Brooks and Miriam F. Ingber and summer associate Matthew Kelly also worked on this matter. Theresa Bruney was the legal assistant. All members of the Davis Polk team are based in the New York office.