Delaware Courts Played by a Law Firm That’s Paying $11 Million to Avoid Ukraine Lawsuit!
If you’re a regular reader of my columns, you’ll notice I’m not a fan of law firm Skadden Arps, largely because of what I’ve chronicled in my coverage of the Chancery Court over the past few years. My research and writing on this topic have shown, in my opinion, that Skadden has an inordinate influence on the goings-on at the Chancery Court and I find that to be a cause for what I perceive as many imbalances at the court.
I’ve seen articles dating back to 1996 in the New York Times addressing how the firm has an influence on Delaware’s equity court, which appears to me to be often quite biased with appearances of impropriety, from what I’ve read. And now this weekend, the New York Times has a shocking story that once again proves my deep skepticism and instincts on this firm have been absolutely spot on!
Skadden — which has a huge office in Wilmington — has paid $11 million or more to avoid a lawsuit by a former Ukrainian prime minister, who blamed the firm for aiding in her political persecution, according to the New York Times. This is connected to the firm’s representation of the Russia-aligned government of the president of Ukraine starting in 2012, the Times story said, adding that this news had not been previously reported.
There have been so many stories on this firm over the past few years, including a partner being convicted for child pornography, and disbarred. That one takes the cake, folks, but this $11 million being paid to avoid a lawsuit and in the Ukraine, which has been in quite a controversial mix of quicksand in U.S. politics in the past year between President Trump and Delaware’s Joe Biden and his son, is indeed significant.
How does this firm continue to operate in Wilmington, without any of our legislators or our Bar Association taking a closer look at what’s going on there? And how on God’s green earth does this firm continue to have undue influence on America’s #1 Chancery Court?! If it looks like a duck and walks like a duck, as the saying goes… folks, in my opinion, this firm cannot and should not be trusted and certainly should no longer be allowed to have an open-door of influence in Delaware, with no one in power at least checking under the hood to find out what’s really going on.
As I have mentioned frequently in the past, Chancellor Andre Bouchard was once a member of that law firm. Are we going to let ourselves be pushed around here in Delaware? Are we going to be played like a fiddle in our Court System, while this firm continues to have its way.
I think not and I’d love to hear if you think not too! Let me know what you think and let’s reach out to our state representatives and let them know that this will no longer be tolerated in our state!
Judson Bennett-Coastal Network
Skadden Said to Have Paid $11 Million to Settle Ukraine Dispute
The law firm paid a former Ukrainian prime minister, Yulia V. Tymoshenko, and an associate to avert a suit over its role in a report justifying her imprisonment by a political rival.
By Kenneth P. Vogelo May 10, 2020
WASHINGTON — The New York-based law firm Skadden, Arps, Slate, Meagher & Flom has paid $11 million or more to avoid a lawsuit by a former Ukrainian prime minister, Yulia V. Tymoshenko, who blamed the firm for aiding in her political persecution.
The settlement, which has not been previously reported, is related to the firm’s representation starting in 2012 of the Russia-aligned government of Viktor F. Yanukovych, then the president of Ukraine.
Skadden’s Ukraine work, which has already led to federal investigations and steep fines, centered around a report produced by the firm that Mr. Yanukovych’s allies used to try to justify his government’s treatment of Ms. Tymoshenko, a leading rival of Mr. Yanukovych. She was imprisoned starting in 2011 on abuse of office charges that the international community widely condemned as politically motivated.
After Mr. Yanukovych’s government fell in 2014 amid street protests against its corruption and pivot toward Moscow, Ms. Tymoshenko was freed from prison and began plotting a comeback, as well as retribution against Mr. Yanukovych and those she believed enabled him, including Skadden.
In a December 2018 interview with The New York Times in Washington, she recalled “it was very painful” learning of Skadden’s work “when I was in prison and was observing this in solitary confinement.”
Speaking through an interpreter, she accused Skadden’s lawyers and other prominent Westerners of “whitewashing Yanukovych and his government” in exchange for money, adding: “It’s a pity that such a well-known company like Skadden even considered to take this case to deliver. This is a dirty, dirty, dirty contract.”
After the interview, she and her lawyer, Sergei Vlasenko, who has also claimed he was treated unfairly by the Yanukovych government, retained the law firm Reid Collins & Tsai to explore the possibility of suing Skadden over its work, according to two people familiar with the arrangement.
Skadden paid $11 million or more to settle the case before a lawsuit was filed, according to people familiar with the settlement. Funds from the settlement appear to have been passed through Reid Collins to Ms. Tymoshenko and Mr. Vlasenko.
That arrangement appears to be reflected in records filed by Ms. Tymoshenko and Mr. Vlasenko with the Ukrainian government, which show that they each received about $5.5 million from Reid Collins between July and last month.
The records do not mention Skadden. In his filings, Mr. Vlasenko characterized the money as “foreign income.” Ms. Tymoshenko described it in a filing this month as “compensation for the damage caused by the political repression of 2011-2014, which was received in the United States at the stage of precourt settlement.”
The payments come after Skadden paid $4.6 million last year to settle an investigation by the Justice Department into whether its work for the Yanukovych government violated foreign lobbying laws.
The firm subsequently revealed in filings with the Justice Department that it had been paid a total of more than $5.2 million for its work, with $4.15 million coming from a Ukrainian oligarch and his American lobbyist, and $1.1 million coming from the Ukrainian Justice Ministry. As scrutiny of the work mounted in 2017, Skadden returned $567,000 to the Ukrainian government, The Times revealed.
One of the lawyers who assisted with the report, Alex van der Zwaan, admitted to lying to federal investigators that year about his communications related to the firm’s work for Mr. Yanukovych’s government.
The lead Skadden lawyer on the Ukraine account, Gregory B. Craig, a former White House counsel for President Barack Obama, was acquitted last year of a felony charge that he lied to federal authorities about the work. And Paul Manafort — who served as Mr. Yanukovych’s political consultant and recruited Mr. Craig and Skadden to work on the account — is serving seven and a half years in prison for financial and lobbying violations related to his work for Mr. Yanukovych.
The investigations of Skadden, Mr. Manafort and Mr. Craig were prompted by the special counsel’s investigation into interference in the 2016 election by Russia, and whether the country colluded with Donald J. Trump’s presidential campaign. Mr. Manafort had served as the chairman of the Trump campaign. While Skadden’s involvement with Mr. Manafort and the Russia-aligned government of Mr. Yanukovych predated the Trump campaign, the scrutiny made Skadden a poster child for the Justice Department’s crackdown on the type of lucrative, but shadowy, foreign work that had become a profit center for politically connected lawyers and consultants across Washington.
Skadden has continued to publicly defend its Ukraine work, casting the Tymoshenko report as a cleareyed, independent assessment that did not absolve Mr. Yanukovych of wrongdoing. The report concluded that while Ms. Tymoshenko’s trial violated some of her rights, her conviction was supported by the evidence presented at trial. And the report found no evidence that the prosecution was politically motivated.
But the settlement suggests that the firm is not eager to continue to publicly defend the report or its work in Ukraine.
Skadden did not respond to multiple requests for comment to its lawyers and public relations executives, including an email containing a detailed list of questions about the settlement. Mr. Craig declined to comment.
Mr. Vlasenko and Reid Collins did not respond to requests for comment.
Ms. Tymoshenko’s spokeswoman declined to answer questions about the settlement, but she pointed to a statement that the former prime minister posted on Facebook in which she wrote that the money came “from an entity in the U.S. at the stage of precourt settlement.”
In the post, Ms. Tymoshenko heralded the settlement as “further proof that my imprisonment in 2011-2014 was a political reprisal against me.” She added, “there will be no further details,” because of “legal restrictions in the case,” suggesting that the agreement might be subject to a confidentiality clause.
Reid Collins is known for pursuing malpractice cases against large legal and accounting firms on contingency, meaning it gets paid a percentage of settlements extracted from those firms, often before lawsuits are filed.
There is no record of a lawsuit by Ms. Tymoshenko or Mr. Vlasenko against Skadden.
But the European Court of Human Rights ruled in 2013 that Ms. Tymoshenko’s arrest and detention midway through her abuse of power trial in 2011 had been unlawful, unjustified and politically motivated. The ruling could have opened the door to a claim against Skadden under the Alien Tort Claims Act of 1789, which allows foreign nationals to sue in U.S. federal courts for violations of international laws or U.S. treaties.
Masha Froliak contributed reporting from New York, and Maria Varenikova from Kyiv.