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"Bank of New York in settlement talks with Russia"



An anonymous Russian government source was quoted as suggesting that a settlement of $800 million, or 4 cents on the dollar of the dubious $22 billion claim, would be adequate. Roger Parloff of Fortune is, as before, devastating about the "reasons why Russia's suit, which has extortionate overtones, must not be permitted to succeed":

...Last October the bank, at the U.S. Treasury's bidding, accepted $3 billion in TARP (Troubled Assets Relief Program) money.

Are taxpayers now going to watch more than a quarter of that money go to Russia to pay off a fishy-smelling suit? And even if taxpayers could stomach that, are they prepared to then see 29% of the $800 million -- $232 million -- pass through to American lawyer Steven Marks of Miami's Podhurst Orseck, who represents victims in many airplane crash cases and who has been Russia's contingent-fee trial counsel in the weird case? Court records show that that's what Marks's retainer agreement calls for him to receive. ... According to Columbia Law School professor Katherina Pistor, a 2007 ruling of Russia's highest constitutional court holds that contingent fees in judicial cases are contrary to Russian public policy and, therefore, unenforceable. If Marks' case is about vindicating Russia's laws, he should get zero.

Moreover, the Russian government's purported indignation at the rogue bank officer's actions "is of suspiciously recent origin"; when the case blew up a decade ago, "Russian officials downplayed the gravity of what she'd done, claiming that most of her transfers were lawful and that American officials and media were blowing the matter out of proportion." More: American Lawyer.

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Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.