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www.FulkersonLotz.com
The Good, The Bad And The Ugly…
November 29, 2012
Trying Cases With Really Bad Documents
Stored
Dealings Become Data
Backed-up
Information is Generated and
Shared Abundantly
Made Someone Else’s
Responsibility
Mixed Use Development –Condominiums, Retail and
Apartments
35 Investors, $3 million each = $105 million totalStarted 2005, Target Completion Date = July
1, 2007
ACCOLLC
$25 Million in Additional Funding
RequiredCompletion Date Pushed from July, 2007 to Dec.
31, 2008
Permitting Problems Liquidity Crisis
Construction Delays
Cost Overruns
Bad General Cont.
ACCOLLC
Mixed Use Development –Condominiums, Retail and
Apartments
The Investors Sue Acco
• Breach of Contract
• Negligence
• Breach of Fiduciary Duty
• 5 Types of Fraud
There might be some bad
documents, but they’re mostly
privileged.
General Counsel for
Acco
ACCOLLC
Bad doc #1
Permitting Problems
ACCOLLC
Bad doc #1, con’t
Permitting Problems
No reply from Anderson . Expenses
passed on to investors
Permitting Problems
Bad doc #2
ACCOLLC
General Contractor
Bad doc #3
ACCOLLC
General Contractor
Bad doc #3, con’t
ACCOLLC
General Contractor
Bad doc #4
ACCOLLC
Construction Delays
Bad doc #5
ACCOLLC
Construction Delays
Bad doc #5 con’t
ACCOLLC
Liquidity Crisis
Bad doc #6
ACCOLLC
Bad doc #6 con’t
Liquidity Crisis
Do I have all the bad docs? Are there more?
Are the bad docs privileged?
What explains these documents?
Transcendent facts?
Obtain full client acknowledgement and a commitment to full production
Discover and test
Orient witnesses to
state the case
Calling All Documents
Privileged
Err on the Side of Production
Avoid the Worst Case Scenario
Motions to Strike governed by TransAmerican
Leading cause of sustained death penalty sanctions is document withholding and/or destruction
Court infers that if you could stand production, you would have produced.
Test Neutral or Positive Explanationsfor reasonableness and acceptability
to your fact finder
Transcendant Facts Make Bad Documents Irrelevant
Opposition knew and approved
They do the same things
Refused a fair “out” when offered
The project or product was doomed anyway
Testing Explanations
Familiar with all bad documents
Acknowledge if/when necessary
Path to positive explanations, transcendent facts
Witness Preparation
Don’t over-explain
Don’t hide
Explain early and well, give transcendent facts
Over-prove, prove through others
Bad Document Cases Are Hard. Good Counsel is Crucial.
Fight or Flight? If Flight, do so early.
Test explanations, transcendent facts
All on the same game plan
Explain without flinching