- Summary
- Law firms
- Guo sued in 2017 over $88 million in loans
- Cahill's representation of Guo's opponent raised 'red flags,' judge said
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(Reuters) - A judge in New York State court on Friday disqualified U.S. law firm Cahill Gordon & Reindel from representing an Asia-focused investment fund in litigation against Chinese billionaire businessman Guo Wengui.
At the end of a two-hour hearing on Friday, New York County Supreme Court Justice Barry Ostrager granted a motion by GTV Media Group, a media company affiliated with Guo that is a former Cahill client, to disqualify the firm. Guo, also known as Miles Kwok, also sought the disqualification.
"In the long run, it’s in the interest of judicial economy, certainty, and appearance of propriety for Cahill to be not involved in the further prosecution of this case," Ostrager said.
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Cahill's representation of Guo's opponent in the case, the Pacific Alliance Asia Opportunity Fund, raised "red flags," Ostrager said. The fund is suing Guo for allegedly borrowing $88 million between 2008 and 2011 and not paying it back.
"The worst thing that could happen in this case is for it to be prosecuted another year and then for GTV and for Mr. Kwok to successfully argue that Cahill should have been disqualified," Ostrager said.
Pacific Alliance's lawsuit against Guo was filed by attorneys at O'Melveny & Myers in 2017. One of them, New York litigator Edward Moss, left O'Melveny for Cahill in October, but continued to work on the case. O'Melveny partner Stuart Sarnoff is co-counsel with Moss.
Guo and GTV successfully argued Cahill cannot represent the fund due to its past work for GTV. The firm represented GTV as the media group was being investigated by the New York Attorney General and the U.S. Securities and Exchange Commission.
In September, the SEC settled charges of illegal stock and digital asset sales with GTV and two other companies affiliated with Guo for more than $359 million.
Moss and Sarnoff did not respond to a request for comment, nor did attorneys representing GTV. John Siegal, a BakerHostetler partner representing Guo, declined to comment.
The case is Pacific Alliance Asia Opportunity Fund L.P. v. Kwok Ho Wan, et al., New York County Supreme Court, Index No. 652077/2017.
For Pacific Alliance: Stuart Sarnoff of O'Melveny & Myers; Edward Moss, Lauren Riddell, and David Januszewski of Cahill Gordon & Reindel.
For Guo Wengui: Jillian Searles and Mark Harmon of Hodgson Russ; and Melissa Carvalho, Erica Barrow and John Siegal of BakerHostetler
For GTV Media Group: Nicole Hyland, Ronald Minkoff and Jesse Klinger of Frankfurt Kurnit Klein & Selz
Read More:
Billionaire Guo Wengui wants Cahill disqualified in investor fight
U.S. SEC fines Guo Wengui-linked media firms for illegal securities offerings
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David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at [email protected] and on Twitter @DaveThomas5150.