By Cindy Krischer Goodman
Knight Ridder Newspapers
MIAMI _ The post-Enron world has given rise to a trendy legal specialty: the defense of companies accused of suspect accounting and insider self-dealing. At the top of the field is hot-shot New York attorney David Boies.
Competitors have contended that one man cannot handle as much business as Boies does and do it well. Enter Miami’s Zack Kosnitzky, a 27-lawyer firm that merged into the New York firm Boies Schiller & Flexner in March.
From his law offices in downtown Miami, Stephen Zack, a founder of the Miami firm, has deployed attorneys all over the country to assist Boies in the defense of corporate giants such as Adelphia Communications, Tyco International and Qwest Communications International.
Boies also represents Miami-based Spanish Broadcasting System in its antitrust suit against Clear Channel Communications and Hispanic Broadcasting Corp., which is being purchased by Univision.
At the same time, the Miami lawyers are preparing their case against a half-dozen HMOs in a high-impact suit that aims to reform America’s healthcare system.
In the last few months, Zack has sent lawyers to the Boca Raton offices of Tyco, under scrutiny for its complex accounting and the questionable financial dealings of its chief executive. He’s dispatched lawyers to Denver where Qwest Communications is facing a Securities and Exchange Commission inquiry into its accounting practices.
And he himself has traveled to Boies’ Armonk, N.Y. office to discuss litigation strategies.
“Our lawyers are reviewing documents, meeting with witnesses, gathering facts and helping to move these cases forward,” Zack said. “These are complex cases involving enormous amounts of money. We’re marshaling our resources to attack the issues quickly.”
Zack says his firm brought Boies Schiller much-needed manpower, expertise and exposure to the Florida market, and Boies brought high-profile business. The Boies Schiller firm now has 160 lawyers _ both litigators and corporate attorneys.
“We’re a good resource to them and them to us,” he said. “We did this deal to be involved in cutting edge litigation.”
Zack, the litigator who worked closely with Boies on behalf of Al Gore during the election recount in Florida, is the administrative partner in Miami. Boies is the lawyer who represented the government in its attempt to break up Microsoft on antitrust grounds and Napster in its losing battle with the record industry.
He probably would have been involved in the Enron defense too had he not agreed to represent Andrew Fastow, former chief executive officer of Enron, as a favor to one of Boies’ law partners.
And, it’s not just the Miami litigators who are involved in the big suits. Zack’s partner, corporate attorney Michael Kosnitzky, has been in the thick of it with Adelphia, the nation’s sixth largest cable TV operator.
Adelphia is facing questions about its accounting and accusations of insider abuse by the family of company founder John J. Rigas. Kosnitzky has spent recent weeks in the small town of Coudersport, Penn., with a handful of other corporate lawyers from Miami, helping the company get back as many assets as possible from the Rigas family. They purchased cable systems, stock, golf courses, timber, and an NHL hockey team with corporate borrowings.
Chris Boies, son of David Boies and head of the Boies Schiller & Flexner’s corporate practice, said the merger with Zack Kosnitzky brought his department more tax and accounting expertise, an area greatly needed in delving into corporate books.
“We didn’t have a tax department before them. Also, with Adelphia there are tremendous tax and accounting issues and they have both an accounting and a legal perspective,” he said.
Spanish Broadcasting System was an existing Boies client, but Zack said he has worked with other Hispanic media internationally for more than 30 years and will play a role in that case, filed earlier this month in Miami.
Meanwhile, legal experts predict that defending embattled corporations will become as hot a legal specialty as tech law was during the dot-com boom.
“There’s no question there’s an explosion of plaintiffs’ lawyers suing for professional malpractice and, on the other side, a cadre of defense lawyers making it their specialty to provide legal services to these companies,” said Bob Jarvis, a law professor at Nova Southeastern University.
“Lawyers are more creative in making claims against companies. Before if a company failed, it went into bankruptcy and that was the end of it. Now someone must be responsible, someone did something illegal or improper,” he said.
Jarvis believes more Florida law firms will participate in these cases. “More Fortune 500 business is being done here,” he said. “It’s not surprising the work would spread out and you would see lawsuits all over country.”
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