Kirschner v. KPMG LLP, No. 09-2020 - U.S. Second Circuit
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Kirschner v. KPMG LLP, No. 09-2020

In an action brought by the trustee of a litigation trust, resulting from a bankruptcy proceeding, in which the trustee alleged misconduct by corporate insiders and advisers, the Court of Appeals certifies the following questions to the Court of Appeals of New York: 1) the over-arching question whether the allegations of the complaint in this case satisfied the "adverse interest" exception to the Wagoner rule of imputing insiders' misconduct to their corporation, and the following subsidiary questions subsumed within that ultimate question: 2) whether the adverse interest exception was satisfied by showing that the insiders intended to benefit themselves by their misconduct; 3) whether the exception was available only where the insiders' misconduct harmed the corporation; 4) if harm was required, whether the analysis of such harm could include any detriment to a corporation resulting from the eventual unmasking of the misconduct; 5) if harm was required, whether such harm could be determined by considering a corporation and its related corporations as a single enterprise; 6) if harm was required and was to be determined with respect to separate though related corporations, whether the complaint adequately alleged such harm; 7) whether the exception was precluded where the misconduct conferred some benefit upon the corporation; and 8) if the adverse interest exception were otherwise available, would it be precluded by the "sole actor" rule?

Read Kirschner v. KPMG LLP, No. 09-2020

Appellate Information

Heard: September 18, 2009

Decided: December 23, 2009

Judges

Opinion by Judge Newman

Counsel

For Appellant:

Kathleen M. Sullivan, Richard I. Werder, Jr., Sascha N. Rand, Sanford I. Weisburst, Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York, NY

For Appellee:

Linda T. Coberly, Winston & Strawn LLP, Chicago, IL

Kevin A. Burke, Gary Bendinger, Howrey, LLP, New York, NY