A legal battle is raging on between Watchell and two partners against Carl Icahn over CVR Refining, a company that was once advised by Watchell but was ultimately taken over by Icahn. CVR is alleging Watchell committed malpractice by not informing the company that it would pay significantly higher fees if taken over by Icahn. CVR sought Watchell’s counsel on how to avoid the hostile takeover, but Icahn won.
Watchell denies malpractice and attempted to get the case dismissed, but was denied dismissal of the case by U.S. District Judge Richard Sullivan. CVR claims that Watchell did not explain the exact amount it would owe Deutsche Bank and Goldman Sachs $36 million. This was double the amount CVR expected and CVR says Watchell made up false minutes at a board meeting to disguise the fees.
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Watchell launched a counter suit against CVR and Icahn alleging a breach of a protective order and violation of Watchell’s personal information. Meanwhile, Deutsche Bank and Goldman Sachs are suing CVR for not paying fees of $18 million each. A judge determined that CVR was sufficiently aware of the fees, but CVR launched an appeal.
Watchell has called Icahn’s current lawsuit, “a scare tactic to intimidate those lawyers willing and able to help clients faced with Icahn’s opportunistic tactics.”
