Coberly Discusses Refco Fraud Case With Law360

Litigation partner Linda Coberly, who serves as vice chair of Winston & Strawn's appellate and critical motions practice group, was quoted in Law360's November 18 article, "2nd Circ. Affirms Toss Of Refco Trustee Fraud Claims."

In Kirschner v. KPMG LLP, the U.S. Court of Appeals for the Second Circuit upheld the dismissal of a lawsuit brought by a litigation trustee appointed in the bankruptcy of Refco Inc. against a variety of third-party professionals accused of assisting in or failing to detect a fraud by Refco's management. The suit was dismissed in its entirety because management's fraud must be imputed to Refco itself and, as a result, bars the trustee's claims. The Second Circuit's decision follows a decision by the New York Court of Appeals on a series of certified questions.

Ms. Coberly, who represents defendant Grant Thornton LLP, said that her client was pleased with the Second Circuit's ruling. "Issues like these have seen a lot of litigation in recent years, as companies embarrassed by the disclosure of corporate fraud have looked for ways to shift the cost of their wrongdoing entirely to third party professional advisors," she said. "The decisions rendered in this case are among the best-reasoned yet, affirming long-standing principles of law and striking an appropriate balance in terms of the incentives to detect and prevent corporate fraud."