Verdicts & Settlements

The Concubines Litigation

The Firm represented a woman who was one of the concubines of a wealthy banker who died in Shanghai in the 1950s. The banker had a wife and a first concubine, as well as a second concubine, the Firm's client. This website's page on international litigation has a family portrait of the banker, his wife, his concubines and the children by them.

Both his wife and the first concubine had died before him. He had no children by his wife; he had a daughter by his first concubine and several children by his second concubine, all of whom survived him. And his fortune consisted of an unknown amount of blue-chip stocks and cash left in a bank account in New York City.

For forty years the daughter by the first concubine and the Firm's client wrote to the bank seeking possession of the securities and cash. The daughter of the first concubine claimed to be the daughter of the wife, thinking it gave her a leg up. But all to no avail: their lawyers kept advancing theories under New York law, which doesn't recognize the concept of a "concubine", and the bank simply ignored the letters. In the meantime, the stock in the bank account split multiple times, making the account worth millions of dollars.

The Firm took the case on a contingency fee basis, and sued the bank in federal court for turnover of the stock and securities. The bank then immediately deposited the contents of the account into the court's registry, and then called on all of the claimants to litigate against one another over the rightful owner.

In that context, the Firm cited the well-established principle that the rights to a decedent's estate are governed by the law of the place of the decedent's death-- i.e., China, not New York. Then, the situation became very fluid, because it was just a matter of determining what Chinese law said on the topic.

Fortunately, Columbia Law School has a very good library Chinese documents. In the basement of that library, the Firm found a book on rights of concubines, which included a discussion of a decision holding that each of the concubines were entitled to equal shares. At that point, the Firm hired an expert witness from the University of London's School of Oriental and Asian Studies to testify about the rights of concubines.

After several days of trial, the action settled when the Firm's client agreed to give the daughter of the first concubine twice what she was entitled to. Unfortunately, the Firm's client, who was in her nineties, died immediately after the settlement, and never got to enjoy any of the money she was entitled to. But her children received her share, and the money made a big difference in their lives. The Firm, of course, also did extremely well.


The Magazine Publisher

The Firm represented a magazine publisher in federal court on a contingency fee arrangement. The publisher claimed that that one of its vendors had overbilled it over a five year period. The overbilling amounted to only $200,000, but the Firm devised a theory that the overbilling had drained the publisher of so much working capital that it sent a multi-million dollar business into insolvency. On the basis of that theory, the Firm claimed $5 million in damages.

The vendor was represented by a junior partner at a big firm. Early on, the Firm suffered a setback when the judge dismissed all claims except for the $200,000 in overbilling. But the case approached trial, the junior partner at the big firm made the mistake of revealing that it had run up a bill of $500,000 and that trying the case would cost its client another $200,000.

And this illustrates an important principle: the outcome of sustained litigation is often determined by its economics. If your adversary is spending hundreds of thousands of dollars while your client is spending nothing, ultimately your adversary's legal bills will bring it to the table. So a litigant represented by a lawyer who has taken the case on a contingency-fee arrangement, and is willing to litigate for years, has an inherent advantage.

Thus, at the settlement conference on the eve of trial, the Firm threatened an appeal from the adverse ruling by the judgment. That in turn threatened years of additional litigation, and perhaps millions of dollars in additional legal fees for the vendor. At that point, the case settled for a high six-figure sum (the terms of the settlement are subject to a confidentiality agreement). The Firm earned a fee of almost $250,000.

The senior partner at the big firm was so incensed over the settlement that he refused to shake Pu's hand afterwards. That was a stupid mistake: if you're that unhappy about a settlement, don't show it. Doing so only gives your adversary confirmation that he got a really good deal for his client.


The Garment Importer

The Firm's represented a garment importer that imported leather garments from a manufacturer in China. The garments arrived late and the leather contained defects. That entitled the importer's own customers, such a department stores, to refused to accept the garments.

In the meantime, the manufacturer was threatening to sue the Firm's client in China, where it is doubtful that the importer could have gotten a fair trial. And once the manufacturer had obtained a judgment in China, it could bring it to New York to enforce by selling the importer's assets, or by requiring the importer's customers to pay the manufacturer rather than the importer.

To prevent that, the Firm immediately commenced a law suit in federal court against the manufacturer. As a practical matter, that prevented a law suit in China. There then ensued protracted litigation over whether the goods contained defects and, if so, how much money the importer had lost. Interestingly, the suit wasn't governed U.S. or Chinese law, but rather, by a multinational treaty called the Convention on Contracts for the International Sale of Goods.

In the course of the litigation, the lawyer for the manufacturer moved to withdraw. (The likely basis was that the manufacturer had stopped paying its lawyer or had failed to reimburse him for his expenses.) The motion was granted and the manufacturer ultimately defaulted. But that didn't automatically entitle the importer to a judgment.

That is, despite the manufacturer's default, the importer still had prove his damages. The Firm submitted a series of spreadsheets, copiously documented by the importer's books and records, showing lost profits, airfreight charges, credits due to the manufacturers. This resulted in judgments in favor of the importer totaling over $1 million.




The Debtor in Bankruptcy

    The Firm represented a creditor in a Chapter 7 bankruptcy proceeding.  Typically, such a proceeding culminates in the debtor being  discharged from all his debts, meaning that the creditor can no longer sue the debtor for the debt.
However, the Firm succeeded in preventing the Debtor from receiving his discharge in bankruptcy. 

Section 727 of the Bankruptcy Code sets forth the grounds for barring a debtor from receiving a discharge.  One of them is that the debtor must provide records that show his financial transactions and condition.

    Here, the debtor closed his business and vacated the premises.  But instead of taking his records with him, he left them behind.  That resulted in the next tenant throwing them away.  (The Firm suspected that this was a sly way of deliberately discarding records containing incriminating information, but under Section 727, it isn't necessary to prove a deliberate destruction of the records.)

    The Firm commenced a mini-law suit in the bankruptcy case called an "adversary proceeding".  At trial, the Firm presented evidence of the loss of the debtors' business records.  In a scathing decision, the Chief Judge denied the debtor a bankruptcy, permitting the creditor to sue the debtor after the bankruptcy proceeding.




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