Final e-mail exchange on this front. Talk to you at 2:00:
James C. McCarroll
jmccarroll@reedsmith.com
Reed Smith LLP
Direct Tel.: 212-549-0209
Main Line: 212-521-5400
Facsimile: 212-521-5450
599 Lexington Avenue
New York, New York 10022
View Bio
-----Original Message-----
From: McCarroll, James C.
Sent: Friday, October 26, 2007 9:09 AM
To: 'cmeyering@scienscapital.com'
Cc: Karides, Constantine; Gotthoffer, Lance
Subject: Re: Tonight's Discussion
Chris-
I agree with you that Harvey has put us in a difficult position, but I cannot, based upon my limited information, agree that he is a reasonable or serious businessman. All I know about Harvey is that he was a very successful government employee (which, having been a government employee, and having interacted extensively with government employees at all levels, I can attest does not necessarily translate into satisfying any of those descriptive words), and that he has not behaved in a particularly reasonable or serious manner in most of our interactions with him to date.
I believe our mutual assumptions last night regarding what changed Harvey's tune likely are correct: he was disappointed, and probably alarmed, by Bear's reaction to his call, and as documented in his e-mails, whatever description Dilenschneider provided of Panos, your firm, and Reed Smith, did not sit well with him. There may be more to the story -- certainly with regard to his communications with Bear -- and we can inquire. I am not sure such inquiry will be productive, but I am fine with participating in making it. I make one recommendation in that regard, and that is that any conversations with Harvey from today forward include at least two participants, to avoid any he said / she said problems, and to avoid any individual having the burden of recounting more of what we have both seen to be Harvey's bizarre statements to the group. For what it's worth, Harvey affirmed in our first call last night that he did not identify any of us to Bear, but I of course cannot guarantee what his affirmation is worth.
With regard to next steps, I think it is relatively easy for us to call the Skadden litigator to whom Harvey was referred, introduce ourselves, and simply state that we are making the call since outside counsel is now involved. Harvey's name may never come up in any other context, but in case it does, I think it is certainly worth our talking through how to handle it and formulating a fully considered, uniform approach.
Shall we take this up further at our 2:00 meeting? If you want to discuss earlier, I will be in meetings until 11:30, but am available in the office between then and 2:00.
I am copying Constantine and Lance on this e-mail, to bring them up to speed. May I forward it to Panos and Darren indyke as well, to ensure that we are all operating from the same information (I would give Darren a verbal download first)? Please let me know.
Thanks.
-Jim
----- Original Message -----
From: cmeyering@scienscapital.com <cmeyering@scienscapital.com>
To: McCarroll, James C.
Sent: Fri Oct 26 08:20:38 2007
Subject: Re: Tonight's Discussion
Jim
Before we terminate this I need to know what really happened here. Clearly there is more to the story than delays in drafting and wires not hitting his account when he wanted them. He is a reasonable, successful and serious business man that seemed to have had no problem representing us a few hours before this first email hit. Something changed his mind. What could that have been? As his clients he has put us in a horrible predicament.
First, he contacts at least two persons on the other side on our behalf. What did he and they say? Do they know who we are? How will it look that he was in one week and out the next. This very compromising if not damaging to our case.
Second, he leaves us on the battlefield on the eve of our first fight. Disregarding the ethical issues here, we are now without a major leg to our stool. From a practical matter we are back to square one with 8 days before the first meeting.
I want us to carefully consider our response. I'm likely to call him and ask what is really going on here. Has some information come to light which impacts our case? As his client, who has been abandoned at the alter, we have the right to know.
Chris
-----Original Message-----
From: "McCarroll, James C." <JMcCarroll@ReedSmith.com>
Date: Fri, 26 Oct 2007 00:50:48
To:<panos@famnyc.com>,<cmeyering@sciensam.com>
Subject: FW: Tonight's Discussion
Gentlemen-
See below. Without responding to each of the mis-statements in Harvey's bizarre list, I will note that I am particularly perplexed by his reference to delay in marking up his initial draft agreement, when in fact we got it back to him within 72 hours of our meeting in Greenwich, and then he sat on it for more than two weeks.
With your permission, I will simply respond tomorrow morning by accepting his resignation, and confirming that, but for the confidentiality provisions of the engagement letter, the letter is deemed void ab initio, and no party has any obligations to the other. Please confirm that I may transmit such an e-mail.
Thanks.
-Jim
________________________________
From: Harvey Pitt [mailto:Harvey@kaloramapartners.com]
Sent: Thu 10/25/2007 11:56 PM
To: CMeyering@Sciensam; McCarroll, James C.
Cc: John Sampson
Subject: FW: Tonight's Discussion
Dear Chris and Jim,
I'm sorry that tonight's discussion had to occur, and that my earlier e-mail this evening was viewed as an over-reaction. Let me state our concerns as clearly as possible:
1. We initially agreed to a fee of ½ the original amount quoted, plus a success fee, with the entire fixed portion of the fee payable-as is true of all our fees-before work started, and the success fee payable at set points.
2. We capitulated to your request that we divide the fixed fee into two tranches, slightly more than half payable upon the "Effective Date" of our agreement, and the remainder payable after three months.
3. The Effective Date was October 18th, a week ago today. We received a signed copy of the agreement October 23rd, two days ago. As you'll recall, I sent an e-mail when we hadn't received the signed retainer back for several days. This follows a pattern of not having received comments back on the original draft retainer promptly, as had been promised (and as I told Chris, that was what caused me to delay sending back my comments on your markup).
4. As of this evening, no wire transfer has taken place of the first tranche of the fixed fee.
5. In addition, I was told yesterday that there were problems-which I'm now informed by you have been resolved-regarding payment of Dilenschneider's fees to date. Although you stated that's none of our business, we don't agree. If another service provider believes it is having problems getting paid, that is very much our business. Beyond that, as I noted in my earlier e-mail this evening, DGI is critical to the success of any strategy we would employ.
6. I had also spoken to Chris personally, and indicated my concern that we hadn't been informed at the outset that certain of the investors didn't have direct ownership title in the hedge funds whose conduct is under challenge, necessitating seeking Bear Stearns' approval for a transfer of those interests. That was information that should have been conveyed to us at the outset of our discussions.
7. Chris recently responded to my concern about the lack of our receipt of a signed retainer agreement by pressing Jim to get us the signed retainer agreement. That was a matter of concern because it might have been thought to excuse payment of our retainer until the agreement was sent back.
8. My e-mail of tonight may be an over-reaction as you suggest, but I don't think so. It reflects our genuine concern that we're attempting to do things here counter to the way we do business with all our other clients. We are paid our entire fees upfront, before we start any work. I've already made calls on your behalf, and was set to travel to New York tomorrow morning for a meeting.
9. If I hadn't raised this issue, our fee would remain unpaid; indeed, even after our discussions this evening, I received no indication of when it would have been paid. Not once during our conversation did anyone say "the fee will be wired immediately" (which would have meant Friday).
10. As a professional and a businessman with limited capacity to take on new clients, I have to be comfortable with where things stand before agreeing to devote energy on a new matter. Because of the factors I've enumerated, we're not comfortable.
11. In addition, Jim indicated-and Chris confirmed-that both Chris and Panos were offended by my earlier e-mail of this evening. I'm sorry anyone was offended, which was not my intent, but I think our concerns are legitimate, and deserved a response on the merits, not a reaction that I'm raising matters (compliance with our retainer agreement's terms) that are offensive or referencing things (disputes about someone else's receipt of fees) that are none of our business.
12. That left us in the position of proceeding with a project that seemed to have all the makings of a disaster. We don't want to have to worry about our ability to get paid, getting critical information on a timely basis and whether we can all put tonight's reactions and discussions behind us.
For those reasons, I'm not coming to New York tomorrow. We prefer to consider our agreement terminated. We don't feel comfortable with where we are thus far, and we don't think my reaction was an over-reaction. When people sign an agreement to make a payment by a date certain, and then don't, and leave us without any firm date to receive the amounts outstanding, concerns naturally arise. In our view, those concerns lead us to believe both you and we will be better off ending this relationship before it begins.
Naturally, we wish you all success in your efforts.
Best,
Harvey
Harvey L. Pitt
Kalorama Partners, LLC
1130 Connecticut Ave., NW
Suite 800
Washington, DC 20036-3915
(202) 721-0000 (office)
(202) 721-0007 ( office fax)
(202) 721-0008 (direct fax)
(202) 321-5045 (cell)
Harvey@KaloramaPartners.com
www.KaloramaPartners.com <http://www.kaloramapartners.com/>
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| From: | McCarroll, James C. <JMcCarroll@ReedSmith.com> | |
| Subject: | FW: Tonight's Discussion | |
| Date: | Fri, 26 Oct 2007 16:41:48 GMT | |
| To: | dkiesq@aol.com | |
Second e-mail from Harvey, with my
thoughts:
James C.
McCarroll
jmccarroll@reedsmith.com
Reed Smith LLP
Direct Tel.: 212-549-0209
Main Line:
212-521-5400
Facsimile: 212-521-5450
599 Lexington
Avenue
New York, New
York 10022
View
Bio
Gentlemen-
See below. Without responding to
each of the mis-statements in Harvey's bizarre list, I will note that
I am particularly perplexed by his reference to delay in marking up his initial
draft agreement, when in fact we got it back to him within 72 hours of our
meeting in Greenwich, and then he sat on it for more than two weeks.
With your permission, I will simply respond
tomorrow morning by accepting his resignation, and confirming that, but for the
confidentiality provisions of the engagement letter, the letter is deemed void
ab initio, and no party has any obligations to the other. Please confirm
that I may transmit such an e-mail.
Thanks.
-Jim
From: Harvey Pitt
[mailto:Harvey@kaloramapartners.com]
Sent: Thu 10/25/2007 11:56
PM
To: CMeyering@Sciensam; McCarroll, James C.
Cc: John
Sampson
Subject: FW: Tonight's Discussion
Dear Chris and
Jim,
I’m sorry that tonight’s
discussion had to occur, and that my earlier e-mail this evening was viewed as
an over-reaction. Let me state our concerns as clearly as
possible:
1.
We initially agreed to a fee of ½ the
original amount quoted, plus a success fee, with the entire fixed portion of the
fee payable—as is true of all our fees—before work started, and the success fee
payable at set points.
2.
We capitulated to your request that we
divide the fixed fee into two tranches, slightly more than half payable upon the
“Effective Date” of our agreement, and the remainder payable after three
months.
3.
The Effective Date was October
18th, a week ago today. We received a signed copy of the
agreement October 23rd, two days ago. As you’ll recall, I sent
an e-mail when we hadn’t received the signed retainer back for several
days. This follows a pattern of not having received comments back on the
original draft retainer promptly, as had been promised (and as I told Chris,
that was what caused me to delay sending back my comments on your
markup).
4.
As of this evening, no wire transfer has
taken place of the first tranche of the fixed fee.
5.
In addition, I was told yesterday that
there were problems—which I’m now informed by you have been resolved—regarding
payment of Dilenschneider’s fees to date. Although you stated that’s none
of our business, we don’t agree. If another service provider believes it
is having problems getting paid, that is very much our business. Beyond
that, as I noted in my earlier e-mail this evening, DGI is critical to the
success of any strategy we would employ.
6.
I had also spoken to Chris personally,
and indicated my concern that we hadn’t been informed at the outset that certain
of the investors didn’t have direct ownership title in the hedge funds whose
conduct is under challenge, necessitating seeking Bear Stearns’ approval for a
transfer of those interests. That was information that should have been conveyed
to us at the outset of our discussions.
7.
Chris recently responded to my concern
about the lack of our receipt of a signed retainer agreement by pressing Jim to
get us the signed retainer agreement. That was a matter of concern because
it might have been thought to excuse payment of our retainer until the agreement
was sent back.
8.
My e-mail of tonight may be an
over-reaction as you suggest, but I don’t think so. It reflects our
genuine concern that we’re attempting to do things here counter to the way we do
business with all our other
clients. We are paid our entire fees upfront, before we start any
work. I’ve already made calls on your behalf, and was set to travel to New
York tomorrow morning for a meeting.
9.
If I hadn’t raised this issue, our fee
would remain unpaid; indeed, even after our discussions this evening, I received
no indication of when it would have been paid. Not once during our
conversation did anyone say “the fee will be wired immediately” (which would
have meant Friday).
10.
As a professional and a businessman with
limited capacity to take on new clients, I have to be comfortable with where
things stand before agreeing to devote energy on a new matter. Because of
the factors I’ve enumerated, we’re not comfortable.
11.
In addition, Jim indicated—and Chris
confirmed—that both Chris and Panos were offended by my earlier e-mail of this
evening. I’m sorry anyone was offended, which was not my intent, but I
think our concerns are legitimate, and deserved a response on the merits, not a
reaction that I’m raising matters (compliance with our retainer agreement’s
terms) that are offensive or referencing things (disputes about someone else’s
receipt of fees) that are none of our business.
12.
That left us in the position of
proceeding with a project that seemed to have all the makings of a
disaster. We don’t want to have to worry about our ability to get paid,
getting critical information on a timely basis and whether we can all put
tonight’s reactions and discussions behind us.
For those reasons, I’m
not coming to New York tomorrow. We prefer to consider our agreement
terminated. We don’t feel comfortable with where we are thus far, and we
don’t think my reaction was an over-reaction. When people sign an
agreement to make a payment by a date certain, and then don’t, and leave us
without any firm date to receive the amounts outstanding, concerns naturally
arise. In our view, those concerns lead us to believe both you and we will
be better off ending this relationship before it begins.
Naturally, we wish you
all success in your efforts.
Best,
Harvey
Harvey L.
Pitt
Kalorama
Partners, LLC
1130
Connecticut Ave., NW
Suite
800
Washington, DC
20036-3915
(202)
721-0000 (office)
(202)
721-0007 ( office fax)
(202)
721-0008 (direct fax)
(202)
321-5045 (cell)
Harvey@KaloramaPartners.com
www.KaloramaPartners.com
* * *
This E-mail, along with any attachments, is considered confidential and may well be legally privileged. If you have received it in error, you are on notice of its status. Please notify us immediately by reply e-mail and then delete this message from your system. Please do not copy it or use it for any purposes, or disclose its contents to any other person. Thank you for your cooperation.
* * *
To ensure compliance with Treasury Department regulations, we inform you that, unless otherwise indicated in writing, any U.S. Federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or applicable state and local provisions or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.
Disclaimer Version RS.US.1.01.03
pdc1
