Akin Gump Wins $151 Million Verdict for LOT$OFF Corporation
(San Antonio) -- On November 20, 1997, a jury returned a verdict of $151 million in damages against Chase Manhattan Bank and in favor of LOT$OFF Corporation. LOT$OFF was represented by Akin, Gump, Strauss, Hauer & Feld, L.L.P. Barry Chasnoff, a partner in Akin Gump’s San Antonio office, was lead counsel. Neel Lane, also a partner in Akin Gump’s San Antonio office, was second chair, along with associate Saul Perloff.
LOT$OFF Corporation, a publicly traded retail chain that prides itself on selling merchandise to the value-conscious consumer, initially sued eight individual and corporate defendants for securities fraud, common law fraud and conversion, in a case styled 50-OFF Stores, Inc. v. Banque Paribas (Suisse) S.A. et al., Civil SA-95-CA-159. The case arose from a failed securities transaction in which the purchaser, a Florida resident, misrepresented his identity and intentions, and obtained control of the 50-OFF stock before it was paid for. The stolen stock was being held at Chase Manhattan Bank. LOT$OFF (formerly 50-OFF Stores, Inc.) sued Chase Manhattan Bank, asserting that Chase agreed to hold the stock until 50-OFF was paid. Instead, Chase deposited the stock into the account of a Swiss bank which had a relationship with the bogus buyer. When 50-OFF learned the stock had been mishandled by Chase, 50-OFF contacted Chase -- before any of the stock had been removed from the account -- and alerted them to the fact that the stock had been mishandled. Chase took no corrective steps, and allowed the stock to be sold. 50-OFF sued Chase, the Swiss Bank and others responsible for the loss. All other defendants settled or were defaulted before or during trial. Chase Manhattan Bank was the sole defendant against which a verdict was entered. The jury awarded approximately $13 million in actual damages, and punitive damages of $138 million.
“We told the jury that Chase Manhattan had ignored the pleas of 50-OFF not to let its stock be stolen and had violated its own procedures and industry customs, resulting in the loss of 50-OFF’s stock,” said Barry Chasnoff. “The jury apparently agreed. I asked the jury to send a message to Chase Manhattan that they need to treat all people fairly, whether or not they are a big customer. I think this jury of citizens has done that.”
The verdict is the largest ever awarded in the U.S. District Court for the Western District of Texas. The largest previous verdict in the Western District of Texas was an award of $87 million, obtained by Kinetic Concepts, Inc., which was represented by Larry Macon, also a partner in Akin Gump’s San Antonio Office.
Founded in 1945, Akin, Gump, Strauss, Hauer & Feld, L.L.P., a leading international law firm, numbers 675 lawyers with offices in Washington, Dallas, Austin, San Antonio, Houston, New York, Philadelphia, Los Angeles, Brussels, Moscow and London. The firm has a diversified practice and represents regional, national and international clients in a wide range of areas, including antitrust, banking and financial institutions; bankruptcy, reorganization and creditors’ rights; capital markets; communications; corporate and securities; employee benefits; energy; entertainment; environmental; food and drug; government contracts; health care; insurance; intellectual property; international; labor and employment; litigation; mergers and acquisitions; privatization; project finance; public law and policy; real estate; taxation; and trademark.