BOSTON–LAWFUEL – The Legal Newswire – Thomas H. Lee Partners, L.P. (“THL Partners”) announced today that Thomas H. Lee Equity Fund V, L.P. (“the Fund”) has filed a lawsuit in the United States District Court for the Southern District of New York against Mayer, Brown, Rowe & Maw LLP (“Mayer, Brown”) in connection with the law firm’s representation of Refco. The suit details how Mayer, Brown knowingly misled the Fund and knowingly allowed its clients to lie in disclosures, representations and warranties made to the Fund.
The complaint cites numerous specific instances of Mayer, Brown’s involvement in transactions between Refco and related parties effected between February 2000 and August 2005, each of which was virtually identical in structure and timed across year-end and later quarter-end reporting with the intent to hide undisclosed related party transactions.
The suit alleges that Mayer, Brown, as Refco’s counsel responsible for negotiating and drafting the documents, failed to disclose its knowledge of these sham loan transactions to the Fund during the Fund’s 9-month due diligence review for the acquisition of Refco, and that Mayer, Brown endorsed its clients’ representation that no related-party transactions existed at precisely the time a Mayer, Brown lawyer involved in the diligence process was drafting the documents that effected one such sham transaction. Further, Mayer, Brown drafted documents that made, and allowed its clients to make, representations and warranties to the Fund and others that were false and that it knew were false.
The suit seeks to recover damages of at least $245 million.
THL Partners issued a statement which said, “We have filed this lawsuit as part of our continuing effort to aggressively pursue claims against the parties responsible for defrauding us. We previously filed claims against other culpable parties, including former Refco executives Bennett, Maggio and Grant. We also intend to file a claim against Grant Thornton, Refco’s auditor, and are actively evaluating potential claims against other parties.”
About Thomas H. Lee Partners, L.P.
THL Partners is one of the oldest and most successful private equity investment firms in the United States. Since its founding in 1974, THL Partners has become the preeminent growth buyout firm, raising approximately $20 billion of equity capital and investing in more than 100 businesses with an aggregate purchase price of more than $125 billion and generating superior returns for its investors and partners. Notable transactions sponsored by the firm include Houghton Mifflin, National Waterworks, Univision, The Nielsen Company, West Corporation, Fidelity National Information Services, Dunkin Brands, Fisher Scientific, Experian, Snapple Beverage and ProSiebenSat.1 Media.