Free Redacted Document - District Court of Delaware - Delaware

Case 1 :05-cv-00072-JJF Document 154 Filed 05/O3/2007 Page 1 of 3
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ATTORNEYS AND COUNSELLORS AT LAW Til-l¤PH¤N¢
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WILMINGTON, DELAWARE |9a~99
April 27, 2007
The Honorable Joseph J . Farnan, Jr. HAND DELIVERY
United States District Court
844 N. King Street
Wilmington, Delaware 19801
Re: Charles A. Stanziale, Jr., Chapter 7 Trustee of Student Finance Corp. v.
McGladrey & Pullen LLP, et al., Civil Action No. 05—72»J JF
Royal v. Pepper Hamilton, etal., Civil Action No. 05-165-JJF
Dear Judge Farnan:
As counsel for Royal Indemnity Company ("Roya1") in the above-referenced matters, we
write in response to the April 19, 2007 letter to Your Honor from Christopher M. Winter,
counsel to defendants McGladrey & Pullen, LLP and Michael Aquino, which, in turn, had
responded to Royal’s letter to the Court of April 18, 2007. A closer review of the
communications cited in Mr. Winters’ letter, as well as an application of common sense to these
facts, reveal precisely why it is appropriate for Your Honor to extend work product protection to
the communications previously identiiied by Royal and submitted for in camera review on April
18, 2007.
As is abundantly clear, Royal and the Trustee, in the months leading up to the conclusion
of their settlement agreement in October, 2004, simultaneously were (i) trying to reach a
settlement agreement in the Chapter 7 case, (ii) continuing to litigate against one another, and
(iii) working cooperatively in connection with third-party claims and litigation whose success
was in the mutual interest of both the Estate and Royal. Despite l\/lr. Winters’ suggestions to the
contrary, the fact that those efforts were ongoing simultaneously does not obviate the legal
privilege that should be afforded work product shared between parties who have a common
interest in the outcome of the third-party claims and litigation to which that work product relates.
As reflected in the communications produced to the defendants (including exchanged
drafts of the settlement agreement), by September, 2004, Royal and the Trustee already had
reached agreement on most of the essential elements of their settlement. At that time, and with
the statute of limitations for certain potential Estate actions running, the parties began to work in
earnest cooperation to ensure that valuable Estate causes of action would be preserved and
prosecuted appropriately. Those cooperative efforts included the exchange of legal analyses,
theories, and supporting evidence. Information was shared at that time with the fair expectation
that the Trustee and Royal were in a joint litigation posture with .respect to such matters, and that
their shared work product would be exempt from later discovery.

Case 1 :05-cv-00072-JJF Document 154 Filed 05/O3/2007 Page 2 of 3
Honorable Joseph J. Faman, Jr.
April 27, 2007
Page 2
None of the three snippets of communication cited by Mr. Winters support a dif`ferent
conclusion. In one instance, Mr. Winters cites a single sentence from an October 4, 2004 email
from Larry McMichael, counsel for the Trustee, to Peter Wolfson, counsel for Royal, to argue
that there was no common interest between the parties at that time. (Mr. McMichael and Mr.
Wolfson were the attorneys principally involved in negotiating the settlement.) A review of the
full text of that email reflects a different truth:
REDACTED
Clearly, the parties were actively working at this time to ensure that their common interests in
preserving and appropriately prosecuting valuable Estate claims were addressed and protected.
Likewise, and viewed in context, the September 9, 2004 email from Sheryl Auerbach,
another attomey for the Trustee, to Alan Gilbert, one of the attorneys for Royal, is strong
evidence of the cooperative working legal relationship that the parties had at that time. That
email evidences an active dialogue at that time between the parties concerning a potential claim
(as documents provided in camera do in more detail). That type of exchange is precisely why
Royal contends that it is appropriate for Your Honor to conclude that work product shared
shortly prior to the October, 2004 finalization of the settlement agreement between the Trustee
and Royal should be protected &om disclosure. All of the in camera documents, which are dated
in or after September, 2004 are properly characterized as such.
Finally, Mr. Winters’ assertions of untimeliness should also be rejected. The small
amount of material that Royal provided to Your Honor for in camera review surfaced during the
course of its review of its communications with the Trustee for purposes of responding to the
defendants’ discovery requests. Royal was not even a party to whom the discovery request that
was the subject of the Court’s original order was addressed. The in camera submission was
made at the same time as Royal’s much more voluminous production of non—privileged,
responsive communications-nearly some 15,000 pages. Royal has not been dilatory.
Respectfully,
/s/ Twany Geyer Lydon
Tif`f`any Geyer Lydon
TGL/dmf
180052.1

Case 1 :05-cv-00072-JJF Document 154 Filed 05/O3/2007 Page 3 of 3
Honorable Joseph J. Farnan, Jr.
April 27, 2007
Page 3
cc: John Shaw, Esq. (Counsel for Wells Fargo Bank N.A.) (e-mail)
Andre G. Castaybert, Esq. (Counsel for Wells Fargo Bank N.A.) (e-mail)
Michael Waters, Esq. (Counsel for Trustee) (e-mail)
Donald Crecca, Esq. (Counsel for Trustee) (e-mail)
Charlene D. Davis, Esq. (Cour1sel for Trustee) (e-mail)
Veronica Rendon (Counsel for McGladrey & Pullen LLP and Michael Aquino)
(e-mail)
John H. Eickemeyer, Esq. (Counsel for Freed Maxick & Battaglia CPAs, PC and Freed
Maxick Sachs & Murphy, P.C.) (e-mail)
Stephen J. Shapiro, Esq. (Counsel for Pepper Hamilton LLP and W. Roderick Gagne)
(e-mail)
Elizabeth K. Ainslie, Esq. (Counsel for Pepper Hamilton LLP and W. Roderick Gagne)
_ (e-mail)
Neil G. Epstein, Esq. (Counsel for W. Roderick Gagne, Robert L. Bast, Pamela Bashore
Gagne and the Trusts) (e-mail)
Karen Lee Tumer, Esq. (Counsel for W. Roderick Gagne, Robert L. Bast, Pamela
Bashore Gagne and the Trusts) (e-mail)
Michael R. Lastowski, Esq. (Counsel for McGladrey & Pullen LLP and Michael Aquino)
(e-mail)
William H. Sudell, Jr., Esq. (Counsel for Pepper Hamilton LLP and W. Roderick Gagne)
(e-mail)
David E. Wilks, Esq. (Counsel for Freed Maxick & Battaglia CPAs, PC and Freed
Maxick Sachs & Murphy, P.C.) (e-mail)
Thomas Selby, Esq. (Counsel for McGladrey & Pullen LLP) (e-mail)