Free Redacted Document - District Court of Delaware - Delaware


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Case 1 :05-cv-00072-JJF Document 153 Filed 05/O2/2007 Page 1 of 2
April 19, 2007
VIA ELECTRONIC FILING & HAND DELIVERY
PUBLIC REDACTED VERSION
Honorable Joseph J. Faman, lr.
United States District Court
District of Delaware
J. Caleb Boggs Federal Building
844 N. King Street
Room 4124, Lockbox 27
Wilmington, Delaware l980l
Re: Charles A. Stariziale, Jr., Chapter 7 Trustee of Student F mance Corp. v.
McGladrey & Puller: LLP, et al., No. 05-72 (JJF)
Royal Inclemrtity Co. v. Pepper Hamilton LLP, er al., No. 05-l65 (UF)
Dear Judge Faman:
We write on behalf of defendants McGladrey & Pullen, LLP and Michael Aquino
in response to the April 18, 2007 letter from counsel for Royal Indemnity Company
("Royal"). In that letter, Royal requests the Court to "consider clarifying or amending"
its February 7, 2007 order (the "Order") compelling production of communications
between Royal and the Chapter 7 Trustee of Student Finance Corporation (the "Trustee”).
Specifically, Royal’s April 18 letter asks the Court to protect from disclosure certain
communications that predate the settlement, on the theory that they constitute "shared
work product" or a “common interest." For the reasons set forth below, Royal’s tast-
minute request that this Court revisit its February 7 decision should be denied.
First, Royal’s statement that it was continually "working cooperatively" with the
Trustee in negotiating an October l 1, 2004 term sheet is demonstrably false. Settlement
communications that to date have been produced from the September to October 2004
time frame show that the relationship between Royal and the Trustee remained
adversarial. For example, there remained clear disagreement regarding the merits of any
lawsuit against SFC’s former accountants and auditors, including McGladrey and
Aquino:

Case 1:O5—cv—OOO72-JJF Document 153 Filed 05/O2/2007 Page 2 of 2
Honorable Joseph J. F arnan A
April 19, 2007
Page 2
(Ex. A). Thereafter, Royal’s counsel wrote that the relationship between Royal and the
Trustee (Ex. B). Indeed, it appears that the
settlement was still questionable as late as October 4, 2004, when the Trustee’s counsel
questioned (Ex.
C). The facts do not support Royal’s claim of common interest.
Royal’s only remaining argument is that these withheld documents "predate
somewhat the formal settlement," and therefore should he protected from this disclosure.
This is the same argument Royal raised in opposition to Pepper I-lamiltorfs motion to
compel. (See Royal Reply at p. 8). That argument was rejected when this Court ordered
that "pre—settlement discussions" must be produced. (See Order, p. l2). Royal offers no
basis to deviate from that ruling.
Furthermore, Royal’s request is untimely. Although Royal’s has been aware of
its obligations under the Order since February 7, 2007, McGladrey and Aquino did not
receive Royal’s l5,000 page production until yesterday, literally on the eve ofthe
Trustee’s deposition. It is only now -- over two months after the Order and on the very
day that the Trustee was questioned on the settlement —— that Royal seeks relief trom Your
Honor’s Order. There is no excuse for Royal’s delay.
We respectfully request that the Court deny Royal’s request for a moditication ot`
the Order, and further request that the Court direct Royal to produce immediately all
documents previously submitted to the Court for ir: camera: review.
Respectfully submitted,
Christopher M. Winter
Enclosure
cc: All counsel of record