Dechert Obtains Dismissal of All Claims on Behalf of Client Myles Itkin

Dechert LLP recently argued and prevailed in a significant matter resulting in a court decision dismissing all claims brought against firm client, Myles Itkin, the former Chief Financial Officer of Overseas Shipholding Group, Inc. (“OSG”). The court held that where a legal malpractice action has been brought against a law firm, New York law prohibits the law firm from suing the client’s agent for alleged malfeasance, where the suit is duplicative of the law firm’s affirmative defenses in the related malpractice suit.

According to the claims set forth in OSG’s malpractice claim against its former outside counsel, Proskauer Rose LLP  in New York Supreme Court (Overseas Shipholding Group, Inc. v. Proskauer Rose LLP, et al., Index No. 650765/2014), Proskauer provided OSG with erroneous advice regarding whether certain terms in OSG’s credit agreement triggered massive tax liability. In response to the OSG action, Proskauer initiated this separate action against Itkin and James Edelson, OSG’s General Counsel, asserting claims against Itkin for fraud, constructive fraud, negligent misrepresentation, and contribution for allegedly making false representations which Proskauer relied upon in rendering their advice to OSG. Faced with potentially hundreds of millions of dollars in damages in the OSG action, Proskauer sought to recover from Itkin and Edelson for any alleged liability Proskauer incurred as a result of the OSG action, millions of dollars in attorneys fees and reputational damages. In dismissing all claims against Itkin, the Judge adopted Dechert’s arguments that these claims should be dismissed in their entirety noting that to rule otherwise, would significantly change the relationship between attorneys and their clients and open the door to attorneys suing the executives at their client corporations when hit with a malpractice suit.

The Dechert team representing Myles Itkin in this litigation was partners David Kistenbroker and Joni Jacobsen, and associates Mayer Grashin and Conrad Johnson David Kistenbroker argued the motion to dismiss.

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Dechert is a global specialist law firm focused on sectors with the greatest complexities and highest regulatory demands. We deliver practical commercial insight and judgment to our clients' most important matters. Nothing stands in the way of giving clients the best of the firm's entrepreneurial energy and seamless collaboration in a way that is distinctively Dechert.