Hofschneider OKs proposed deal to pursue claim vs Merrill Lynch

Acting governor Jude U. Hofschneider has signed on behalf of Gov. Eloy S. Inos and the CNMI government an engagement agreement that NMI Settlement Fund trustee Joyce C. H. Tang has renegotiated with a law firm that currently represents the claims against the NMI Retirement Fund’s former consultant, Merrill Lynch.

Hofschneider approved the deal as Inos is still off-island.

Attorney General Gilbert Birnbrich also signed the agreement, along with other parties involved.

Under the proposal, Tang and the Florida-based Levin law firm, which is representing individual claimants against Merrill Lynch, may also hire associated counsel if they deem it to be in the best interests of the Settlement Fund.

The CNMI government, however, reserves the right to object to hiring additional associated counsel and payments to the law firm of Bronster Hoshibata, which is counsel for Betty Johnson and the settlement class.

Aside from Birnbrich’s, Tang’s and Hofschneider’s signatures, the other signatories are counsels for Betty Johnson and the settlement class, NMI Retirement Fund, Levin law firm, and O’Connor law firm (also counsel for individual claimants).

The original claimants in the lawsuit against Merrill Lynch are Mariano Taitano, Roman Tudela, and Patricia Guerrero. The NMI Retirement Fund’s board assigned to them the claims asserted in the Merrill Lynch litigation.

Merrill Lynch was the Fund board’s investment consultant until 2010. During the time of the consultancy relationship, the value of Fund’s assets reportedly declined substantially.

Taitano, Tudela and Guerrero, through counsel O’Connor law firm, sued the Fund’s board, Merrill Lynch, and unnamed others in Superior Court, alleging various causes of action for damages relating to the decline of the Fund’s assets.

As a result,

The lawsuit in Superior Court was then stayed and the matter was submitted to arbitration before the Financial Industry Regulation Authority.

The assignees and their counsel O’Connor law firm now wish to assign their interests in the Merrill Lynch litigation to the Settlement Fund, so the Settlement Fund can prosecute that action in its own name.

Under the proposed engagement agreement, the Levin law firm shall represent the Settlement Fund in the FINRA arbitration and any appeals arising therefrom, including the collection or recovery of any arbitration award or settlement.