Tang renegotiates deal with law firm to pursue claim against Merrill Lynch

NMI Settlement Fund trustee Joyce C. H. Tang has renegotiated the terms of a proposed arrangement with a law firm that is currently representing the claims against the NMI Retirement Fund’s former consultant, Merrill Lynch.

Under the proposal submitted to federal court, Tang and the Florida-based Levin law firm, which is representing individual claimants against Merrill Lynch, may hire additional counsel if it is in the best interests of the Settlement Fund.

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

Tang, Gov. Eloy Inos, the CNMI government, Johnson and the settlement class, NMI Retirement Fund, Levin law firm, and O’Connor law firm (another counsel for individual claimants) signed the agreement, stating that it is in the best interests of the Settlement Fund and the class for Tang to enter into a revised arrangement.

The parties also agree that it is in the best interest of the Settlement Fund and the class for Tang to accept the assignment by the “assignees” (claimants) pursuant to the terms of the assignment agreement.

The assignees (claimants) are Mariano Taitano, Roman Tudela, and Patricia Guerrero. The 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.

As a result, Taitano, Tudela and Guerrero, through the O’Connor law firm, sued the Fund’s board, Merrill Lynch, and others in Superior Court for damages relating to the decline of the Fund’s assets.

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

The assignees and the 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 the case in its own name.

Tang requested the U.S. District Court for the NMI to allow the Settlement Fund to substitute as the claimant in an arbitration proceeding before FINRA.

The federal court approved Tang’s request in principle, but rejected last month the initial proposed arrangement with the claimants’ counsel.

The parties asked the court to issue an order authorizing Tang to enter into an assignment agreement and substitute the individual claimants in the FINRA arbitration.

Under the new proposed arrangement, the Levin law firm shall represent the Settlement Fund in the FINRA arbitration and any appeals, including the collection of any arbitration award or settlement.

The agreement is based upon a contingent fee and the Levin law firm will only be paid if a recovery is obtained. If no recovery is obtained, the Settlement Fund is under no obligation to pay the Levin law firm. There will also be no retainer fee or deposit.

The Levin law firm agrees to reimburse the law firm of Bronster Hoshibata for legal services and expenses incurred in connection with the FINRA arbitration up to $50,000 from the fee.

Any payment or agreement to associate as counsel with the Bronster Hoshibata law firm shall be subject to court approval.

The O’Connor law firm will be paid a referral fee for work performed in connection with the Superior Court action and the FINRA arbitration to date.