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A judge dismisses a company's lawsuit alleging overbilling by the law firm that represented its former CFO, who was convicted of fraud.
Kate Plourd, CFO Magazine
September 1, 2008
Antivirus-software company McAfee has been fighting more than just computer bugs lately. In July, a judge dismissed a lawsuit that McAfee filed against Wilmer, Cutler, Pickering, Hale and Dorr — the law firm that represented former CFO Prabhat Goyal, who was convicted of corporate fraud in May 2007.
Goyal was part of a scheme at McAfee in which executives understated losses by $330 million and overstated revenue by $470 million between 1998 and 2000 (when McAfee was known as Network Associates). McAfee subsequently contended that WilmerHale overstated some numbers of its own — in its bills, that is. The software company accused the law firm of overcharging it by more than $6 million during the five years WilmerHale defended Goyal.
But a federal judge sided with the law firm's argument that "McAfee failed to state a valid claim, that the case was not ripe [for example, other avenues of settlement had not been exhausted], and that it was brought in the wrong forum," says WilmerHale's attorney, Gerson Zweifach, of Williams & Connolly LLP.
McAfee is considering an appeal. Meanwhile, Goyal and former McAfee general counsel Kent Roberts have filed lawsuits charging that McAfee broke an indemnification agreement when it stopped paying their legal bills after last May's conviction.