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in jeopardy payment to plaintiffs and other creditors. The
complaint also alleged that the banks continued to give false
assurances of Knudsen's solvency, inducing plaintiffs to continue
to supply milk for a longer period than they otherwise would
have, so that the banks' security interests would be enhanced to
the detriment of plaintiffs.5 The indirect causes of action stem
from the allegation that the financing arrangements were such
that they gave the banks virtual control over Knudsen and were
thus indirectly responsible for its actions. The Bank Defendants
denied the allegations.
The amounts claimed as general damages in Exhibit A attached
to the complaint are approximately equal to the milk losses.
The milk producers were represented by Michael J. Bidart
(Bidart) of Shernoff, Bidart & Darras. William J. F. Roll III
(Roll) of Shearman & Sterling represented the Bank Defendants.
The milk producers action was part of a larger coordinated
proceeding entitled Coordination No. 2138, which involved the
Knudsen matter and included approximately 20 different lawsuits
against the Bank Defendants. Generally, five groups or subsets
of plaintiffs were represented. One set was the milk producers
litigation, which eventually was resolved in a settlement that
included plaintiffs from a separate suit filed by the Danish
5 The milk producers, in fact, lost payment for 4 weeks'
worth of raw milk worth about $30 million before Knudsen began
paying on a daily, C.O.D. basis.
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