Notice: We appreciate your interest in Massumi + Consoli. If your inquiry relates to a legal matter and you are not already a current client of the firm, please do not transmit any confidential information to us. Before taking on a representation, we must determine whether we are in a position to assist you and agree on the terms and conditions of engagement with you. Until we have completed such steps, we will not be deemed to have a lawyer-client relationship with you, and will have no duty to keep confidential the information we receive from you. Thank you for your understanding.
Partner
Michael R. Huttenlocher
Partner
Michael R. Huttenlocher
Mike Huttenlocher is a Partner focused on litigation and dispute resolution matters and serves as Massumi + Consoli’s General Counsel.
Practice Areas
Experience
Mike has extensive experience advising private equity firms, their portfolio companies and other enterprises on all aspects of complex disputes and controversies, including domestic and cross-border deal litigation, corporate governance disputes, securities and shareholder litigation, investigations, labor and employment disputes and other complex general commercial litigation.
Mike excels in matters that require detailed attention, tested experience and a high degree of sophistication and is experienced in all phases of litigation in state and federal courts around the country, as well as in domestic and international arbitration, including pre-filing investigation and case assessment, fact and expert discovery, legal research, motion practice, trial preparation, trial and appeals.
Among other accolades, Mike has been repeatedly recognized by Benchmark Litigation in its 40 & Under hot list and as a Future Star.
Mike was previously an Adjunct Professor at the Fordham University School of Law, where he authored and taught a course on complex commercial litigation for students enrolled in its LL.M. program. Mike also currently serves as the Chairman of the Board of Directors of the BK Steppers, a music education non-profit.
Prior to joining Massumi + Consoli, Mike was a Partner at McDermott Will & Emery.
Education
- New York University School of Law, J.D.
- State University of New York at Binghamton, B.A., summa cum laude, Phi Beta Kappa
Bar Admissions
- New York
Courts
- Supreme Court of the United States
- U.S. Court of Appeals for the Second Circuit
- U.S. District Court for the Eastern District of New York
- U.S. District Court for the Southern District of New York
News & Insights
-
02.26.26
Attorney-Client Privilege in AI Conversations: What Companies, Executives and Investors Need to Know
%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EBy%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22%3EMichael+R.+Huttenlocher%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%2C%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Flewis-zirogiannis-pc%2F%22%3ELewis+Zirogiannis%2C+P.C.%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%2C%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fyoav-gaffney%2F%22%3EYoav+Gaffney%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%2C%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fthomas-f-li%2F%22%3EThomas+F.+Li%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E+and%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fabigail-blaker%2F%22%3EAbigail+Blaker%3C%2Fa%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3ECompanies%2C+executives+and+investors+increasingly+rely+on+AI+tools+to+draft+correspondence%2C+summarize+key+materials%2C+support+decision-making+and+prepare+for+discussions+with+counsel.+While+using+AI+is+not+inherently+problematic%2C+the+scope+of+attorney-client+privilege+and+work+product+protections+for+AI-related+exchanges+remains+unsettled.+Two%C2%A0recent+decisions%E2%80%94%3Cem%3EUnited+States+v.+Heppner+%3C%2Fem%3E%28%E2%80%9C%3Cem%3EHeppner%3C%2Fem%3E%E2%80%9D%29+from+the+Southern+District+of+New+York+and+%3Cem%3EWarner+v.+Gilbarco%2C+Inc.+%3C%2Fem%3E%28%E2%80%9C%3Cem%3EGilbarco%3C%2Fem%3E%E2%80%9D%29%2C+from+the+Eastern+District+of+Michigan%E2%80%94illustrate+how+these+protections+may+apply+depending+on+different+circumstances.+Although+these+rulings+reached+different+outcomes%2C+they+underscore+the+same+practical+lesson%3A+using+AI+tools+in+legal+workflows+may+pose+risks+unless+specific+safeguards+are+in+place.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Cstrong%3EBackground%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%3Cem%3E%3Cu%3EHeppner%3C%2Fu%3E%3C%2Fem%3E%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EAfter+learning+he+was+the+target+of+a+federal+criminal+investigation%2C+Bradley+Heppner+used+Anthropic%E2%80%99s+AI+platform+Claude+to+prepare+a+defense+for+his+potential+indictment+and+litigation.+Without+direction+from+his+attorneys%2C+Heppner+input+information+his+attorneys+had+shared+with+him+into+Claude+and+engaged+in+several+exchanges+with+the+tool%2C+generating+approximately+31+documents+outlining+potential+defense+strategies+and+Heppner%E2%80%99s+view+of+the+facts+and+law.+He+then+shared+Claude%E2%80%99s+outputs+with+his+defense+counsel.+When+the+FBI+seized+the+documents+during+Heppner%E2%80%99s+arrest%2C+his+counsel+asserted+attorney-client+privilege+and+work+product+protection+over+the+Claude+exchanges.+The+Government+moved+for+a+ruling+that+neither+protection+applied.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%3Cem%3E%3Cu%3EGilbarco%3C%2Fu%3E%3C%2Fem%3E%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EIn+an+employment+discrimination+case%2C+%3Cem%3Epro+se+%3C%2Fem%3Eplaintiff+Sohyon+Warner+used+OpenAI%E2%80%99s+ChatGPT+to+draft+filings+and+analyze+legal+questions.+The+defendants+moved+to+compel+production+of+all+AI-related+materials%2C+arguing+that+the+plaintiff+waived+work+product+protection+by+disclosing+the+materials+to+a+third-party+platform.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Cstrong%3EThe+Court%E2%80%99s+Holdings%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%3Cem%3E%3Cu%3EHeppner%3A+%3C%2Fu%3E%3C%2Fem%3E%3C%2Fstrong%3E%3Cstrong%3E%3Cu%3ENo+Protection%3C%2Fu%3E%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EOn+February+17%2C+2026%2C+Judge+Rakoff+held+that+Heppner%E2%80%99s+exchanges+with+Claude%E2%80%94a+publicly+available+AI+platform+that+permits+third-party+disclosure+of+user+inputs%E2%80%94were+not+protected+by+the+attorney-client+privilege+or+the+work+product+doctrine.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+Court+rejected+Heppner%E2%80%99s+attorney-client+privilege+claim+on+multiple+grounds.+First%2C+Claude+is+not+an+attorney+and+discussions+of+legal+issues+between+non-attorneys+receive+no+protection.+Second%2C+Heppner%E2%80%99s+communications+with+Claude+were+not+confidential.+The+Court+emphasized+that+Anthropic%E2%80%99s+privacy+policy+explicitly+permits+the+company+to+collect+user+inputs+and+outputs%2C+use+that+data+for+AI+training+and+disclose+it+to+third+parties%2C+including+government+authorities%2C+thereby+removing+any+reasonable+expectation+of+confidentiality%2C+even+with+respect+to+information+Heppner+had+originally+received+from+counsel.+Third%2C+Heppner+did+not+communicate+with+Claude+to+obtain+legal+advice%3B+although+Heppner+later+forwarded+the+documents+to+his+counsel%2C+that+did+not+retroactively+protect+them+from+disclosure.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+Court+also+rejected+Heppner%E2%80%99s+work+product+claim.+The+work+product+doctrine+protects+materials+prepared+by+or+at+the+direction+of+counsel+in+anticipation+of+litigation.+Here%2C+Heppner+prepared+the+AI+documents+of+his+own+volition%2C+and+although+Heppner+had+input+information+he+received+from+counsel%2C+the+documents+did+not+reflect+counsel%E2%80%99s+strategy+at+the+time+Heppner+generated+them.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%3Cem%3E%3Cu%3EGilbarco%3C%2Fu%3E%3C%2Fem%3E%3C%2Fstrong%3E%3Cstrong%3E%3Cu%3E%3A+Work+Product+Protection+Applies%3C%2Fu%3E%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EOn+February+10%2C+2026%2C+Magistrate+Judge+Patti+held+that+Warner%E2%80%99s+exchanges+with+ChatGPT+were+protected+by+the+work+product+doctrine.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+Court+explained+that+Warner%2C+who+was+self-represented%2C+was+using+ChatGPT+to+prepare+legal+filings+and+that+her+exchanges+reflected+her+legal+strategy.+Moreover%2C+disclosure+to+ChatGPT+had+not+waived+the+protection%3A+the+court+explained+that+work+product+protection+%26%238220%3Bis+waived+only+when+documents+are+used+in+a+manner+contrary+to+the+doctrine%26%238217%3Bs+purpose%2C%26%238221%3B+specifically+by+disclosure+%26%238220%3B%3Cem%3Eto+an+adversary%3C%2Fem%3E+or+in+a+way+likely+to+get+in+an+adversary%26%238217%3Bs+hand.%26%238221%3B+According+to+the+Court%2C+generative+AI+tools+%26%238220%3Bare+%3Cem%3Etools%2C+not+persons%3C%2Fem%3E%2C+even+if+they+may+have+administrators+somewhere+in+the+background%2C%26%238221%3B+and+regardless%2C+Warner%E2%80%99s+disclosure+to+ChatGPT+was+not+likely+to+result+in+disclosure+to+Gilbarco+in+ordinary+circumstances.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%3Cu%3EReconciling+the+Two+Decisions%3C%2Fu%3E%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EAlthough+the+two+cases+reach+different+outcomes%2C+they+are+not+necessarily+inconsistent.+The+%3Cem%3Epro+se+%3C%2Fem%3Efooting+in+%3Cem%3EGilbarco+%3C%2Fem%3Emeaningfully+shaped+the+analysis%3A+because+the+plaintiff+represented+herself%2C+her+AI+exchanges+reflected+her+own+mental+processes+and+case+strategy.+By+contrast%2C+the+%3Cem%3EHeppner+%3C%2Fem%3Ecourt+emphasized+that+Heppner%E2%80%99s+exchanges+did+%3Cu%3Enot%3C%2Fu%3E+reflect+his+counsel%E2%80%99s+strategy+and+the+AI+platform+Heppner+used+permitted+disclosure+to+the+government%E2%80%94Heppner%E2%80%99s+actual+adversary.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Cstrong%3EImplications+for+Companies%2C+Executives%2C+and+Investors%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3ECompanies%2C+executives%2C+and+investors+increasingly+use+AI+to+support+core+workflows%2C+including+legal%3A+negotiating+agreements%2C+managing+compliance+matters%2C+assessing+potential+risks+and+liabilities%2C+responding+to+regulatory+inquiries+and+preparing+for+litigation.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThese+decisions+carry+several+key+lessons.+First%2C+using+generative+AI+in+legal+workflows+should+be+limited+to+platforms+with+strong+confidentiality+protections%2C+typically+enterprise+deployments.+The+ruling+in+%3Cem%3EHeppner%3C%2Fem%3E%C2%A0is+limited+to+AI+platforms+whose+terms+permit+data+collection+and+third-party+disclosure%2C+including+government+authorities.+Second%2C+AI-generated+material+intended+for+use+in+litigation+should+be+prepared+at+counsel%E2%80%99s+direction.+Heppner%E2%80%99s+decision+to+act+independently+was+fatal+to+his+attorney-client+privilege+and+work+product+claims%3B+represented+parties+should+ensure+AI+use+occurs+within+the+attorney-client+relationship.+Third%2C+the+law+continues+to+evolve.+%3Cem%3EHeppner+%3C%2Fem%3Eattracted+significant+attention%2C+but+%3Cem%3EGilbarco+%3C%2Fem%3Eshows+courts+may+take+different+approaches+to+different+sets+of+facts.+Accordingly%2C+businesses+should+monitor+developments+and+consult+counsel+when+developing+AI+policies%E2%80%94and%2C+while+the+law+develops%2C+we+recommend+adopting+a+cautious+approach.+Consider+at+least+the+following+steps%3A%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Cstrong%3EPractical+Steps+for+Companies%2C+Executives+and+Investors+for+Using+AI+in+Legal+Workflows%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Col%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EKeep+privileged+materials+out+of+AI+platforms.%3C%2Fstrong%3E+Do+not+input+legal+documents+or+memos%2C+attorney+emails%2C+or+counsel%26%238217%3Bs+advice+into+non-enterprise+AI+platforms.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EUse+enterprise+AI+with+meaningful+protections.%3C%2Fstrong%3E+Review+privacy+policies+for+data+sharing%2C+training+use+and+disclosure+to+authorities%2C+and+require+contractual+commitments+prohibiting+training+on+user+data+and+third-party+disclosure.+Merely+toggling+off+AI+training+options+is+helpful+but+may+not+be+adequate.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EUse+consumer-facing+AI+tools+sparingly.%3C%2Fstrong%3E+Treat+non-enterprise+AI+as+a+third+party.+Anything+you+input+and+any+output+you+receive+may+be+produced+in+litigation+or+in+response+to+regulatory+inquiries.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EBan+AI+notetakers+from+privileged+meetings.%3C%2Fstrong%3E+Do+not+use+AI+transcription+on+calls+with+counsel+or+internal+discussions+of+legal+advice.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EInvolve+counsel+early.%3C%2Fstrong%3E+When+disputes%2C+investigations%2C+or+regulatory+matters+arise%2C+use+of+AI+should+only+be+at+counsel%26%238217%3Bs+direction%E2%80%94not+independently+undertaken%E2%80%94to+preserve+attorney-client+privilege+and+work+product+protection.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ETrain+broadly.%3C%2Fstrong%3E+AI+policies+should+reach+board+members%2C+executives+and+employees%2C+not+just+in-house+counsel.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Fol%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Cstrong%3EConclusion%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EGenerative+AI+is+transforming+how+companies+and+investors+operate.+%3Cem%3EHeppner%3C%2Fem%3E+and+%3Cem%3EGilbarco+%3C%2Fem%3Edemonstrate+that+longstanding+legal+doctrines+continue+to+apply+to+new+technologies+and+that+privilege+and+work+product+determinations+will+often+turn+on+fact-specific+considerations.+These+decisions+do+not+mean+businesses+should+stop+using+AI.+But+businesses+should+be+smart+and+intentional+in+how+they+use+AI%2C+with+special+attention+paid+when+legal+issues+are+involved.%3C%2Fspan%3E%3C%2Fp%3E%0A02.11.26DOJ Fraud Section Year in Review 2025: What Private Equity Sponsors and Their Portfolio Companies Should Know
%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3Eby+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Flewis-zirogiannis-pc%2F%22%3ELewis+Zirogiannis%2C+P.C.%3C%2Fa%3E%2C+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22%3EMichael+R.+Huttenlocher%3C%2Fa%3E%2C+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fjoyce-cowan%2F%22%3EJoyce+Cowan%3C%2Fa%3E%2C+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmatthew-smith%2F%22%3EMatthew+Smith%3C%2Fa%3E+and+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fyoav-gaffney%2F%22%3EYoav+Gaffney%3C%2Fa%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3EI.%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0+Introduction%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EIn+January+2026%2C+the+Department+of+Justice+Criminal+Division%E2%80%99s+Fraud+Section+released+its+Year+in+Review+for+2025%2C+a+document+worth+reviewing+for+private+equity+sponsors+and+their+portfolio+companies+across+a+range+of+industries.%C2%A0+The+2025+report+reflects+a+significant+expansion+of+both+the+Fraud+Section%E2%80%99s+mandate+and+resources.+%C2%A0The+Fraud+Section+now+has+more+than+200+attorneys%E2%80%94the+largest+in+its+history%E2%80%94and+has+assumed+the+criminal+portfolio+and+personnel+of+the+former+Consumer+Protection+Branch%2C+uniting+expertise+in+its+effort+to+more+comprehensively+protect+the+American+public.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+numbers+tell+an+interesting+story%3A+the+Fraud+Section+charged+265+defendants+in+2025+%28an+over+10%25+increase+from+the+prior+year%29%2C+with+aggregate+intended+fraud+loss+exceeding+%2416+billion%E2%80%94a+record+and+more+than+double+2024%E2%80%99s+total.%C2%A0+Corporate+accountability+remained+a+central+pillar+of+the+Section%E2%80%99s+work%2C+resulting+in+15+corporate+enforcement+actions%2C+including+12+corporate+resolutions+and+3+corporate+indictments.%C2%A0+These+cases+resulted+in+combined+resolution+amounts+of+approximately+%241+billion.%C2%A0+Notably%2C+for+the+first+time+in+over+15+years%2C+the+Fraud+Section+indicted+corporate+entities+for+criminal+activity%2C+signaling+an+evolving+enforcement+approach.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EFor+private+equity+sponsors+and+portfolio+company+leadership+teams%2C+this+report+offers+a+useful+window+into+where+the+DOJ+is+focusing+its+attention.+%C2%A0Understanding+these+priorities+can+help+inform+investment+decisions%2C+due+diligence+practices%2C+compliance+planning%2C+and+risk+management+discussions+at+both+the+sponsor+and+portfolio+company+levels.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3EII.%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0+Where+the+DOJ+Is+Focusing%3A+2025+Enforcement+Priorities%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+2025+Year+in+Review+identifies+several+key+enforcement+priorities+across+the+Fraud+Section%26%238217%3Bs+four+litigating+units+which+are+worth+keeping+on+your+radar%3A%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EForeign+Corrupt+Practices+Act+%28FCPA%29+and+Anti-Bribery+Enforcement.%3C%2Fstrong%3E+The+FCPA+Unit%2C+composed+of+over+20+prosecutors%2C+is+responsible+for+investigating+and+prosecuting+violations+of+the+FCPA+and+the+Foreign+Extortion+Prevention+Act+%28FEPA%29.+In+June+2025%2C+the+Deputy+Attorney+General+issued+new+Guidelines+for+FCPA+enforcement%2C+highlighting+four+non-exhaustive+priority+areas%3A+%281%29+investigation+and+prosecution+of+foreign+bribery+conduct+that+facilitates+the+operations+of+cartels+and+transnational+criminal+organizations%3B+%282%29+conduct+that+deprives+U.S.+companies+of+fair+opportunities+to+compete%3B+%283%29+conduct+that+undermines+U.S.+national+security+interests%3B+and+%284%29%C2%A0conduct+involving+substantial+bribe+payments+and+efforts+to+conceal+criminal+schemes.%C2%A0+The+Fraud+Section+brought+three+corporate+enforcement+actions+under+the+FCPA+in+2025%2C+including+the+first+corporate+indictment+in+15+years+against+SGO+Corporation+%28Smartmatic%29+for+alleged+bribery+and+money+laundering+in+connection+with+Philippine+election+contracts.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EHealth+Care+Fraud.%3C%2Fstrong%3E+The+Health+Care+Fraud+%28HCF%29+Unit+had+a+record-setting+year%2C+leading+the+largest+coordinated+nationwide+effort+to+combat+and+deter+health+care+fraud+in+the+Department%E2%80%99s+history.+In+June+2025%2C+the+Department+charged+324+individuals%E2%80%94including+96+licensed+medical+professionals%E2%80%94across+50+federal+districts+and+12+state+jurisdictions%2C+with+alleged+losses+exceeding+%2414.6+billion.%C2%A0+The+report+states+that+ongoing+health+care+fraud+enforcement+priorities+include%3A+protecting+the+public+fisc+through+seizure+and+forfeiture%3B+targeting+foreign+actors%3B+addressing+addiction+rehabilitation+fraud%3B+tackling+prescription+drug+abuse%3B+and+pursuing+corporate+enforcement.+%C2%A0Health+care+sectors+with+specific+enforcement+initiatives+include+wound+care%2C+digital+health+technology%2C+substance+abuse+treatment+providers+and+telemedicine+providers.+%C2%A0Additionally%2C+an+NPA+with+Troy+Health%2C+Inc.%2C+a+Medicare+Advantage+plan+accused+of+enrolling+beneficiaries+without+their+consent%2C+shows+continued+interest+in+Medicare+Advantage+fraud.+%C2%A0In+2025%2C+the+HCF+Unit+seized+more+than+%24568+million+in+assets%2C+the+Centers+for+Medicare+and+Medicaid+Services+%28CMS%29+prevented+more+than+%244+billion+in+fraudulent+payments%2C+and+CMS+suspended+the+billing+privileges+of+205+providers.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EHealth+and+Safety+Enforcement.%3C%2Fstrong%3E+The+newly+formed+Health+and+Safety+Unit+%28HSU%29+focuses+on+ensuring+products+distributed+to+consumers+meet+legal+obligations.+The+HSU+criminally+enforces+the+Federal+Food%2C+Drug%2C+and+Cosmetic+Act+%28FDCA%29%2C+pursuing+offenses+involving+food%2C+prescription+medications%2C+counterfeit+pills%2C+medical+devices%2C+dietary+supplements%2C+and+tobacco.%C2%A0+The+HSU+also+brings+criminal+enforcement+actions+under+the+Consumer+Product+Safety+Act+and+the+Federal+Hazardous+Substances+Act%2C+targeting+dangerous+products+and+the+knowing+failure+by+companies+or+individuals+to+report+defects+or+hazards+presenting+unreasonable+risk+of+death+or+injury+to+consumers.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EMarket%2C+Government%2C+and+Consumer+Fraud.%3C%2Fstrong%3E+The+Market%2C+Government%2C+and+Consumer+Fraud+%28MGC%29+Unit+prosecutes%3A+%281%29+fraud+and+manipulation+harming+U.S.+markets+and+investors%3B+%282%29+schemes+to+defraud+government+programs%2C+evade+tariffs%2C+and+procure+government+contracts+fraudulently%3B+and+%283%29+complex+consumer+fraud+targeting+Americans.+In+2025%2C+the+MGC+Unit+expanded+its+mandate+through+integration+of+the+former+Consumer+Protection+Branch%2C+adding+over+20+consumer+fraud+prosecutors.%C2%A0+Priority+areas+include%3A+securities+fraud+schemes+involving+foreign+issuers+and+variable+interest+entities+%28VIEs%29%3B+trade+and+tariff+fraud%3B+procurement+fraud%3B+and+consumer+investment+scams.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ETrade+Fraud+Task+Force.%3C%2Fstrong%3E+The+MGC+Unit+is+now+part+of+the+cross-agency+Trade+Fraud+Task+Force%2C+which+pursues+enforcement+actions+against+parties+who+seek+to+evade+tariffs+and+other+duties%2C+as+well+as+smugglers+importing+prohibited+goods.+The+MGC+Unit+brought+its+first+corporate+and+individual+trade+fraud+case+in+2025.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3EIII.%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0+What+This+Means+for+Private+Equity+Sponsors+and+Portfolio+Companies%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+2025+Year+in+Review+offers+several+practical+takeaways+for+private+equity+sponsors+and+their+portfolio+companies%3A%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ECorporate+Liability+and+Indictments%3C%2Fstrong%3E.+One+notable+development+is+the+Fraud+Section%E2%80%99s+renewed+willingness+to+indict+corporate+entities%2C+as+evidenced+by+the+first+corporate+indictments+in+over+15+years.+This+marks+a+departure+from+the+Section%E2%80%99s+traditional+exclusive+reliance+on+Deferred+Prosecution+Agreements+%28DPAs%29+and+Non-Prosecution+Agreements+%28NPAs%29.+%C2%A0This+is+a+shift+worth+noting%3A+the+DOJ+appears+more+willing+to+bring+criminal+charges+against+companies%2C+not+just+individuals%2C+in+appropriate+circumstances.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EIndustry-Specific+Considerations%3C%2Fstrong%3E.+Portfolio+companies+in+certain+sectors+may+want+to+pay+particular+attention+to+these+developments%3A%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EHealthcare%3C%2Fstrong%3E%3A+The+HCF+Unit%E2%80%99s+active+enforcement+year+is+particularly+relevant+for+healthcare+portfolio+companies.+In+addition+to+the+June+Takedown%2C+the+Unit+indicted+two+corporate+defendants+and+resolved+allegations+with+two+others+in+2025%E2%80%94its+first+such+resolutions+in+nearly+a+decade.+Portfolio+companies+providing+skilled+nursing+facilities%2C+telemedicine%2C+durable+medical+equipment%2C+addiction+treatment%2C+pharmaceutical+distribution%2C+Medicare+Advantage+plans+or+services%2C+and+wound+care+may+see+continued+attention.+%C2%A0The+prosecution+of+KBWB+Operations+LLC+%28Atrium+Health+and+Senior+Living%29%2C+which+operated+23+skilled+nursing+facilities+and+resulted+in+a+guilty+plea%2C+%24146+million+in+restitution%2C+and+%248.4+million+in+forfeiture%2C+provides+a+concrete+example+of+the+types+of+cases+the+DOJ+is+pursuing.+%C2%A0An+HCF+Data+Fusion+Center+is+being+created+to+leverage+cloud+computing%2C+artificial+intelligence%2C+and+advanced+analytics+to+identify+emerging+healthcare+fraud+schemes.+%C2%A0The+ability+to+readily+analyze+billing+trends+within+a+subsector+may+be+of+particular+concern+to+investors+in+provider+sectors+that+bill+federal+health+care+programs+%28e.g.%2C+Medicare+and+Medicaid%29.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ELife+Sciences+and+Medical+Devices%3C%2Fstrong%3E%3A+The+Kimberly-Clark+Corporation+resolution+illustrates+the+DOJ%26%238217%3Bs+continued+attention+to+medical+device+companies.+Kimberly-Clark+entered+a+DPA+and+agreed+to+pay+up+to+%2440.4+million+to+resolve+charges+stemming+from+the+sale+of+adulterated+surgical+gowns+that+failed+to+meet+required+fluid-resistance+standards.%C2%A0+The+Aesculap+Implant+Systems+NPA+involving+forged+FDA+documents+and+the+illegal+introduction+of+medical+devices+into+interstate+commerce+is+another+corporate+example+in+this+space.+%C2%A0As+in+healthcare%2C+the+DOJ+also+pursued+individual+violators+in+this+space+in+2025.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EConsumer+Products+and+Manufacturing%3C%2Fstrong%3E%3A+The+integration+of+the+Consumer+Protection+Branch+into+the+Fraud+Section+expands+enforcement+capacity+for+violations+involving+consumer+product+safety%2C+hazardous+substances%2C+and+import+fraud.+The+HSU+will+pursue+companies+that+fail+to+report+defects+or+hazards+posing+unreasonable+risk+of+death+or+injury.%C2%A0+The+prosecution+of+Royal+Sovereign+for+fire+hazard+defects+in+dehumidifiers+and+failure+to+report+those+hazards+is+a+useful+case+study+for+companies+thinking+about+product+safety+compliance.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EInternational+Operations%3C%2Fstrong%3E%3A+Portfolio+companies+with+international+operations%2C+particularly+those+doing+business+with+or+through+foreign+governments%2C+will+want+to+keep+FCPA+compliance+top+of+mind.+The+TIGO+Guatemala+resolution%E2%80%94in+which+the+telecommunications+company+agreed+to+pay+over+%24118+million+in+connection+with+bribery+of+Guatemalan+government+officials%E2%80%94demonstrates+that+subsidiaries+of+international+companies+remain+enforcement+targets.%C2%A0+The+Liberty+Mutual+declination+shows+that+voluntary+self-disclosure%2C+full+cooperation%2C+and+timely+remediation+may+result+in+favorable+outcomes.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EGovernment+Contractors%3C%2Fstrong%3E%3A+Portfolio+companies+with+federal+contracts+should+be+aware+of+continued+procurement+fraud+enforcement.+The+Vistant+and+Apprio+corporate+resolutions%2C+arising+from+a+decade-long+bribery+scheme+involving+a+USAID+contracting+officer+and+over+%24550+million+in+prime+contracts%2C+highlight+the+importance+of+robust+controls+in+this+area.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ECompliance+Program+Expectations%3C%2Fstrong%3E.+The+DOJ%E2%80%99s+Corporate+Enforcement+and+Compliance+%28CEC%29+Unit+has+responsibility+for+evaluating+corporate+compliance+programs+and+determining+whether+independent+compliance+monitors+should+be+imposed.+Last+updated+in+September+2024%2C+the+Evaluation+of+Corporate+Compliance+Programs+Guidance+%28ECCP%29+sets+forth+three+fundamental+questions+for+prosecutors%3A+%28i%29+is+the+corporation%26%238217%3Bs+compliance+program+well+designed%3F+%28ii%29+is+the+program+adequately+resourced+and+empowered+to+function+effectively%3F+and+%28iii%29+does+the+corporation%26%238217%3Bs+compliance+program+work+in+practice%3F%C2%A0+These+questions+offer+a+helpful+framework+for+sponsors+conducting+portfolio+company+reviews+and+for+GCs+and+compliance+teams+assessing+their+own+programs.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EVoluntary+Self-Disclosure+Benefits%3C%2Fstrong%3E.+The+Corporate+Enforcement+Policy+%28CEP%29+provides+significant+benefits+for+companies+that+voluntarily+self-disclose+misconduct.+In+2025%2C+the+Department+revised+the+CEP+to+describe+the+path+to+a+declination+based+on+a+timely+voluntary+self-disclosure%2C+cooperation%2C+and+remediation.+The+Liberty+Mutual+declination+illustrates+these+benefits%3A+the+company+voluntarily+self-disclosed+FCPA+violations+involving+bribes+totaling+approximately+%241.47+million+to+Indian+government+officials%2C+fully+cooperated%2C+conducted+a+thorough+root-cause+analysis%2C+separated+personnel+involved%2C+and+made+significant+compliance+improvements%E2%80%94resulting+in+a+declination+with+only+disgorgement+of+%244%2C699%2C088+rather+than+criminal+charges.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%C2%A0%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ECompensation+Clawbacks+and+Incentives%3C%2Fstrong%3E.+The+Pilot+Program+on+Compensation+Incentives+and+Clawbacks+requires+companies+entering+criminal+resolutions+to+implement+and+report+on+compliance-related+criteria+in+their+compensation+and+bonus+systems+during+the+resolution+term.+This+program+also+allows+for+possible+fine+reductions+based+on+corporate+efforts+to+recoup+compensation+from+culpable+employees.%C2%A0+Private+equity+sponsors+may+want+to+discuss+these+requirements+with+compensation+committees+and+HR+leadership+at+portfolio+companies%2C+particularly+when+structuring+management+incentive+plans%2C+as+the+program+demonstrates+the+DOJ%E2%80%99s+continued+focus+on+individual+accountability.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%C2%A0%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EIndividual+Accountability%3C%2Fstrong%3E.+The+Pilot+Program+on+Voluntary+Self-Disclosures+for+Individuals%2C+launched+in+April+2024%2C+details+circumstances+in+which+the+Department+will+offer+non-prosecution+agreements+to+individuals+who+voluntarily+disclose+original+information+about+certain+criminal+conduct+involving+corporations%2C+fully+cooperate%2C+and+pay+applicable+restitution+or+disgorgement.+This+program+is+worth+understanding%2C+as+it+may+encourage+employees+with+knowledge+of+misconduct+to+come+forward.+%C2%A0Strong+internal+reporting+channels+can+help+ensure+issues+are+identified+and+addressed+internally+first.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3E%C2%A0%3C%2Fstrong%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EMonitor+and+Reporting+Obligations%3C%2Fstrong%3E.+The+DOJ+reported+39+active+resolutions+with+Fraud+Section-imposed+reporting+obligations+in+2025%2C+with+33+corporate+entities+under+self-reporting+requirements+and+6+under+independent+monitorships.+The+May+2025+Revised+Memorandum+on+Selection+of+Monitors+clarified+factors+prosecutors+must+consider+when+determining+whether+a+monitor+is+appropriate+and+how+to+tailor+the+scope+of+a+monitor%26%238217%3Bs+review.%C2%A0+For+companies+that+do+find+themselves+in+a+resolution%2C+these+ongoing+obligations+are+worth+factoring+into+planning.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3EIV.%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0+Practical+Considerations+Going+Forward%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EGiven+these+developments%2C+private+equity+sponsors+and+portfolio+company+senior+management+teams+may+want+to+consider%3A%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EPre-Acquisition+Due+Diligence%3C%2Fstrong%3E.+For+private+equity+sponsors+evaluating+potential+investments%2C+the+DOJ%E2%80%99s+enforcement+priorities+provide+useful+guidance+in+evaluating+investment+decisions+and+shaping+due+diligence+protocols+around+potential+compliance+risks.+Particular+focus+should+be+placed+on+compliance+with+the+FCPA%2C+trade+sanctions%2C+health+care+fraud+and+abuse+laws%2C+FDA+regulations%2C+consumer+product+safety+requirements%2C+and+tariff+obligations.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EPortfolio+Company+Compliance+Assessments%3C%2Fstrong%3E.+Private+equity+sponsors+may+want+to+consider+conducting+periodic+compliance+assessments+across+their+portfolio.+The+ECCP+framework+offers+a+useful+benchmark+for+these+reviews+as+well+as+for+GCs+looking+to+assess+the+strength+of+their+programs.%C2%A0+This+assessment+should+include+evaluation+of+program+design%2C+adequacy+of+resources+and+empowerment%2C+and+real-world+effectiveness.+%C2%A0Special+attention+should+be+paid+to+companies+operating+in+the+priority+enforcement+areas+identified+in+the+2025+report%3A+health+care%2C+life+sciences%2C+consumer+products%2C+government+contracting%2C+and+businesses+with+international+operations.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EVoluntary+Self-Disclosure+Assessment+and+Readiness%3C%2Fstrong%3E.+The+revised+CEP%E2%80%99s+emphasis+on+voluntary+self-disclosure+as+the+path+to+declination+is+worth+understanding%2C+particularly+for+companies+thinking+about+how+they+would+respond+if+potential+misconduct+were+identified.+Companies+benefit+from+having+clear+internal+reporting+mechanisms%2C+investigation+protocols%2C+and+decision+frameworks+for+evaluating+whether+voluntary+self-disclosure+is+appropriate+when+potential+misconduct+is+identified.+%C2%A0The+Liberty+Mutual+outcome+demonstrates+the+benefits+of+timely+disclosure%2C+full+cooperation%2C+and+appropriate+remediation.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ECompensation+and+Clawback+Provisions%3C%2Fstrong%3E.+The+DOJ%E2%80%99s+Pilot+Program+on+Compensation+Incentives+and+Clawbacks+is+worth+considering+when+private+equity+sponsors+and+portfolio+company+boards+review+executive+compensation+arrangements.+Incorporating+compliance-related+criteria+and+clawback+provisions+may+be+worthwhile.%C2%A0+Such+provisions+may+also+provide+fine+reduction+benefits+in+the+event+of+a+resolution.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EInternational+Operations+Review%3C%2Fstrong%3E.+Portfolio+companies+with+international+operations%2C+particularly+those+involving+government+customers+or+operating+in+higher-risk+jurisdictions%2C+may+benefit+from+periodic+FCPA+and+anti-bribery+compliance+reviews.+The+FCPA+Guidelines%E2%80%99+focus+on+conduct+involving+cartels+and+transnational+criminal+organizations%2C+unfair+competitive+advantages%2C+national+security+implications%2C+and+substantial+bribe+payments+can+help+inform+risk+assessment+priorities.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EProduct+Safety+and+Regulatory+Compliance%3C%2Fstrong%3E.+For+portfolio+companies+manufacturing+or+distributing+consumer+products%2C+medical+devices%2C+pharmaceuticals%2C+or+food+products%2C+this+is+a+good+time+to+review+product+safety+compliance+programs%2C+including+defect+reporting+obligations+under+the+Consumer+Product+Safety+Act+and+FDA+regulations.+The+HSU%E2%80%99s+focus+on+knowing+failures+to+report+defects+or+hazards+underscores+the+importance+of+timely+reporting+and+remediation.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3ETrade+Compliance+Programs%3C%2Fstrong%3E.+With+the+establishment+of+the+Trade+Fraud+Task+Force+and+the+MGC+Unit%26%238217%3Bs+first+trade+fraud+case+in+2025%2C+companies+engaged+in+international+trade+may+want+to+take+a+fresh+look+at+tariff+and+customs+compliance+programs.+This+is+particularly+important+given+current+trade+policy+developments+and+heightened+tariff+enforcement.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EOngoing+Monitoring+and+Board+Reporting%3C%2Fstrong%3E.+Regular+monitoring+and+board-level+reporting+on+compliance+matters+remains+a+best+practice.+The+DOJ%E2%80%99s+oversight+of+39+active+resolutions+with+reporting+obligations+is+a+reminder+that+compliance+is+an+ongoing+commitment%2C+not+a+one-time+exercise.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3EV.%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0+Conclusion%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+DOJ+Fraud+Section%26%238217%3Bs+2025+Year+in+Review+reflects+an+active+and+evolving+enforcement+environment.+%C2%A0The+record-setting+activity%2C+expansion+into+new+areas+like+consumer+protection+and+trade+fraud%2C+and+renewed+willingness+to+indict+corporations+all+suggest+that+compliance+deserves+continued+attention+at+the+board+and+management+level.+%C2%A0For+private+equity+sponsors+and+portfolio+company+senior+management%2C+the+report+offers+helpful+insight+into+the+DOJ%E2%80%99s+current+thinking+and+priorities%E2%80%94information+that+can+inform+thoughtful+investment+decisions%2C+compliance+planning%2C+and+risk+management.+%C2%A0We+are+happy+to+discuss+any+of+these+developments+in+more+detail+and+how+they+may+relate+to+your+specific+situation.%3C%2Fspan%3E%3C%2Fp%3E%0A11.19.25Consero: Corporate Litigation & Investigations Forum
%3Cp%3ENovember+19%E2%80%9321%2C+2025%3C%2Fp%3E%0A%3Cp%3EThe+Biltmore+Miami%2C+Coral+Gables%2C+FL%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EMassumi+%2B+Consoli+was+proud+to+sponsor+the+Consero+Corporate+Litigation+%26amp%3B+Investigations+Forum+in+Miami.+Our+Litigation+partners%2C%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22%3EMichael+Huttenlocher%3C%2Fa%3E+%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3Eand%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Flewis-zirogiannis-pc%2F%22%3ELewis+Zirogiannis%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%2C+led+the+Forum%E2%80%99s+inaugural+Tabletop+Talks+sessions+on+%E2%80%9CTransactional+Litigation%3A+Mitigating+Risks+in+Corporate+Deals+and+Disputes%E2%80%9D+and+%E2%80%9CWhite+Collar+Crime+in+Focus%3A+Emerging+Trends+and+FCPA+Enforcement.%E2%80%9D+Both+sessions+offered+practical+perspectives+on+emerging+risks%2C+evolving+enforcement+trends+and+challenges+facing+today%E2%80%99s+in-house+legal+teams.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EDuring+the+transactional+litigation+discussion%2C+in-house+counsel+highlighted+several+themes+that+continue+to+shape+deal+execution+and+dispute+strategy.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EMany+legal+teams+are+actively+exploring+ways+to+incorporate+AI+into+their+workflows+but+remain+cautious+about+protecting+privilege+and+maintaining+the+confidentiality+of+sensitive+company+data.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EParticipants+also+noted+the+growing+complexity+of+regulatory+compliance%2C+particularly+for+companies+with+operations+in+California%2C+which+is+often+described+as+navigating+%E2%80%9CCalifornia+vs.+49+other+states.%E2%80%9D%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3ELitigation+cost+management+was+another+recurring+topic%2C+with+attendees+emphasizing+the+importance+of+transparency+and+open+communication+to+support+effective+partnership+between+internal+teams+and+outside+counsel.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+white+collar+and+FCPA+session+underscored+the+renewed+momentum+in+enforcement+activity.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EFCPA+enforcement+activity+is+reaccelerating%2C+with+DOJ+signaling+a+strengthened+focus+on+individual+accountability%2C+recidivist+scrutiny+and+heightened+expectations+around+compliance+controls+across+global+operations.+Early+internal+response+and+disciplined+fact+development+remain+essential%2C+though+companies+may+need+to+reassess+voluntary+disclosure+strategies+in+light+of+recent+developments%2C+including+the+DOJ%E2%80%99s+Corporate+Enforcement+Policy+and+the+%3Cem%3ELiberty+Mutual%3C%2Fem%3E+FCPA+declination+%28August+2025%29.%3C%2Fspan%3E%3C%2Fli%3E%0A%3Cli%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EAttendees+also+discussed+the+increasing+scrutiny+around+attorney-client+privilege+and+work+product+protections+in+internal+investigations.+The+Sixth+Circuit%E2%80%99s+decision+in+%3Cem%3EIn+re+FirstEnergy+Corp.%3C%2Fem%3E%2C+No.+24-3654+%286th+Cir.+Oct.+3%2C+2025%29%2C+narrowed+privilege+where+investigative+communications+lacked+sufficient+independence+or+blurred+roles+among+management%2C+the+board+and+outside+counsel.+The+case+highlights+the+importance+of+structuring+investigations+with+clear+oversight%2C+defined+roles+and+disciplined+communication+protocols.%3C%2Fspan%3E%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+conversations+throughout+the+Forum+reflected+the+rapidly+evolving+landscape+facing+corporate+legal+departments.+As+regulatory+demands+increase+and+enforcement+expectations+intensify%2C+organizations+are+navigating+more+complex+investigations%2C+heightened+compliance+obligations+and+ongoing+pressure+to+manage+litigation+efficiently.%3C%2Fspan%3E%3C%2Fp%3E%0A -
11.04.25
Michael Huttenlocher Recognized as a “Future Star” by Benchmark Litigation
%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2F%22+target%3D%22_blank%22+rel%3D%22noopener%22%3EMassumi+%2B+Consoli%3C%2Fa%3E+is+pleased+to+announce+that+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22+target%3D%22_blank%22+rel%3D%22noopener%22%3EMichael+Huttenlocher%3C%2Fa%3E+has+been+recognized+as+a+%E2%80%9CFuture+Star%E2%80%9D+in+the+2026+edition+of+%3Cem%3EBenchmark+Litigation%3C%2Fem%3E.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cem%3EBenchmark+Litigation%3C%2Fem%3E%C2%A0is+a+respected+guide+to+the+nation%E2%80%99s+leading+litigation+firms+and+attorneys.+Its+rankings+are+informed+by+comprehensive+research%2C+including+interviews+with+litigators%2C+dispute-resolution+professionals+and+clients%2C+as+well+as+analysis+of+significant+cases+and+firm+developments.%3C%2Fspan%3E%3C%2Fp%3E%0A08.11.25Protecting Executives from Deposition Using the Apex Witness Doctrine—Lessons Learned from Lionel Messi and Logan Paul
%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3Eby+%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22%3EMichael+R.+Huttenlocher%3C%2Fa%3E%3C%2Fspan%3E+and+%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fabigail-blaker%2F%22%3EAbigail+Blaker%3C%2Fa%3E%3C%2Fspan%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EPlaintiffs+all+too+often+seek+to+depose+a+business%E2%80%99+most+senior+executives%E2%80%94officers%2C+board+members%2C+and+other+%E2%80%9Capex%E2%80%9D+officials%E2%80%94in+an+attempt+to+create+tactical+leverage+to+pressure+an+early+settlement.+The+strategy+is+often+deployed+in+litigation+against+the+portfolio+companies+of+private+equity+sponsors.+Plaintiffs%E2%80%99+counsel+frequently+seek+to+depose+high-ranking+executives+of+those+sponsors%2C+hoping+that+the+inconvenience+and+distraction+of+a+deposition+motivates+an+early+resolution.+The+apex+witness+doctrine+has+emerged+as+a+critical+judicial+safeguard+to+defend+high-ranking+executives+from+this+common+ploy.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+apex+witness+doctrine+shields+high-profile+witnesses+from+deposition+unless+it+is+established+that+%281%29+the+witness+has+unique%2C+firsthand+knowledge+of+the+specific+facts+at+issue%2C+and+%282%29+there+are+no+less+intrusive+means+of+obtaining+the+factual+knowledge+or+that+those+less+intrusive+means+have+been+exhausted+without+success.%3Ca+style%3D%22color%3A+%237f7f7f%3B%22+href%3D%22%23_ftn1%22+name%3D%22_ftnref1%22%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%5B1%5D%3C%2Fspan%3E%3C%2Fa%3E%C2%A0The+doctrine+ensures+that+discovery+remains+focused%2C+efficient%2C+and+fair%2C+and+that+high-profile+individuals+are+not+subjected+to+unnecessary+business+disruption+absent+a+clear+showing+of+need.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3ECounsel+for+soccer+superstar+Lionel+Messi+recently+employed+the+apex+witness+doctrine+to+shield+him+from+sitting+for+a+deposition+in+the+hotly+contested+trademark+and+trade+dress+dispute+over+Messi%E2%80%99s+sports+drink+%E2%80%9CM%C3%81S%2B%E2%80%9D+and+Logan+Paul%E2%80%99s+rival+beverage+%E2%80%9CPrime.%E2%80%9D%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftn2%22+name%3D%22_ftnref2%22%3E%5B2%5D%3C%2Fa%3E%3C%2Fspan%3E+Early+in+discovery%2C+Prime+sought+Messi%E2%80%99s+deposition+and+Messi+responded+that+%281%29+he+had+no+unique+or+personal+knowledge+relevant+to+the+claim+because+he+wasn%E2%80%99t+a+key+marketing+or+trade+dress+decision-maker%3B+%282%29+any+information+he+had+could+be+more+easily+obtained+through+other+witnesses%2C+including+several+members+of+his+management+team+who+attended+all+relevant+meetings+alongside+him%3B+and+%283%29+a+deposition+would+impose+an+undue+burden+on+him%2C+given+his+soccer+schedule+and+extensive+professional+commitments.%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftn3%22+name%3D%22_ftnref3%22%3E%5B3%5D%3C%2Fa%3E%3C%2Fspan%3E+On+July+23%2C+2025%2C+the+U.S.+District+Court+for+the+Southern+District+of+New+York%2C+noting+that+Prime+had+not+first+attempted+to+depose+other+witnesses+or+employ+any+less+intrusive+means+of+discovery%2C+ordered+that+Messi+be+shielded+from+deposition+under+the+apex+witness+doctrine%2C+unless+it+could+be+later+shown+that+he+had+some+unique+knowledge+that+was+unavailable+from+other+sources.%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftn4%22+name%3D%22_ftnref4%22%3E%5B4%5D%3C%2Fa%3E%3C%2Fspan%3E%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EBy+granting+the+protective+order+for+Messi%2C+the+Court+reaffirmed+that+high-profile+individuals+are+entitled+to+protection+from+unnecessary+and+burdensome+discovery%2C+and+that+parties+seeking+such+depositions+must+make+a+concrete+showing+that+the+individual+possesses+unique+knowledge+relevant+to+the+claim+and+that+such+parties+had+exhausted+alternative+sources+first.+Although+it+is+not+an+absolute+bar+to+discovery%2C+the+apex+witness+doctrine+is+a+powerful+shield+that+can+be+used+to+fight+back+against+the+aggressive+litigation+tactics+employed+against+high-ranking+executives.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftnref1%22+name%3D%22_ftn1%22%3E%5B1%5D%3C%2Fa%3E%3C%2Fspan%3E+%3Cem%3EChang+v.+Mizuho+Sec.+USA+LLC%3C%2Fem%3E%2C+No.+21-cv-03874+%28MMG%29%2C+2024+WL+3824101%2C+at+%2A2+%28S.D.N.Y.+Aug.+15%2C+2024%29.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftnref2%22+name%3D%22_ftn2%22%3E%5B2%5D%3C%2Fa%3E%3C%2Fspan%3E+%3Cem%3ESee+%3C%2Fem%3EOrder%2C+%3Cem%3EMark+Anthony+Int%E2%80%99l+SRL+v.+Prime+Hydration%2C+LLC%3C%2Fem%3E%2C+No.+24+Civ.+7620+%28PAE%29%2C+ECF+No.+78+%28S.D.N.Y.+July+23%2C+2025%29.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftnref3%22+name%3D%22_ftn3%22%3E%5B3%5D%3C%2Fa%3E%3C%2Fspan%3E+%3Cem%3EId.+%3C%2Fem%3Eat+3.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cspan+style%3D%22color%3A+%23be9b64%3B%22%3E%3Ca+style%3D%22color%3A+%23be9b64%3B%22+href%3D%22%23_ftnref4%22+name%3D%22_ftn4%22%3E%5B4%5D%3C%2Fa%3E%3C%2Fspan%3E+%3Cem%3EId.+%3C%2Fem%3Eat+6.%3C%2Fspan%3E%3C%2Fp%3E%0A10.11.24Disparaging Statements Made in Litigation Support Cancellation of a Founder's Equity
%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EBy%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22%3EMichael+R.+Huttenlocher%3C%2Fa%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EPrivate+equity+transactions+often+feature+the+retention+of+management+with+either+a+rollover+of+equity+or+grant+of+incentive+equity+in+a+Delaware+LLC.+Often%2C+those+equity+issuances+require+that+members+not+make+any+disparaging+statements+about+the+LLC.+A+typical+consequence+of+violating+such+requirement+is+the+triggering+of+a+unit+repurchase+option+in+the+LLC+Agreement.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EWhat+if+a+member+makes+disparaging+statements+about+an+LLC+in+a+lawsuit+against+the+LLC+%26%238211%3B+%26%238211%3B+can+the+LLC+repurchase+the+member%E2%80%99s+units%3F+Can+a+member+rely+on+the+absolute+litigation+privilege+to+shield+its+good+faith+allegations+from+triggering+the+repurchase+obligation%3F%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+answer%2C+according+to+a+recent+Delaware+Chancery+Court+decision%2C+is+that+the+LLC+%3Cem%3E%3Cstrong%3Ecan%3C%2Fstrong%3E+%3C%2Fem%3Erepurchase+a+member%E2%80%99s+equity+based+on+disparaging+statements+made+in+litigation.+In+S%3Cem%3Eeva+Holdings+Inc.+v.+Octo+Platform+Equity+Holdings%2C+LLC%3C%2Fem%3E%2C+a+founder%E2%80%99s+business+was+acquired+and%2C+as+part+of+the+transaction%2C+he+received+membership+interests+in+Octo+Platform+Equity+Holdings%2C+LLC+%28%E2%80%9COcto%E2%80%9D%29.+Under+the+Octo+LLC+agreement%2C+a+repurchase+option+is+triggered+if+%28among+other+circumstances%29+a+member+breaches+his+non-disparagement+obligations.+Here%2C+the+founder+and+Octo+disagreed+as+to%2C+among+other+things%2C+how+the+post-acquisition+company+would+operate.+Those+disagreements+spilled+over+into+the+courts+when+the+founder+filed+suit+in+Virginia+state+court+making%2C+as+admitted+by+the+founder%2C+disparaging+statements+against+Octo.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EAfter+the+lawsuit+was+filed%2C+Octo+sent+the+founder+a+repurchase+notice+and+repurchase+agreement.+The+founder+refused+to+sign.+Octo+then+canceled+the+founder%E2%80%99s+membership+interests.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+founder+argued+that+his+derogatory+statements+could+not+be+used+to+support+the+repurchase+option.+Under+Delaware+law%2C+the+absolute+litigation+privilege+protects+litigants+from+defamation+liability+and+contractual+non-disparagement+claims+based+on+statements+made+during+litigation+so+that+parties+can+freely+argue+their+claims.+The+founder+argued+that+enforcing+Octo%E2%80%99s+repurchase+option+runs+afoul+of+the+privilege+and+would+impermissibly+chill+the+founder%E2%80%99s+litigation+against+Octo.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+Court+disagreed.+The+Court+held+that+while+the+litigation+privilege+protects+litigants+from+liability+for+defamation+or+a+contractual+non-disparagement+claim%2C+it+%3Cem%3E%3Cstrong%3Edoes+not%3C%2Fstrong%3E%3C%2Fem%3E+extend+protection+to+triggering+a+repurchase+provision+in+an+LLC+agreement+because+it+touches+on+the+internal+affairs+of+a+company+agreed+to+by+its+members%2C+which+Delaware+is+%E2%80%9Cstrongly+inclined%E2%80%9D+to+respect.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThis+is+an+important+case+for+sponsors+and+founders+alike%2C+as+statements+made+in+litigation+may+have+consequences+outside+of+the+courtroom%21%3C%2Fspan%3E%3C%2Fp%3E%0A -
06.17.24
Massumi + Consoli Launches Litigation & Dispute Resolution Practice to Enhance Its Offering for Private Equity Firms and Dynamic Enterprises
%3Ch3%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EMichael+R.+Huttenlocher+Joins+the+Firm+to+Lead+New+Practice%3C%2Fspan%3E%3C%2Fh3%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2F%22%3EMassumi+%2B+Consoli%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%2C+a+nationwide+law+firm+focused+on+private+equity+transactional+work%2C+is+pleased+to+announce+the+launch+of+its+new%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fcapabilities%2Flitigation-dispute-resolution%2F%22%3ELitigation+%26amp%3B+Dispute+Resolution+practice%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E.+The+practice+will+be+led+by%3C%2Fspan%3E+%3Ca+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fmichael-r-huttenlocher%2F%22%3EMichael+R.+Huttenlocher%3C%2Fa%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%2C+who+joins+the+firm+as+a+Partner+in+its+New+York+office+from+McDermott+Will+%26amp%3B+Emery+LLP.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EUnder+Mike%E2%80%99s+leadership%2C+the+new+practice+will+work+closely+with+the+firm%E2%80%99s+corporate+team+to+deliver+strategic+advice+and+counsel+to+clients+as+they+navigate+complex+transaction-related+litigation+and+other+high-stakes+disputes.+By+adding+a+litigation+and+dispute+resolution+practice%2C+the+firm+will+provide+a+more+comprehensive+offering+to+its+acquisitive+clients+throughout+the+entire+life+cycle+of+their+investments.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%E2%80%9CThe+addition+of+Mike+and+the+Litigation+%26amp%3B+Dispute+Resolution+practice+is+a+testament+to+our+commitment+to+growth+and+innovation+for+our+clients%2C%E2%80%9D+said+%3Ca+style%3D%22color%3A+%237f7f7f%3B%22+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fpeter-massumi-pc%2F%22%3EPeter+Massumi%3C%2Fa%3E%2C+co-founder+of+Massumi+%2B+Consoli.+%E2%80%9CUnfortunately%2C+even+parties+with+the+best+intentions+can+end+up+in+disputes+in+the+context+of+transactions.+Our+litigation+team+will+partner+with+our+M%26amp%3BA+group+throughout+the+deal+execution+process+to+manage+post-transaction+dispute+risk+and+swiftly+address+any+controversies+that+do+arise.%E2%80%9D%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EThe+firm%E2%80%99s+new+Litigation+%26amp%3B+Dispute+Resolution+practice+is+unique+in+the+marketplace+and+will+have+a+distinct+focus+on+private+equity+and+M%26amp%3BA+dispute+resolution%2C+providing+acquisitive+businesses+with+comprehensive+counsel+across+a+broad+range+of+matters%2C+including+litigating+and+arbitrating+post-closing+controversies%2C+such+as+purchase+price+adjustment+and+earnout+disputes%2C+indemnity+claims+and+representation+and+warranty+insurance-related+conflicts%2C+and+representing+portfolio+companies+in+any+post-acquisition+investigations+or+litigation%2C+such+as+matters+relating+to+corporate+governance%2C+securities+litigation%2C+labor+and+employment+controversies+and+general+commercial+disputes.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EA+prominent+litigator%2C+Mike+has+extensive+courtroom+experience+and+has+represented+clients+in+various+complex+controversies%2C+including+domestic+and+cross-border+deal+litigation%2C+corporate+governance+disputes%2C+white+collar+and+regulatory+defense%2C+commercial+and+securities+litigation%2C+complex+settlements%2C+appeals+and+arbitrations.+Mike+is+admitted+to+the+bars+of+the+Supreme+Court+of+the+United+States%2C+the+United+States+Court+of+Appeals+for+the+Second+Circuit+and+the+United+States+District+Courts+for+the+Southern%2C+Eastern+and+Western+Districts+of+New+York.%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%E2%80%9CMike%E2%80%99s+practice+is+a+perfect+complement+to+our+leading+Private+Equity+and+M%26amp%3BA+practice%2C+and+his+expertise+will+allow+us+to+deliver+new+value-added+services+and+capabilities+to+better+meet+the+needs+of+our+clients%2C%E2%80%9D+said+%3Ca+style%3D%22color%3A+%237f7f7f%3B%22+href%3D%22https%3A%2F%2Fmcllp.com%2Fpeople%2Fanthony-consoli-pc%2F%22%3EAnthony+Consoli%3C%2Fa%3E%2C+the+firm%E2%80%99s+other+co-founder.+%E2%80%9CWe%E2%80%99ve+long+recognized+the+need+for+this+solution+in+the+marketplace%2C+and+today%E2%80%99s+announcement+aligns+with+the+firm%E2%80%99s+broader+vision+to+serve+as+a+one-stop-shop+for+the+evolving+legal+needs+of+middle+market+and+large+cap+private+equity+sponsors+and+other+acquisitive+enterprises.%E2%80%9D%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%E2%80%9CI%E2%80%99m+thrilled+to+join+the+talented+team+at+Massumi+%2B+Consoli.+The+opportunity+to+build+something+from+the+ground+up+is+a+once-in-a-career+opportunity%2C+and+the+firm%E2%80%99s+rapid+growth+and+ascendant+profile+makes+it+an+exciting+place+to+innovate%2C%E2%80%9D+added+Mike.+%E2%80%9CBy+combining+my+litigation+background+with+the+firm%E2%80%99s+deep+transactional+capabilities+and+relationship-focused+approach%2C+we+can+offer+clients+a+unique+advantage+in+navigating+complex+disputes%2C+protecting+their+investments+and+achieving+optimal+outcomes.%E2%80%9D%3C%2Fspan%3E%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3E%3Cstrong%3EAbout+Massumi+%2B+Consoli%3C%2Fstrong%3E%3C%2Fspan%3E%3Cbr+%2F%3E%0A%3Cspan+style%3D%22color%3A+%237f7f7f%3B%22%3EMassumi+%2B+Consoli+is+a+nationwide+law+firm+that+delivers+exceptional+expertise+and+an+unmatched+client+experience+specifically+tailored+to+middle+market+private+equity+firms+and+other+financial+sponsors%2C+as+well+as+dynamic+and+acquisitive+enterprises.+Founded+in+2015+as+a+spin-out+from+the+Private+Equity+and+M%26amp%3BA+Group+of+Kirkland+%26amp%3B+Ellis%2C+the+firm%E2%80%99s+approach+combines+the+proficiency+of+the+best+large+international+law+firms+with+a+highly+personalized%2C+boutique+experience.%3C%2Fspan%3E%3C%2Fp%3E%0A