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Morgan Stanley’s Failure to Produce Documents Found Offensive; Coleman’s Renewed Motion for Entry of Default Judgment Is Granted (in part)

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Judge Maass issued this order on March 23 in Coleman v. Morgan Stanley, a case in which Coleman Holdings is seeking $680 million in losses and $2 billion in punitive damages in connection with Morgan Stanley helping Sunbeam to falsely inflate its finances.

Both Morgan Stanley and its counsel, Kirkland & Ellis, were found to have participated in discovery abuses.

Thomas Clare, a Kirkland attorney, was characterized as “Conforming to what was by now his usual stonewall tactic…” He was barred from practice before Judge Maass.

Judge Maass found that Morgan Stanley was trying to hide information and included an extensive list of discovery abuses in her order. “…MS & Co. desperately wanted to hide an active SEC inquiry into its email retention practices.”

“The prejudice to CPH by these failings cannot be cured…The other discovery abuses outlined call into doubt all of MS & Co.’s discovery responses. The judicial system cannot function this way.”

Full text of the order can be found here.

According to the online docket at ClerkConnect, on March 24 Kirkland and Ellis’ motion to withdraw was granted and Morgan Stanley’s motions for an adverse inference instruction and sanctions for discovery abuses were both denied.