New York Appeals Court Dismisses Attorney General's Case Against Kenneth Langone; Gary Naftalis Leads Langone Defense Team

On July 1, 2008, the Appellate Division of New York State Supreme Court dismissed the lawsuit that had been brought against Kenneth Langone relating to the compensation of former New York Stock Exchange chair Richard Grasso. Mr. Langone, former chair of the NYSE's compensation committee (as well as a founder of The Home Depot), had been sued along with Mr. Grasso by former Attorney General Eliot Spitzer for breach of fiduciary duty based on alleged violations of the Not-for-Profit Corporation Law.

Kramer Levin Naftalis & Frankel vigorously defended Mr. Langone through more than four years of protracted litigation that included 61 depositions taken over the course of 118 days, and dozens of decisions by the trial court and appellate courts. The last such decision from the appeals court threw out the remaining claims against Mr. Grasso and dismissed the claim against Mr. Langone based on the NYSE's conversion to a for-profit entity. The majority opinion stated that no public interest would be served through monies gained that would go to the NYSE's for-profit successor, New York Stock Exchange LLC. The court also determined that the attorney general's power to pursue the claims lapsed when the NYSE became a for-profit corporation.

Within hours of receiving the decision, Attorney General Andrew Cuomo announced that he would not appeal. Gary Naftalis, Co-Chairman of our Firm and Chairman of our Litigation Department, who led the defense, said: "We are gratified by the Appellate Division's decision dismissing the case against Mr. Langone. We always believed that this was a case that should never have been brought."

In addition to Mr. Naftalis, the Kramer Levin team included partner Ronald S. Greenberg and associates Brendan Schulman, Natan Hamerman, Christiaan Johnson-Green, Adam C. Ford, Scott Ruskay-Kidd and Amy Weiner.