Brocade Communications Systems, seeking to recoup losses from
the company's stock-option scandal, has decided to pursue racketeering
claims against 10 former executives and directors of the company,
including former Chief Executive Gregory Reyes, now in prison for his
role in the backdating.
However, in court filings released Monday, the company announced it did
not plan to pursue claims against Silicon Valley über-lawyer Larry
Sonsini and his firm, Wilson Sonsini Goodrich & Rosati.
Brocade's special litigation committee emphasized that Sonsini, who had
played controversial dual roles at Brocade as both its corporate
counsel and as a board member, and his firm had maintained that they
had been misled by Reyes.
The filings revealed that another reason was a $9.5 million
"contribution" from Wilson Sonsini to defray legal expenses related to
the scandal.
"These guys did a very thorough investigation and found it would be
inappropriate to pursue a claim against the firm or any one of its
lawyers," said Wilson Sonsini spokeswoman Courtney Dorman.
In its 307-page filing, the litigation committee said it would assert
claims against the defendants under the Racketeer Influenced and
Corrupt Organizations Act, known as RICO, for violations of federal law.
The new Brocade suit also targets Stephanie Jensen, Brocade's former
vice president of human resources, who was also convicted of federal
crimes. It also names five other former