U.S. District Judge Nancy Atlas of the Southern District of Texas today denied R. Allen Stanford’s motion to disqualify Akin Gump Strauss Hauer & Feld from representing the defendants in Stanford’s insurance-coverage suit. In a Memorandum and Order, Atlas wrote that she is “sensitive” to preventing conflicts of interest, but “Stanford, however, has failed to satisfy his burden to demonstrate he personally was a former client of Akin Gump and has also waived any alleged conflict that may have existed.” On July 2, in Laura Pendergest-Holt, et al. v. Certain Underwriters at Lloyd’s of London, et al., Stanford filed a motion to disqualify Akin Gump on the ground that from about 2000 to early 2009, he and some Stanford Financial Group companies had “substantial dealings” in an “attorney/client capacity” with Akin Gump. Akin Gump, which represents the underwriters who issued the directors’ and officers’ policies covering Stanford and other former executives of Houston-based Stanford Group, filed a response under seal. In Pendergest-Holt, et al. v. Certain Underwriters at Lloyd's of London, et al., Stanford and three other former SFG executives seek coverage under directors-and-officers policies, which the insurance companies have denied on the ground the executives engaged in activities defined by the policies as money laundering. The executives claim the money-laundering exclusion should not apply, and a preliminary injunction hearing on that issue is set for Aug. 24. Stanford’s attorney, Robert S. Bennett, of Bennett Nguyen Joint Venture of Houston, says, “We are disappointed. We thought we had shown enough.” Bennett says Stanford may appeal. Barry Chasnoff and Neel Lane, partners in Akin Gump in San Antonio, represent the insurers. Chasnoff did not immediately return a telephone message, and Lane, who was out of the office, did not immediately respond to an e-mail. Akin Gump spokeswoman Kristen White did not immediately provide comment.
-- Brenda Sapino Jeffreys