Citi Obtains Summary Judgment

July 10, 2008

Ending more than five years of litigation, on July 10, Judge Robert Sweet of the U.S. District Court for the Southern District of New York granted summary judgment to Cleary Gottlieb’s client, Citigroup Global Markets, in Lesavoy v. Lane, et al., an action brought by a successor trustee of two trusts that allegedly suffered significant losses trading commodity options and futures through a Smith Barney brokerage account.

After the Second Circuit affirmed his dismissal of seven of the eight counts in the original Complaint and the parties conducted discovery on the remaining count of aiding and abetting a breach of fiduciary duty, Judge Sweet found no evidence of aiding and abetting and rendered judgment for Citi. Additionally, Judge Sweet agreed with Cleary Gottlieb’s argument that the trust instruments’ offer of “full protection” to parties who carried out the trustee’s instructions entitled Citi to indemnification for its costs in defending the lawsuit and ordered the trusts’ reimbursement of all attorneys’ fees and expenses incurred by Citi.