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Conflicts Detailed in Suit Over $92M Executive Payout


— February 10, 2004

Steel Hector & Davis, the powerhouse Miami law firm, is smarting from a federal judge’s findings that detail the conflicts, cozy relationships and questionable legal work behind the firm’s involvement in a controversial $92.3 million payout mostly to top executives of FPL Group Inc.

A handful of top FPL executives hit the jackpot in December 2000 when shareholders approved a merger with New Orleans-based Entergy Corp., another public utility holding company. Under FPL policy, such a “change of control” triggered lucrative, performance-based payouts totaling $62 million for eight high-ranking FPL executives.

But the deal fell through four months later amid recriminations on both sides. And angry shareholders soon went to court to demand the return of that $92 million to FPL’s treasury.

Steel Hector, led by partner Alvin B. Davis, was hired by a three-person committee created by FPL’s board of directors in the spring of 2001 to serve as its counsel as it studied the payouts after shareholders started filing lawsuits. Ultimately, that committee found no wrongdoing and recommended the board seek the dismissal of separate shareholder lawsuits then pending.

But in a January order allowing the shareholders’ lawsuits to continue, U.S. District Judge Alan S. Gold found the hiring of Steel Hector stacked the deck in favor of the FPL executives.

“The choice of Steel Hector carried with it some obvious conflicts,” Gold wrote.

Judge Gold’s 50-page ruling details those conflicts, according to this article from the Miami Daily Business Review via Law.com.


Steel Hector & Davis, the powerhouse Miami law firm, is smarting from a federal judge’s findings that detail the conflicts, cozy relationships and questionable legal work behind the firm’s involvement in a controversial $92.3 million payout mostly to top executives of FPL Group Inc.

A handful of top FPL executives hit the jackpot in December 2000 when shareholders approved a merger with New Orleans-based Entergy Corp., another public utility holding company. Under FPL policy, such a “change of control” triggered lucrative, performance-based payouts totaling $62 million for eight high-ranking FPL executives.

But the deal fell through four months later amid recriminations on both sides. And angry shareholders soon went to court to demand the return of that $92 million to FPL’s treasury.

Steel Hector, led by partner Alvin B. Davis, was hired by a three-person committee created by FPL’s board of directors in the spring of 2001 to serve as its counsel as it studied the payouts after shareholders started filing lawsuits. Ultimately, that committee found no wrongdoing and recommended the board seek the dismissal of separate shareholder lawsuits then pending.

But in a January order allowing the shareholders’ lawsuits to continue, U.S. District Judge Alan S. Gold found the hiring of Steel Hector stacked the deck in favor of the FPL executives.

“The choice of Steel Hector carried with it some obvious conflicts,” Gold wrote.

Judge Gold’s 50-page ruling details those conflicts, according to this article from the Miami Daily Business Review via Law.com.

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