A unit of
The suit is an attempt to put Jones Day on the hook in case Schulz is unable to pay all or part of a $755.5 million arbitration award Precision won in April. Schulz is currently in “preliminary insolvency proceedings” and the subject of a criminal investigation in Germany, Precision claimed in its Sept. 24 complaint.
According to the suit, Jones Day conspired with Schulz to create a misleading picture of the German company’s value. Toward that end, the firm’s lawyers drafted documents including a securities purchase agreement and disclosure statements they knew were false, Precision claims.
Schulz also failed to disclose documents, including a restructuring analysis performed by
“Precision was led to believe that the companies it was acquiring were successful, financially strong and on track to meet their projections,” the company said in its complaint. Instead, the Schulz subsidiaries “were in dire financial straits, had retained insolvency advisors and could not satisfy their considerable debt obligations.”
About half of Precision’s allegations against Jones Day were redacted from the publicly available version of the lawsuit based on the law firm’s claims that they could reveal privileged attorney-client communications. Precision argues the privilege shouldn’t apply because the information was used to further Schulz’s fraud and because the German company and its lawyers at Jones Day waived any privilege by turning over documents to Precision.
Buffett, 90, bought Precision for $37 billion in 2016. The Portland, Oregon-based company makes metal industrial components for jet engines and power plants, as well as pipes for the oil and gas industry.
The case is Precision Castparts Corp. v. Jones Day, 2020-59685, Texas District Court, Harris Co. (Houston).
(Adds details from complaint)
To contact the reporter on this story:
To contact the editors responsible for this story:
Anthony Lin, Steve Stroth
© 2020 Bloomberg L.P. All rights reserved. Used with permission.