MAN AG v. Freightliner LLC – Fraudulent Transfer
On December 15, 2006, after a five week trial in state court in Portland, Ball Janik LLP obtained the largest jury verdict of the year in the United States and the largest punitive damages verdict in Oregon history. Ball Janik partner Rick Stone was the lead trial lawyer in the record-breaking case.
The case, a highly complex fraudulent transfer action (which also included successful claims of successor liability and piercing the corporate veil) on behalf of MAN AG, a German industrial company, against Freightliner LLC and its DaimlerChrysler affiliates, resulted in a verdict of $1.1 billion, with approximately $750 million in compensatory damages and $350 million in punitive damages. The punitive damages award was, by far, the largest in Oregon history. This case is a primary example of the aggregate skill of the firm’s trial lawyers in successfully handling complex, sophisticated business and accounting disputes.
The Ball Janik litigation team represented MAN in a lawsuit seeking approximately $850 million in damages resulting from fraudulent transfers made by an indirect subsidiary of DaimlerChrysler AG (now Daimler AG) and six of its U.S., Canadian, and Dutch subsidiaries, as well as punitive damages. In an underlying dispute between the parties, an English court issued a judgment in favor of MAN and against a Daimler subsidiary, and set an interim amount award in the amount of $250 million (which is in excess of $500 million at the current exchange rate). The interim award was to be adjusted based on a final trial on damages in England to be conducted near the end of 2007 or beginning of 2008. (The final amount totaled approximately $750 million, which increased the Oregon verdict to about $1.1 billion.) MAN’s claims were that, prior to the issuance of the English judgment, the DaimlerChrysler subsidiaries systematically stripped the English defendant of all assets available in order to render it judgment proof.
The Oregon complaint alleged violations of the Uniform Fraudulent Transfer Act, conspiracy, disregard of the corporate entity, and successor liability. After a five week jury trial concluding in December 2006, we received a verdict of approximately $750 million in compensatory damages and $350 million in punitive damages. This was the largest jury verdict in the United States in 2006 and the largest punitive damages award, by far, in Oregon history.