E*Trade v. Deutsche Bank

Summary

Breach of contract and fraud claims by E*Trade against Deutsche Bank. E*Trade alleged that Germany's Deutsche Bank made an accounting error, by overlooking a $27M service fees deduction that should already have been taken, and as a result overstated by $15M the value of a business that Deutsche Bank sold to E*Trade in 2002. (The business that E*Trade bought, DRAFCO, held the equity interest in securitized recreational vehicle (RV) loans.)

E*Trade claimed that because the value of DRAFCO's deferred tax assets (DTA) was overstated and did not comply with GAAP, E*Trade paid about $15M more for DRAFCO than it should have pursuant to a stock purchase agreement. According to E*Trade, Deutsche Bank subsequently learned of the error, and tried to hide it.

Deutsche Bank claimed that E*Trade's accountant had a full chance to review the deferred tax asset, and that E*Trade failed in its due diligence duty. According to Deutsche Bank, the DTA was miscalculated long before the deal was contemplated, and therefore Deutsche Bank did not act with fraudulent intent.

Judge Sweet denied E*Trade's fraud claims, but ruled in favor of E*Trade on all of E*Trade's breach of contract claims, awarding E*Trade $18M in damages, plus costs and attorney fees.

Outcome

Damages: 18,000,000

Case Information

Attorneys

Witnesses

Plaintiff: E*Trade Financial Corporation
Defense: Deutsche Bank, AG
Verdict: $18,000,000

Judge: Robert Sweet
Jurisdiction: USDC, Southern District of New York
Court: Daniel Patrick Moynihan US Courthouse

Case Number: 05-cv-00902
Industry: Finance
Practice Area: Securities, Financial Services, Commercial Law, Fraud, Mergers and Acquisitions

Plaintiff

E*Trade Financial Corporation

Represented By:
Lobel, Douglas (Cooley Godward Kronish LLP)
Cahill, Bob (Cooley Godward Kronish LLP)

Defense

Deutsche Bank, AG

Expert Witnesses

Lay Witnesses

Sessions

Attorney

Witness

Type

Description

AM Session

Plaintiff Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:05	General Case Activities
00:00:50	Opening Statement	Lobel, Douglas
00:42:40	Opening Statement	Musoff, Scott
01:22:04	Break
01:55:00	Witness Direct Examination	Lobel, Douglas	Montgomery, Belinda	In Person

PM Session

Plaintiff Witness(es)

2 Chapters

			Description	Attorney	Witness	Presence
		01:29:46	Break
		01:41:10	Witness Cross Examination	Berman, Jeremy	Montgomery, Belinda	In Person

OCT

AM Session

Plaintiff Witness(es)

3 Chapters

PM Session

Plaintiff Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:11	General Case Activities
00:00:42	Witness Cross Examination	Berman, Jeremy	Montgomery, Belinda	In Person
01:27:22	Break
01:38:50	Witness Cross Examination	Berman, Jeremy	Montgomery, Belinda	In Person
02:04:48	Witness Direct Examination	Lobel, Douglas	Berliner, Mr. Robert CPA, CFE, CFF	In Person

OCT

AM Session

Plaintiff Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:11	General Case Activities
00:01:03	Witness Cross Examination	Musoff, Scott	Berliner, Mr. Robert CPA, CFE, CFF	In Person
01:04:10	Witness Re-Direct Examination	Lobel, Douglas	Berliner, Mr. Robert CPA, CFE, CFF	In Person
01:21:01	Break
01:33:21	Witness Re-Direct Examination	Lobel, Douglas	Berliner, Mr. Robert CPA, CFE, CFF	In Person

PM Session

Plaintiff Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:16	Witness Re-Direct Examination	Lobel, Douglas	Berliner, Mr. Robert CPA, CFE, CFF	In Person
00:09:21	Witness Re-Cross Examination	Musoff, Scott	Berliner, Mr. Robert CPA, CFE, CFF	In Person
01:38:30	Break
01:45:51	Witness Re-Cross Examination	Musoff, Scott	Berliner, Mr. Robert CPA, CFE, CFF	In Person
01:58:46	End of Session

OCT

AM Session

Not in Session

0 Chapters

PM Session

Not in Session

0 Chapters

OCT

AM Session

Defense Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:10	General Case Activities
00:02:05	Witness Direct Examination	Berman, Jeremy	Staffeldt, Mr. Till	In Person
01:18:33	Break
01:30:37	Witness Cross Examination	Cahill, Bob	Staffeldt, Mr. Till	In Person
02:23:59	Witness Re-Direct Examination	Berman, Jeremy	Staffeldt, Mr. Till	In Person

PM Session

Defense Witness(es)

4 Chapters

	Description	Attorney	Witness	Presence
00:00:12	General Case Activities
00:01:26	Witness Direct Examination	Lobel, Douglas	Gaertner , Mr. Ulrich	In Person
01:57:27	Break
02:09:57	Witness Direct Examination	Lobel, Douglas	Gaertner , Mr. Ulrich	In Person

OCT

AM Session

Plaintiff Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:04	General Case Activities
00:01:41	Witness Direct Examination	Lobel, Douglas	Gaertner , Mr. Ulrich	In Person
00:24:46	Witness Cross Examination	Musoff, Scott	Gaertner , Mr. Ulrich	In Person
01:40:01	Witness Re-Direct Examination	Lobel, Douglas	Gaertner , Mr. Ulrich	In Person
01:57:22	Witness Re-Cross Examination	Musoff, Scott	Gaertner , Mr. Ulrich	In Person

PM Session

Plaintiff Witness(es)

2 Chapters

			Description	Attorney	Witness	Presence
		00:00:11	General Case Activities
		00:04:53	Witness Direct Examination	Lobel, Douglas	Ruddell, Mr. Barry	In Person

OCT

AM Session

Plaintiff Witness(es)

3 Chapters

	Description	Attorney	Witness	Presence
00:00:10	General Case Activities
00:05:40	Witness Cross Examination	Vigna, Jason	Ruddell, Mr. Barry	In Person
01:08:08	Witness Re-Direct Examination	Lobel, Douglas	Ruddell, Mr. Barry	In Person

PM Session

Plaintiff Witness(es)

9 Chapters

	Description	Attorney	Witness	Presence
00:00:10	General Case Activities
00:01:05	Witness Re-Direct Examination	Lobel, Douglas	Ruddell, Mr. Barry	In Person
00:07:25	Witness Re-Cross Examination	Vigna, Jason	Ruddell, Mr. Barry	In Person
00:10:11	Witness Direct Examination	Lobel, Douglas	Mackey, Mr. Todd	In Person
00:52:44	Witness Cross Examination	Musoff, Scott	Mackey, Mr. Todd	In Person
01:30:41	Break
01:43:47	Witness Cross Examination	Musoff, Scott	Mackey, Mr. Todd	In Person
02:04:15	General Case Activities
02:12:13	Witness Direct Examination	Lobel, Douglas	Ferino, Mr. Anthony	In Person

OCT

AM Session

Plaintiff Witness(es)

6 Chapters

PM Session

Plaintiff Witness(es)

3 Chapters

	Description	Attorney	Witness	Presence
00:00:11	Witness Cross Examination	Musoff, Scott	Audette, Mr. Matt	In Person
01:50:10	Witness Re-Direct Examination	Lobel, Douglas	Audette, Mr. Matt	In Person
02:04:49	Witness Re-Cross Examination	Musoff, Scott	Audette, Mr. Matt	In Person

OCT

AM Session

Plaintiff Witness(es)

6 Chapters

	Description	Attorney	Witness	Presence
00:00:11	General Case Activities
00:01:22	Witness Direct Examination	Lobel, Douglas	O'Mara, Mr. Mark	In Person
00:58:23	Witness Cross Examination	O'Hare, Robert	O'Mara, Mr. Mark	In Person
01:25:59	Break
01:35:44	Witness Cross Examination	O'Hare, Robert	O'Mara, Mr. Mark	In Person
02:08:51	General Case Activities

PM Session

Not in Session

0 Chapters

OCT

AM Session

Defense Witness(es)

4 Chapters

	Description	Attorney	Witness	Presence
00:00:11	General Case Activities
00:02:09	Witness Direct Examination	Lobel, Douglas	Ferino, Mr. Anthony	In Person
00:10:20	Witness Direct Examination	Lobel, Douglas	Ferino, Mr. Anthony	In Person
01:23:01	Witness Direct Examination	Lobel, Douglas	Ferino, Mr. Anthony	In Person

PM Session

Defense Witness(es)

7 Chapters

	Description	Attorney	Witness	Presence
00:00:10	Witness Cross Examination	Berman, Jeremy	Ferino, Mr. Anthony	In Person
00:33:13	Witness Cross Examination	Berman, Jeremy	Ferino, Mr. Anthony	In Person
01:15:09	Witness Re-Direct Examination	Lobel, Douglas	Ferino, Mr. Anthony	In Person
01:38:49	Witness Re-Cross Examination	Berman, Jeremy	Ferino, Mr. Anthony	In Person
01:40:49	Break
01:51:19	Witness Direct Examination	Musoff, Scott	Rooney , Mr. Peter	In Person
02:24:40	Witness Cross Examination	Cahill, Bob	Rooney , Mr. Peter	In Person

OCT

AM Session

Defense Witness(es)

5 Chapters

	Description	Attorney	Witness	Presence
00:00:09	General Case Activities
00:09:40	Witness Cross Examination	Cahill, Bob	Rooney , Mr. Peter	In Person
01:12:54	Witness Direct Examination	Musoff, Scott	Rooney , Mr. Peter	In Person
01:36:04	General Case Activities
01:38:04	Witness Direct Examination	Musoff, Scott	Mangieri, Mr. Gerard	In Person

PM Session

Not in Session

0 Chapters

OCT

PM Session

Not in Session

0 Chapters

AM Session

Not in Session

0 Chapters

OCT

AM Session

Defense Witness(es)

4 Chapters

	Description	Attorney	Witness	Presence
00:00:15	General Case Activities
00:00:49	Witness Direct Examination	Musoff, Scott	Mangieri, Mr. Gerard	In Person
00:58:25	Break
01:34:30	Witness Direct Examination	Musoff, Scott	Mangieri, Mr. Gerard	In Person

PM Session

Defense Witness(es)

2 Chapters

			Description	Attorney	Witness	Presence
		00:00:10	Witness Direct Examination	Musoff, Scott	Mangieri, Mr. Gerard	In Person
		00:45:52	Witness Cross Examination	Lobel, Douglas	Mangieri, Mr. Gerard	In Person

OCT

AM Session

Defense Witness(es)

2 Chapters

			Description	Attorney	Witness	Presence
		00:00:10	Witness Cross Examination	Lobel, Douglas	Mangieri, Mr. Gerard	In Person
		00:29:10	Witness Re-Direct Examination	Musoff, Scott	Mangieri, Mr. Gerard	In Person

PM Session

Not in Session

0 Chapters

OCT

AM Session

Defense Witness(es)

7 Chapters

	Description	Attorney	Witness	Presence
00:00:11	Witness Direct Examination	Berman, Jeremy	Montgomery, Mr. Harry	In Person
00:50:06	Break
00:57:46	Witness Cross Examination	Cahill, Bob	Montgomery, Mr. Harry	In Person
02:16:32	Break
02:21:12	Witness Re-Direct Examination	Berman, Jeremy	Montgomery, Mr. Harry	In Person
02:23:55	Witness Re-Cross Examination	Cahill, Bob	Montgomery, Mr. Harry	In Person
02:26:02	General Case Activities

PM Session

Not in Session

0 Chapters

NOV

E*Trade v. Deutsche Bank

Summary

Outcome

Sessions

AudioCaseFiles

Essentials

Training Libraries

	Description	Attorney	Witness	Presence
00:00:16	General Case Activities
00:02:42	Witness Cross Examination	Berman, Jeremy	Montgomery, Belinda	In Person
01:53:40	End of Session

	Description	Attorney	Witness	Presence
00:00:05	General Case Activities
00:02:10	Witness Direct Examination	Lobel, Douglas	Audette, Mr. Matt	In Person
01:26:35	Break
01:40:24	General Case Activities
01:42:55	Witness Direct Examination	Lobel, Douglas	Audette, Mr. Matt	In Person
02:17:15	Witness Cross Examination	Musoff, Scott	Audette, Mr. Matt	In Person