Following a four-day trial, a jury returned a defense verdict in favor of Mandell Menkes client Federal Signal Corporation and against Plaintiff Kim Wehrenberg. Plaintiff alleged that, after his termination as the company’s general counsel, Federal Signal breached an agreement to provide him unimpeded access to funds it held in a trust reserved for top company executives.
The controversy began in February of 2004 when Federal Signal terminated the Plaintiff and the parties entered into a separation agreement. As part of the agreement, Federal Signal agreed to provide Plaintiff “full access” to deferred compensation, which had largely been awarded in the form of Federal Signal stock. Plaintiff claimed he did not have full access because Federal Signal refused to pay him the cash value of the stock. Plaintiff also claimed that Federal Signal prevented him from selling the stock by giving him material, non-public information, thereby making him a “tippee” who had to hold his stock for a period of time. He alleged that, by the time he could liquidate his stock, he had lost several hundred thousand dollars.
After the Court dismissed numerous other claims, the “tipping” claim became the centerpiece of Plaintiff’s lawsuit. Following testimony and closing arguments, the Court gave the jury a special interrogatory: “Do you find that [Plaintiff] was given material, non-public information regarding Federal Signal on October 8, 2004?” The jury unanimously answered “No” and therefore found Federal Signal did not breach its agreement with Plaintiff. Plaintiff sought approximately $1 million (including attorneys’ fees).
Mandell Menkes LLC represented Federal Signal. Stephen Rosenfeld was the primary trial lawyer with Steven Mandell and John Fitzpatrick assisting with the defense. Please contact Mr. Rosenfeld at (312) 251-1000 with any additional inquiries.