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Fish Cases

Highland Environmental Management

Litigation, Commercial Litigation

Fish Cases

Highland Environmental Management

Litigation, Commercial Litigation

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When NL Industries set up a subsidiary to deal with the financial aspects of its massive environmental liabilities, three companies bought minority shares in the new company, NL Environmental Services. That deal gave the minority shareholders the right to sell back their stock to NL after seven years, for a price determined by a preset formula. But when it came time to exercise that right, the three minority companies found the subsidiary had been substantially stripped of its assets, with the contracted formula now calculating a total value of $3.9 million—roughly one-tenth of what they’d expected. The three minority shareholders decided to sue NL Industries, and one of them—Highland Environmental Management—engaged Fish & Richardson to press its claims and defend a claim brought against it.

"...The National Law Journal ranked this win one of the largest jury verdicts in the nation and the third largest in Texas."

In-Depth

When NL Industries set up a subsidiary to deal with the financial aspects of its massive environmental liabilities, three companies bought minority shares in the new company, NL Environmental Services. That deal gave the minority shareholders the right to sell back their stock to NL after seven years, for a price determined by a preset formula.

But when it came time to exercise that right, the three minority companies found the subsidiary had been substantially stripped of its assets, with the contracted formula now calculating a total value of $3.9 million—roughly one-tenth of what they’d expected. The three minority shareholders decided to sue NL Industries, and one of them—Highland Environmental Management—engaged Fish &
Richardson to press its claims and defend a claim brought against it.

We set out to prove that NL had conspired to remove cash and other assets from its subsidiary in order to lower the value of our client’s holdings. We helped convince the jury that NL’s efforts to “hide the ball” constituted both minority shareholder oppression and breach of fiduciary responsibility. The jury awarded the three plaintiffs $33.7 million in actual damages, plus $140 million in punitive damages against NL, and rejected the claim brought against our client. It also levied punitive damages of $5 million against NL’s General Counsel, sending a clear message that all of NL’s companies must play by the rules.

At the time, the National Law Journal ranked this win one of the largest jury verdicts in the nation and the third largest in Texas.