Paul A. Reynolds

Paul A. Reynolds

RECENT SPECIFIC EXPERIENCE AND ENGAGEMENTS

Matters Paul has handled as lead or co-lead counsel since leaving large law firm partnership include:

SECURITIES LITIGATION

• Represented appellee in the United States Court of Appeals for the Ninth Circuit, which affirmed a Securities Exchange Act of 1934 section 10(b) jury verdict in client’s favor.

• Represented a publicly traded company in two FINRA arbitration proceedings concerning nearly $100 million in frozen auction rate securities. Both proceedings settled favorably during their respective hearings.

• Represented individual client in securities fraud class action under the Securities Exchange Act of 1934 in federal court in New York City; client dismissed on motion to dismiss and plaintiff did not file amended compliant to try again to state a claim.

• Represented group of investors in JAMS arbitration against limited liability company and its founders under California securities fraud statutes, including claims for misleading statements made in the offering materials and LLC agreement, and related claims against co-members for acting as an undisclosed and unregistered brokers not subject to "finders' fee" exemption; included significant injunctive relief proceedings.

• Represented former defendant officers and directors in class action under Section 11 of the Securities Act of 1933; included advancement proceeding in Delaware Court of Chancery to require the defendant company to pay clients’ attorneys’ fees as incurred.

• Represented international investor in shareholder derivative action in the Delaware Court of Chancery against company, its board of directors, and its controlling shareholder arising out of the latter's obtaining a security interest in all of the company's property, foreclosing it, abandoning the company, and starting new company to continue the business, all without taking required steps to protect the interested of the minority shareholders.

• Represented investor in FINRA arbitration proceeding on claim that broker-dealer improperly sold off his margined options positions held in a Customer Portfolio Margin account.

• Represented a New York investment banker and broker-dealer in shareholder derivative action brought on behalf of then-publicly traded company which, following its bankruptcy, converted to a direct action by bankruptcy trustee. Client was dismissed with prejudice without providing any payment or other consideration.

• Represented several defendant clients in related matters, seeking well into eight figures, including (1) federal court class action, (2) state court shareholder derivative action; (3) state court direct aiding and abetting action, and (4) FINRA arbitration proceedings arising from the sale of Tenant in Common interests in class-a office buildings and multi-family housing complexes and/or shares in limited liability companies, both of which were syndicated as securities, by a company in which clients were executives.  All actions resolved with no payment by clients.

• Represented former COO of defunct registered investment advisor in adversary proceeding brought in bankruptcy court brought by the bankruptcy trustee of advisor, alleging that he breached his fiduciary duty (under Caremark) failed to properly monitor the owner and CEO of advisor to prevent him from embezzling client funds; also included complex insurance coverage issues.  Claim against client settled with no payment made by client.

• Represented group of investors in asserting shareholder derivative claims against estate of founder of company and his wife who allegedly embezzled company funds.

• Represented securities broker-dealer in FINRA arbitration proceeding arising out of its sale of securities in a private offering under SEC Regulation D.

• Represented ultra-high net-worth investors in multimillion-dollar FINRA arbitration arising out of flawed options trading strategy.

• Represented issuer of securities in state court action brought by investor alleging claims of fraud and failure to qualify under the California securities laws.

• Represented successor in interest to claims of bankrupt formerly publicly traded company in action alleging breach of fiduciary duty claims against former officers, directors, and lenders; included Anti-SLAPP proceedings at the trial court and court of appeal levels and four-week bench trial.

VENTURE CAPITAL AND FOUNDERS DISPUTES LITIGATION

• Represented majority shareholder venture capitalist in federal court action concerning minority venture capitalist shareholders’ claims of breach of fiduciary duty under Delaware law arising out of conversion of preferred shares to common shares and subsequent distribution of proceeds from $39M merger; case included three separate preliminary injunction hearings and two interlocutory appeals to the Ninth Circuit; one of the appeals was on an important issue of first impression under Delaware law, which was decided in favor of our client; achieved complete victory for client.
  
  
• Represented international venture capital investor in direct action in the Delaware Court of Chancery arising out of its investment in the company’s Preferred Stock in venture round, after which the company and its board failed to recognize the anti-dilution and liquidation preference rights provided to owners of that class of stock by the company’s certificate of incorporation. 
  
  
• Represented research doctor/founder of cancer research commercialization company in claims against the company and initial investor seeking to set aside a serious of complex corporate machinations improperly used to attempt to squeeze out client; included “advancement” proceeding in the Delaware Court of Chancery to require the company to pay his attorneys fees, as incurred, in defending counter-claim brought by investor.
  
  
• Represented inventors that provided foundational IP to company in dispute regarding exercisability of stock options granted them by company in exchange for those contributions. 

CORPORATE AND LLC GOVERNANCE ADVICE, INVESTIGATIONS, AND LITIGATION

• Represented Demand Review Committee of the Board of Directors of publicly traded company in investigating and responding to shareholder demand to bring litigation and take other actions.
  
  
• Represented numerous internal investigations for companies regarding a wide range of issues, including the preparation of reports regarding the outcome, conclusions, and recommendations arising from the investigations.
  
  
• Represented multiple former officers and directors of publicly traded and privately held Delaware corporations in expedited summary advancement proceedings in the Delaware Court of Chancery, seeking to have the companies reimburse them for their attorneys’ fees paid, as incurred, in defending claims brought by the company or its shareholders, as provided for in the companies’ certificates of incorporation and 8 Del. Code § 145(k).
  
  
• Represented group of LLC unit holders in dispute regarding the company’s manger’s, and/or a vote of the majority of unit holders, to approve settlement of litigation, which included injunctive relief proceedings and included issues relating to a Delaware LLC’s operating agreement to remove a manager’s default fiduciary duty and exempt it from liability for certain actions, as well as complex choice of law issues.

DEFENSE OF SEC AND FINRA INVESTIGATIONS, COMPLIANCE PROCEEDINGS, AND LITIGATION

• Represented Fortune 400 individual in SEC insider trading investigation. Investigation was dropped with no action taken by the SEC.
  
  
• Represented five related organizations in an SEC investigation concerning the offering of notes; no action taken by the SEC.
  
  
• Represented numerous registered representatives and broker-dealers in FINRA inquiries and investigations and related proceedings.

COMPLEX COMMERCIAL LITIGATION

• Represented medical technology company in lawsuit against its publicly traded predecessor’s founders and former executives involving their breach of non-disparagement and non- interference agreements that caused predecessor to lose access to capital and ultimately fail. Prevailed at trial.
  
  
• Represented a group of stockbrokers/investment advisors in connection with their departure from one broker-dealer to another in litigation with former Registered Investment Advisor they also departed; included injunctive relief proceedings and issues relating to the “Protocol on Broker Recruiting.”

• Represented plaintiff in action seeking to recover real estate loans that had been stripped out of the company by a faithless manager.

• Represented medical technology company in AAA arbitration regarding the breach by the counter-party to a distribution agreement for medical aesthetics product; obtained favorable settlement concerning the approximately $5 million in dispute.

• Represented partner of large Japanese conglomerate in lawsuit seeking sums owed client arising out of merger and acquisition activity between conglomerate and another company that was facilitated by client.

• Represented seller of 100% of shares of company in claim against legal advisors to transaction in legal malpractice case in federal court in New York City after purchasing company collapsed as a fraud, rendering the vast majority of the $8 million purchase price consideration worthless.

• Represented merchant funder in successful expedited proceedings to attach real property that had been sold via fraudulent transfers, thus ensuring obligations owed to client could be satisfied.

CONSUMER AND OTHER CLASS ACTIONS

• Represented defendant nationwide merchant funder in class action lawsuit claiming that its purchases of future credit card receivables were disguised loans subject to usury laws. Obtained favorable settlement, approved by the court, which allowed the company to continue as a going concern.

• Represented Nike, Inc., in connection with its rights as a class member in major antitrust litigation.

• Represented publicly traded company in consumer class action under California Business and Professions Code section 17200 arising out of allegedly misleading designation of origin of consumer product.

• Represented the national association of franchisees of major fast food franchise in two separate class action and representative lawsuits concerning franchisee rights under their franchise agreements. First case ever where Article III “associational standing” by a franchisee association was recognized.

INTELLECTUAL PROPERTY LITIGATION

• Represented Austrian manufacturer of lighting systems, one of the largest in the world, in trademark action in federal court in Atlanta, including injunctive relief proceedings, against former U.S. distributor; distributor capitulated in the eve of injunction hearing; issues included laches, acquiescence; naked license/abandonment, transfer of entire business, and licensee estoppel.

• Represented group of financial advisors accused by former employer of misappropriating trade secrets relating to client information and data in dueling state and federal court actions; included injunctive relief proceedings and extensive briefing and hearings regarding alleged destruction of electronic evidence.

OTHER NOTEWORTHY EXPERIENCE

Matters Paul handed earlier in his career include: 

SECURITIES AND RELATED LITIGATION

• Represented numerous defendant public companies and their officers and directors in federal securities fraud class actions under both the ’33 and ’34 Acts, in trial courts and courts of appeal; also represented several plaintiff public and private companies in ’34 Act securities fraud claims arising out of their acquisitions of other companies.

• Represented numerous public companies and their officers and directors in shareholder derivative actions, often arising out of allegations in parallel federal securities fraud actions, in trial courts and courts of appeal.

• Represented public companies and officers/directors in actions alleging breach of fiduciary duties in connection with approving mergers and in other merger-related contexts.

• Represented public companies and directors/officers in SEC regulatory investigations and related proceedings, including in civil litigation against the SEC.

• Represented numerous broker/dealers and their representatives, as well as investors, in FINRA arbitration proceedings.

UNFAIR BUSINESS PRACTICES LITIGATION AND OTHER CONSUMER CLASS ACTIONS

• Represented numerous public and private companies in defending class action, quasi-class action, and individual claims arising under California Business and Professions Code section 17200 and the California Consumer Legal Remedies Act and analogous laws of other states, including in coordinated statewide proceedings and federal Multi-District Litigation proceedings, as well as in multiple arbitral forums.

• Represented numerous public and private companies in consumer class action litigations concerning, among other various topics, franchise claims, claims of deception, claims involving allegedly excessive late fees, insurance-related claims, tobacco claims, and the like.

OTHER COMPLEX BUSINESS LITIGATION

• Represent public and private companies and individuals in a wide array of contract and business tort litigations, both as defendants and plaintiffs, including interference, royalty, finder’s fee, unfair competition, indemnity, partnership disputes and dissolutions, franchise disputes, etc.

• Represent public and private companies and individuals in litigation, including injunctive relief proceedings, concerning alleged misappropriation of trade secrets.

• Represent insurance companies and brokers in a variety of contract and tort litigations, including coverage matters and insurance broker malpractice claims.

• Represent large law firms and other clients in complex malpractice and malicious prosecution actions.