Proskauer Rose v. Superior Court CA2/1

BACKGROUND

Michelson’s Action Against Proskauer Petitioner Proskauer is the defendant, and Real Party In Interest Michelson is the plaintiff, in an action pending in respondent court entitled Michelson, et al. v. Proskauer Rose LLP, et al., Los Angeles Superior Court case No. BC384760. The operative pleading in that action, the second amended complaint, alleges that in December 2001, Michelson invested in two investment vehicles, known as Strategically Diversified Investment (SDI) and Odora Limited Investment (Odora). Michelson‟s pleading alleges that he made the investments and claimed losses with respect to them based on formal opinion letters issued to him by Proskauer—purportedly independent attorneys acting on

2 his behalf—attesting to the validity of these investments and their likelihood of withstanding IRS scrutiny. Michelson‟s action alleges, however, that Proskauer knew but did not disclose to him that Proskauer was not independent, but had been involved in structuring the SDI and Odora investments; that Proskauer knew but did not disclose that these transactions (or transactions very similar to them) had been identified by the IRS as abusive and illegal tax shelters;…