FEN PHEN TRIAL CONTINUED UNTIL CONCLUSION OF FED. CRIMINAL TRIAL. JUDGE WEHR DOES NOT AWARD PRELIMINARY DAMAGES. MEDIATION TO CONTINUE AMONG PARTIES.

Special judge William Wehr yesterday ordered a stay in the civil trial of three attorneys who allegedly skimmed millions of dollars from the settlement of a diet-drug lawsuit.
Judge William Wehr sustained a motion for a stay by defendant attorneys William Gallion, Shirley Allen Cunningham and Melbourne Mills Jr. The three had sought a postponement to avoid having to defend themselves in the civil case while at the same time facing federal criminal charges growing out of the same diet-drug settlement.

The Plaintiff’s attorney Angela Ford argued that yesterday’s stay order gives Mills, Cunningham and Gallion more time to “dissipate” any assets that they might have to repay when the civil case is finally resolved.  Ford did not explain how efforts to dissipate the settlement funds would have been endangered by a delay of three months, after almost two years have expired since the settlement.  The court has already seized approximately $20 million dollars in the Charitable trust that was created with “left over? funds.

“There’s a very clear impact if they (the plaintiffs) have no ability to collect the settlement funds that have been misappropriated from them,” she said. Delaying the case also constitutes a hardship for plaintiffs who are in financial difficulties and need a settlement, Ford argued.  
Ford would have benefited from a ruling on damages prior to the criminal trial, in that she would have been able to claim that her efforts had achieved an award of damages in favor of her clients.  Judge Wehr, had previously indicated that he might consider issuing a preliminary ruling awarding at least partial damages in the civil action.  Yesterday’s ruling did not award any damages. 

Wehr’s decision to refrain from a preliminary award of damages could work to the benefit of the Plaintiff’s as a Federal restitution order in the criminal action could save the plaintiff’s the amount of the potential contingent fee of Attorney Angela Ford.   Ford has claimed that her clients were entitled to some $100 million dollars.  A standard contingent fee on such an amount could have been $33 million dollars.

The stay, however, allows efforts at a settlement in the civil case to continue. A settlement conference is set for Monday August 6th. in Newport. Wehr’s refusal to issue a preliminary award of damages, would appear to provide incentive for all parties to seriously consider a settlement, which could prevent years of additional litigation.

The Federal criminal case is scheduled for trial in October.

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