JPMorgan disputes involvement in Dow suit

17 October 2007 23:30  [Source: ICIS news]

HOUSTON (ICIS news)--US investment bank JPMorgan said that an attempt to drag it into a lawsuit involving former Dow Chemical vice president Romeo Kreinberg is legally and factually unfounded, according to media reports published on Wednesday.

JPMorgan did not return phone calls on Wednesday seeking comment. Kreinberg's lawyer was not immediately available for comment.

Kreinberg filed a complaint in federal last week, which attempted to make JPMorgan a co-defendant in a lawsuit filed by Dow.

JPMorgan's potential involvement in the suit is the latest development in Kreinberg's firing from Dow.

Dow accused Kreinberg and a senior company advisor, J. Pedro Reinhard, of holding unauthorised talks to sell the company.

Dow said the buyout talks were leaked to the media, causing harm to the company by roiling employees and instigating a company investigation, according to court documents.

Dow fired the executives and sued them, alleging breach of fiduciary duty, according to court documents. Kreinberg and Reinhard responded with their own suits against Dow.

In last week's complaint, Kreinberg said JPMorgan, a long-time financial advisor to Dow, was acting as an investment advisor for a buyout team at the time of the leaks, but did not disclose its role in the buyout talks. The buyout team included the government of Oman, private equity groups and other potential investors, Kreinberg alleged.

Eventually, Dow became aware that JPMorgan was acting as an investment advisor for the rumoured buyout, Kreinberg alleged.

Dow confronted the bank about its role, Kreinberg said in his complaint. JPMorgan implicated Kreinberg and others as participating in the bid offers.

Kreinberg denied that he was involved in any buyout of Dow. If anything, Kreinberg indicated that he fended off such a buyout effort, according to his complaint last week.

JPMorgan representatives had asked Kreinberg how Dow would react to the offer, the suit said. Kreinberg responded that Dow "would circle the wagons".

Thereafter, the bank abandoned the project, Kreinberg alleged.

As such, Kreinberg denies that he breached his fiduciary duty to Dow, according to court documents. However, if Dow prevails on its claims, JPMorgan should be held accountable for its share of any damages.

Dow spokesman Chris Huntley said the company would not comment about the specific accusations made by Kreinberg, since they concern alleged actions taken by JPMorgan.

However, Huntley described Kreinberg's accusations - as a whole - as being "absurd".

Huntley added, "I think it's a bit unfortunate for him to publicly attack his former employer and, now, others for a decision that was brought about by his own action."

By: Al Greenwood
+1 713 525 2653

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