The Tangled Web of Southern Holdings – Update

By Paul Gable

Any time you get close to an issue that stems from the original Southern Holdings lawsuit, the tangled web of deception grows.

The latest involves a hearing before S.C. District Court Judge Doyet A. Early, scheduled for Wednesday August 20, 2014, to hear Emergency Omnibus Motions to Compel the production of a settlement agreement for the Southern Holdings case that includes demonstration of “informed consent” by each of the original Southern Holdings plaintiffs.

The existence of an “informed consent” settlement agreement is required by state and federal law to demonstrate that attorney John Rakowsky, who represented the original seven Southern Holdings plaintiffs, had the “informed consent” of his clients to settle the Southern Holdings case.

The pertinent section of the law reads: (g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer’s disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.

The hearing before Judge Early involves a state court interpleader action that has Rakowsky as the plaintiff and the original Southern Holdings plaintiffs he represented in federal court as well as his former co-counsel in the case among the defendants.

The interpleader action was filed by Rakowsky approximately six months after the “alleged settlement” of the Southern Holdings case. Its purpose is to have the court determine disbursement of remaining litigation funds held by Rakowsky.

A letter dated February 27, 2014 (link below) from the law firm of Ballard, Watson, Weissenstein to federal judge Bryan Harwell, regarding the “alleged” settlement of the Southern Holdings case, demonstrates the tangled web of deception associated with Southern Holdings and the interpleader action. Harwell was the presiding judge in Southern Holdings.

The letter is dated two days after a motions hearing in state court before Judge Early on the interpleader case in which Ballard and Weissenstein represented Rakowsky at the time. Weissenstein has since resigned from the interpleader case and has left the law firm.

Ballard and Weissenstein are not and never were attorneys of record for any party in the Southern Holdings case. Yet, they found a need to offer their “assistance” to Judge Harwell in bringing the Southern Holdings case to a “definitive conclusion” so Rakowsky’s state court action could proceed.

It is interesting to note that Judge Early, a judge who is presiding over a case in which Ballard and Weissenstein were attorneys of record, is not included among those receiving copies of the letter. He is not included even though the interpleader case, over which he presides, is directly affected by whether there is a “definitive conclusion” to the Southern Holdings case.

As for that “definitive conclusion” – the letter refers to various documents from the Southern Holdings case, by docket number, that purportedly demonstrate the Southern Holdings case is closed.

Missing from any reference is the one document that would definitively show the case was settled – a settlement agreement signed by all the plaintiffs as definitively required by law. There is a good reason this “informed consent” document is not referred to – IT DOESN’T EXIST.

The plaintiffs never agreed to a settlement, never put their signatures, demonstrating informed consent, on a document agreeing to a settlement, were never even polled in open court as to whether they agreed to a settlement.

Judge Harwell announced a settlement in open court in May 9, 2007. That announcement apparently came as a result of a closed door meeting in judge’s chambers on the evening of May 8, 2007.

Rakowsky has since stated an agreement was reached in the May 8th secret meeting in a sworn affidavit.

Rakowsky provided details of the secret meeting in a letter to the plaintiffs several weeks after the event. Judge Harwell referred to the meeting, in the August 13, 2008 order referred to in the Ballard Weissenstein letter, stating he disagreed with many of the statements in the Rakowsky letter.

But, the meeting itself was secret, no court records were kept, and Harwell’s disagreement was never specifically put on record by the judge. Harwell has stated on the record, however, that no settlement talks went on during the secret meeting.

The Weissenstein letter does not address the many documents filed in the Southern Holdings case alleging fraud on the court. Those documents are lumped together as “numerous filings since that time which appear to indicate some matter remains open…”

The issue on Wednesday, however, appears very black and white. Produce an informed consent settlement agreement signed by all the Southern Holdings plaintiffs as required by law, at Wednesday’s hearing, and the interpleader case can go forward.

Lacking that signed agreement, the Southern Holdings case is not legally settled.

There have been many refusals to produce the informed consent settlement agreement since the interpleader was first filed in 2008. One, crafted by Rakowsky’s attorneys, claimed that the document was covered by attorney-client privilege, forgetting that it was Rakowsky’s former clients who were requesting it be produced.

The rub, of course, is no signed settlement agreement exists! But, the machinations by the attorneys continue to attempt to get around that legal requirement.

“Oh what a tangled web we weave when first we practice to deceive.” – Sir Walter Scot

Link to the Ballard Letter: Ballard-2-Harwell-022714

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