Thursday, November 1, 2007

Sherwin Williams Attacks: Finally!

I have been begging for this since March when I first wrote about Rhode Island AG Patrick Lynch's "settlement" with DuPont (DD) and his diversion of those funds to entities having nothing to do with the case or its remedy. In a recent filing, Sherwin Williams (SHW) has finally called the AG to the mat. Let's see him squirm out of this one. is reporting:

Sherwin-Williams filed two motions Wednesday -- one to value the DuPont settlement and another to stay the lead paint abatement process ordered by Superior Court Judge Michael Silverstein.

"In addition to valuing the overall DuPont settlement, Sherwin-Williams also moves to disgorge two monetary amounts from the settlement that were improperly diverted to two purely private purposes, to satisfy either the Attorney General's or the State's counsel's private interest," attorneys for Sherwin-Williams wrote.

First is $2.5 million earmarked to pay Brigham and Women's Hospital in Boston. Sherwin-Williams says the money is used to satisfy a pledge made previously by Motley Rice, the plaintiffs firm hired by the State to pursue the case on a contingency fee basis.

Motley Rice counsel John McConnell is a campaign contributor to Lynch.

"This contribution has no connection whatsoever to Rhode Island lead paint issues, and the Attorney General had admitted that he knew of no benefit that Rhode Island citizens will receive from this out-of-state contribution," the motion says.

The second is an allotment of $1 million to Brown University, Lynch's alma mater.

"There is absolutely no basis in the law for an Attorney General to sue in the name of the State and then cut a deal whereby settlement money from the case is diverted to third parties, particularly an out-of-state third party," the motion says. "The Attorney General is required to deliver monetary recoveries to the State's General Fund.

"The Attorney General and his contingent fee counsel cannot bypass the General Assembly and the State's budget process and wheel and deal with State monetary recoveries."

I concluded my post that day in March by saying "Recently shareholders of corporation have become very aggressive legally with those inside the company who, through questionable or dubious actions, destroy shareholder value. It is time that we at Sherwin-Williams (SHW) get as equally aggressive with those outside the company. Let's take the bull by the horns here. If not the state of RI, then the AG or theirlaw-firm, Motley Rice. Time to go on offense. I for one am getting sick of being on defense all day."

It is not clear if NL Industries (NL), a party in the RI case in involved with the filing.

This action is long overdue and needs to be the new way these suits are handled by companies. Stop being punching bags..

It is a good day for Sherwin Williams shareholders.

See Jane Genova's blog on the motions here:

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