At a status hearing held in October, the main topic once again was the problem of discovery, the concern arising out of the need to review something like 15 million documents.  In addition, the trial judge (Barbara S. Jones) took care of a number of housekeeping measures.

Most of the parties (Paul Barnaba excepted) agreed to a briefing schedule with the parties due to file on January 15, the government having until Feb. 12, and the replies due Feb. 27th.   Oral argument will follow, presumably sometime in March.  (A subsequent letter from counsel at Morvillo, Abramowitz sought a two week extension, altering the dates to January 30, Feb. 26 and March 13).

Similarly, deadlines were worked out for expert discovery were resolved.  With Karen Seymour, counsel for defendant J. Michael Stepp taking the lead, she got the government's agreement to complete expert discovery by Feb. 27.  Defense would do the same by March 20.  What would this entail?

• THE COURT: Now, by discovery, you mean they're going to declare they have one and give you a report, is that what we're talking about?
• MS. SEYMOUR: That's what we're anticipating.
• MR. BERGER: Yes, an expert notification letter.

The issue of appointed counsel was more or less resolved.  Once the D&O insurance proceeds evaporated, the issue of counsel and the payment of fees came to the fore.  Solomon Wisenberg, counsel for Paul Barnaba, moved to be appointed counsel under the Criminal Justice Act.  At the October hearing, the trial judge approved the appointment.  She also noted that, "[w]ith respect to Mr. Cosgrove, . . .approval should be coming through in another day or two."

Much of the hearing was devoted to the time needed to prepare for trial, a matter complicated by the number of documents involved.  That number had increased from the already impressive 11 million to 15 million.  Counsel for Dave Stockman (Elkan Abramowitz) indicated a need for 70 to 80 weeks.  With both counsel and the trial judge overwhelmed by the number of documents, the court had this to say about the length of time needed for preparation:

• THE COURT: Well, I can only -- I see we have a new assistant here today, Mr. Sahni? (Indicating) I can only ask the government to go back and talk to people who may have had cases like this, reach out for lawyers who may have left the office and see if there are some solutions out there or some comparisons that can be made because: One, I don't know what it takes to search 15 million documents. Two, I don't know how search terms work, especially when I'm told there's a first level of review and then another level of review. I can't say to the defendants at this moment that it won't take them 70 to 80 weeks; and under that circumstance, then I have to look at the government and say do you want to wait that long?  The ball is in your court, gentlemen. Unless I'm convinced that 70 to 80 weeks is unreasonable, and no one is telling me that, I think we would be in the situation of waiting a very long time as Mr. Abramowitz is getting us off the dime. The flip side is, of course, Mr. Abramowitz can't guarantee that even if he's given these materials, he can do it any faster. So you're not getting any deal here -- you're not getting an agreement from Mr. Abramowitz that "I can do it six months faster if you give me this." He's hopeful. I think a little more thought has to go into this back at the U.S. Attorney's office just because I'm unaware of there being this length of time between indictment and the ability to get through discovery and set a reasonable trial date. I mean, at the moment I don't think it's overly long, but I haven't gone back and compared it with other cases, and it might be helpful to do that.

In short, unless Paul Barnaba gets his severence and an earlier trial, this matter is not likely to be before a jury for somewhere around 18 months (from October) with even that prediction uncertain.

Primary materials on this case can be found at the DU Corporate Governance web site.