Even more disturbing, Stanford's attorney Essmyer alleges in his motion towithdraw that co-counsel, Bob Bennett, is "often times" acting against Stanford's bestinterests. Notwithstanding these allegations, Stanford asks this Court to orderUnderwriters to consent to his representation by Bob Bennett and the latest team ofcriminal attorneys in the Criminal Action, and to pay their fees.' Underwriters, however,have no obligation and in fact cannot in good faith approve counsel that has been fired byan insured, or counsel that is alleged to have acted against an insured's best interest.Stanford also asks this Court to order Underwriters to pay for "coverage counselof his choosing." However, as this Court has correctly recognized, the
Policy doesnot afford Stanford any such right to "coverage counsel." Stanford's co-defendants in theCriminal Action (and co-plaintiffs here) recognized as much and made separatearrangements with their defense counsel to engage coverage counsel, Lee Shidlofsky.Stanford, for whatever reason, has chosen to terminate Mr. Shidlofsky, who subsequentlywithdrew from representing him.The chaos surrounding Stanford's representation in the Criminal Action (and to alesser extent the SEC Action) highlights the urgent need, recognized by the Fifth Circuit,for this Court to expeditiously resolve this coverage dispute. Until the Court makes thedetermination mandated by the Fifth Circuit, the turmoil surrounding Stanford's counselis likely to continue, threatening serious harm to Underwriters' rights (as well as those of
Stanford's latest criminal defense attorneys, the Bennett Nguyen Joint Venture and the Essmyer, Tritico
Rainey firm have requested Underwriters pay nearly
in defense costs.
App. A, Declaration of MaryMcLean Pena
(hereinafter "Pena Decl.").
Case 4:09-cv-03712 Document 113 Filed in TXSD on 05/24/10 Page 3 of 14