Earlier this month, the U.S. Court of Appeals for the Eighth Circuit refused to hear an interloculatory appeal regarding attorney-client privilege related to the lawsuit accusing Piper Jaffray & Co of giving faulty advice in two bond offerings. The lawsuit names Union County, Iowa as the petitioner.
The case involves a soybean crushing plant in Union County. CF Processing, owned by Crestland Cooperative, was supposed to construct the plant. Union County says that Piper Jaffray gave the county advice regarding the issuance of two general capital loan notes-bond offerings worth $5.865 million-related to the construction project.
The mill was going to be assessed for property tax purposes. CF Processing agreed to pay any shortfall so the county could make its necessary debt service payments if the tax revenue generated from the assessment did not cover them. Crestland also gave its guarantee regarding CF Processing’s performance. The two companies, however, defaulted on all their obligations when they filed for bankruptcy in 2001.
Union County is suing Piper Jaffray for breach of contract, breach of fiduciary duty, negligence, negligent misrepresentation, and fraud. The County says that Piper Jaffrey failed in its duty to correctly advise it about the risks involved in the bond offerings if CF and Crestland were to default. Union County says that Piper Jaffray should have also provided information on other financing options.
Piper Jaffray says that the county has refused to provide the documentation about the advice at issue and filed a motion to compel. Union County says attorney-client privilege and the work product doctrine makes the documents not discoverable.
The magistrate judge says that Union County waived its attorney-client privilege related to the documents because of its lawsuit. The county then filed its appeal.
Shepherd Smith Edwards & Kantas LTD LLP represents investors that have suffered financial losses because of broker-dealer fraud and other kinds of stockbroker fraud.
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