Judge Signals Likely Decision Against Fee Reduction in Morgan Stanley Settlement Dispute

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Morgan Stanley’s attorney, Andrew Livingston of Orrick Herrington & Sutcliffe LLP, argued that the walkaway provision was never part of the final agreement and therefore did not require disclosure. He described it as an early, non-binding deal that was quickly rescinded.

The objectors also pointed to a separate state court case where the walkaway provision was disclosed as part of a complaint against Morgan Stanley. Harvey argued that this disclosure violated the mediation privilege, as the memorandum of understanding (MOU) outlining the provision had been shared without his consent.

This dispute is part of a protracted legal battle that began in 2018, when Harvey sued Morgan Stanley over the company’s expense reimbursement system, which he claimed violated California labor laws. Following a settlement, objectors Lucadano and Chen sought to intervene, alleging that Morgan Stanley had structured the deal to avoid a potentially larger payout in their nearly identical state court case, which was nearing trial.