Trustee for Meridian scheme ordered to pay Moss Adams in lawsuit
Mark Calvert, the trustee overseeing liquidation of the Meridian Mortgage funds, has been ordered to pay $74,000 in legal costs to Moss Adams, the Seattle-based accounting firm that the trustee accused of negligence in a lawsuit seeking damages of up to $150 million.
Seattle Times deputy business editor
The trustee overseeing liquidation of the Meridian Mortgage funds has been ordered to pay $74,000 in legal costs to Moss Adams, the Seattle-based accounting firm that the trustee accused of negligence in a lawsuit seeking damages of up to $150 million.
Mark Calvert, the court-appointed trustee cleaning up after the collapse of Frederick Darren Berg's Ponzi scheme at Meridian, was ordered Thursday by King County Superior Court Judge Catherine Shaffer to pay the legal expenses incurred by Moss Adams over several months as it sought to enforce her earlier order requiring the trustee to itemize how Meridian investors allegedly relied on Moss Adams audits when they invested with Berg.
"We were definitely pleased with the order. We think it's fair and they should have produced this (evidence)," said Steve Fogg, an attorney for Moss Adams.
Michael Avenatti, an attorney for Calvert, said he respected the court's decision but didn't think it properly applied the law.
"More importantly, this decision has no bearing on the merits of the case or Moss Adams' gross negligence in allowing Mr. Berg to steal tens of millions of dollars while the firm sat idly by and did nothing," Avenatti said in an email.
A dozen Meridian funds collapsed in summer 2010, and last August Berg, Meridian's founder, pleaded guilty to fraud and admitted diverting "approximately $100 million" to personal uses and to perpetuate the Ponzi scheme. He is serving an 18-year sentence.
Calvert's lawsuit blamed the nation's 11th-largest CPA firm for issuing "clean" audit reports for six of the Meridian funds at various times between 2001 and 2007.
After Moss Adams sought sanctions over the trustee's delays in providing details about the 600 investors' alleged reliance on the audits, Calvert sought to withdraw the lawsuit with the option of refiling it later.
Moss Adams has asked the court to dismiss the suit and prevent it from being resubmitted. A ruling on that motion is expected July 30.
Earlier, the judge rejected a motion by Moss Adams to penalize the trustee's attorney for claiming publicly that Moss Adams had offered in settlement talks to pay $25 million, which the CPA firm denied.