Billionaire Guo Wengui wants Cahill disqualified in investor fight

Guo Wengui (also known as Miles Kwok) holds a news conference with Steve Bannon in New York, New York, U.S., November 20, 2018. REUTERS/Carlo Allegri
  • Guo was sued in 2017 over $88 million in loans
  • He says he "confided" in firm over SEC probe

(Reuters) - Attorneys for Chinese billionaire businessman Guo Wengui, also known as Miles Kwok, have asked a judge to keep Cahill Gordon & Reindel on the sidelines of litigation between the billionaire and an Asia-centered investment fund.

The Pacific Alliance Asia Opportunity Fund and Guo have been fighting in New York state court for four years over $88 million Guo allegedly borrowed between 2008 and 2011 and never paid back.

Prominent New York litigator Edward Moss, then a partner at O'Melveny & Myers, was part of the team that filed the case for Pacific Alliance in 2017. But now that Moss has taken his practice to Cahill in a move announced last week, he can no longer represent the fund, Guo's attorney wrote in a Wednesday letter to Justice Barry Ostrager.

Cahill has access to confidential information about Guo that disqualifies the firm from representing an opposing party, the billionaire argues.

The law firm was or is representing clients who are being investigated by the U.S. Securities and Exchange Commission along with Guo, the letter said. The SEC probe is looking at "matters at issue in this case," it said.

"Having confided in confidence with Cahill in the course of seeking and receiving legal advice subject to a joint defense agreement, Mr. Kwok and his confidential information would be irreparably prejudiced by that firm now appearing on behalf of the adverse party in this action," BakerHostetler partner John Siegal wrote.

Siegal declined to comment further. Moss did not respond to a request for comment, but Siegal's letter said Cahill has "indicated that they have a different position with regard to the conflict issue."

Pacific Alliance is also represented by attorneys from O'Melveny & Myers, Foley & Lardner and Mayer Brown.

Ostrager on Thursday set a hearing on the issue for Dec. 7.

The SEC last month settled charges against three media complaints affiliated with Guo for more than $359 million. New York-based GTV Media Group Inc and Saraca Media Group Inc, and Phoenix-based Voice of Guo Media Inc, were accused of illegally selling stock and digital assets to thousands of investors.

It was on Guo's yacht, the Lady May, that Steve Bannon, a former adviser to then-president Donald Trump, was arrested for allegedly defrauding donors in a scheme to help build the president’s signature wall along the U.S.-Mexico border. Trump later pardoned Bannon.

The case is Pacific Alliance Asia Opportunity Fund L.P. v. Kwok Ho Wan, et al., New York County Supreme Court, Index No. 652077/2017.

For Pacific Alliance: Stuart Sarnoff and Daniel Shamah of O'Melveny & Myers; Edward Moss and Lauren Riddell of Cahill Gordon & Reindel; Douglas Spelfogel of Mayer Brown; and Alissa Nann of Foley & Lardner

For Guo Wengui: Jillian Searles and Mark Harmon of Hodgson Russ; and Melissa Carvalho, Erica Barrow and John Siegal of BakerHostetler

Read More:

U.S. SEC fines Guo Wengui-linked media firms for illegal securities offerings

Trump pardons ex-aide Bannon but not himself or family

Steve Bannon, key to Trump's rise, charged with defrauding border-wall supporters

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.