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The first "E-mail of the Month" award goes to Jerrold J. Ganzfried, a senior litigation partner at a leading Washington D.C. law firm, Howrey Simon Arnold & White, LLP. Gerry is shown in the accompanying photograph (at right) receiving his award, a LitigationProofing drum, from Eric Rosenberg in the Howrey offices.

Gerry submitted the winning selection from the public record in the United States District Court decision on August 27, 2004 in the civil tax case of Long Term Capital Holdings et. al. v. United States, Civ No 3:01cv1290. (Gerry hastens to add that his firm had no role in the case and that he noticed the e-mail in the advance sheets containing the reported decision.)

In this decision, Long Term Capital and related entities were unsuccessful in their petition seeking to readjust the IRS's denial of over $100 million in claimed capital losses and to reverse the imposition of penalties for a gross valuation misstatement. In essence, in disallowing losses, the government argued that Long Term Capital had entered into a transaction that lacked economic substance.

Part of the court's decision accused Long Term Capital of an effort to keep claimed losses from raising audit flags. In the factual introduction to its opinion, the Court took particular note of the following e-mail between two attorneys at the investment banking firm that had devised the transaction: "For our CHIPS III entity let's use a name unrelated to CBB. It makes it just a bit harder for the IRS to link all the deals together." Id at p. 14, fn. 15. The suggestion in this e-mail that entities involved in parts of the transaction should be named in a way to make the overall transaction more obscure to the IRS certainly could not have helped petitioners' case. Perhaps the attorney author of the e-mail never imagined that it could end up disclosed in a tax litigation. However, it would have been preferable for the email to have been limited to the first sentence, or for the entire communication to have been made verbally or by our favorite method, a LitigationProofing drum, leaving no record to be debated or misunderstood at trial.

» Current Award

To highlight the importance of smart, well-trained e-mail skills, LitigationProofing will award an appropriate prize of nominal value at the end of each month for the best submission of a problematic, but previously publicly disclosed and available e-mail. Contestants may submit entries by sending them to DO NOT SUBMIT any e-mail that is not from publicly available sources. Just as is true in much of what happens in litigation generally, the decision of "Judge" Rosenberg awarding the prize will be subjective and final. Here's an example from the recent securities analyst cases: