With Friends Like These...

CompUSA and Latin America's richest man get a $450 million lesson from a Dallas jury: Friendship and business don't mix.

He sent Halpin a fax that warned his friend and tried to reopen the communications. "Since we terminated our discussions with Slim, Beneke would like some comfort from you on this matter."

Halpin testified that he took that fax as a threat. By November 15, 1999, he responded accordingly. For the first time, the Dallas partners claimed in court, Halpin started insisting that they meet a December 31 deadline to present a proposal with an investor behind it, and in doing so made it clear that he thought they weren't going to make it.

The trick was cruel, Werbner told the jury. With his "Prom Letter" advice, Halpin had been the one to suggest they terminate with Slim. And now he was insisting on a deadline they obviously wouldn't make without Slim as an investor. They did manage to serve up another potential investor, Carlos Gonzales-Nova, chairman of Commercial Mexicana, a retail company, but the CompUSA executives rejected him.

Mark Werbner led the team that sued Slim, Halpin and CompUSA. He so impressed the jury that its forewoman, a teacher, invited him to speak to her class.
Mark Graham
Mark Werbner led the team that sued Slim, Halpin and CompUSA. He so impressed the jury that its forewoman, a teacher, invited him to speak to her class.
Mark Werbner led the team that sued Slim, Halpin and CompUSA. He so impressed the jury that its forewoman, a teacher, invited him to speak to her class.
Mark Graham
Mark Werbner led the team that sued Slim, Halpin and CompUSA. He so impressed the jury that its forewoman, a teacher, invited him to speak to her class.

On January 25, 2000, CompUSA announced that the board had accepted the offer to sell Grupo Carso. At trial, Halpin insisted the negotiations to sell the company had started only after the Dallas partners terminated their relationship with Slim.

Two weeks later, the Dallas partners filed suit.

Shortly afterward, the moderator of the YPO forum to which Halpin and McBride belonged called a meeting to discuss what to do in the instance of one member suing another.

McBride was under siege from other YPO forum members for initiating a lawsuit against a comrade. At the meeting, his YPO friends gave McBride two and half minutes to explain his side of the story. Dallas Stars President Lites recounted at trial what McBride told the group members. "He was sorry that he felt he had to do it, and he felt he was being pressured by his investor here locally," Lites said.

McBride was kicked out of the YPO, Lites testified.


In the end, the jury had no sympathy for Halpin. "I'm sure he is a smart man or he wouldn't be where he was, but he was wanting to answer questions that weren't asked," says juror McGhee.

"I thought he seemed to be just a little bit arrogant, the way he carried himself on the stand," said one of the three male jurors.

During deliberations, both sides wondered nervously when they heard peals of laughter come from the jury's quarters. Several of the jurors say they spent a good deal of time laughing about the trial events. "It was like a Grisham novel, with all the emotions," says one juror, who asked not to be named.

Halpin, Slim and the Mexican investor's companies shared the same defense team at trial--an expensive combination that included New York-based attorneys from Cleary, Gottleib, Steen & Hamilton, the Dallas white shoe firms of Jackson & Walker and Jenkens & Gilchrist, as well as the jury expert psychologist Phil McGraw, a regular guest on the television show Oprah.

Despite its pedigrees, the defense team seemed strangely ineffective before the jury. "They were always diving down to the floor to get papers," recalls one member of the panel. One lawyer representing Slim's companies, who did not want to be identified, says that lawyers from the New York firm dictated the trial strategy and hamstrung the other attorneys.

The defense team made few objections while witnesses who were supposed to help its case were left helpless on the stand in the face of Werbner's aggressive questioning. "There is always a fine line between objecting too much and too little. In any event, most of what Werbner was doing was incurable," says Ted Daniel, a Jenkens partner representing CompUSA.

Halpin, who had been sharing representation with CompUSA, has hired his own lawyer, Gardere & Wynne partner Joe Harrison, who says he believes his client might have wanted someone fresh to look at the case after the verdict. But another lawyer from the defense side says Halpin reluctantly retained separate counsel after Slim determined that given how the jury put much of the blame on Halpin, Slim or his companies might have a conflict with the former CEO.

Before the trial, McGraw's consulting firm tried the case before a mock jury--a service for which his outfit charges $29,500 a day. (The plaintiff side had its own mock trial.) Nevertheless, at the real thing, the defense team seemed surprisingly unfocused about what it wanted in a prospective juror.

"We had a lot of considerations," says defense counsel Mark Josephs.

In a questionnaire passed out to prospective jurors to help the lawyers select who to seat on the jury, the defense team introduced queries to weed out CompUSA customers (it apparently didn't want to take a chance with dissatisfied buyers) and those with biases against Mexicans.

The jury was a racially and otherwise demographically varied group. Ages ranged from 20 to 70. Three blacks and three Hispanics were on the panel. A North Dallas homemaker and member of the Junior League was seated along with a Raytheon assembler.

The group picked as their forewoman Ann Benningfield, a 56-year-old French teacher at Skyline High School, who drives the bus to supplement her income.

Benningfield did not return phone calls for this story, but her fellow panel members say she handled deliberations generally with authority and decorum.

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