Updated from 12:14 p.m. EST
has been denied a motion to disqualify
Rohm & Haas'
counsel in the companies' merger dispute.
Judge William Chandler of Chancery Court in Delaware on Thursday denied the motion by Dow for the removal of the law firm Wachtell, Lipton, Rosen & Katz because the firm had previously served as Dow's counsel in 2007.
In his ruling, Chandler wrote:
"Dow argues that it is a current client of Wachtell because the firm never tooksteps to inform Dow that it was no longer a client following Wachtell'srepresentation of Dow in 2007 and 2008 in connection with the termination of twoDow executives and potential defensive measures in response to rumors of atakeover bid.
"Dow further argues that Wachtell represented Dow in matterssubstantially related to this proceeding and in the course of that representationobtained confidential information that will materially advance Rohm and Haas'sposition in the instant litigation.
"Plaintiff Rohm and Haas counters that there is not a concurrent conflict ofinterest because Dow is no longer a Wachtell client. According to Rohm andHaas, it should have been clear to Dow that Dow was no longer a Wachtell clientwhen the firm appeared opposite Dow in its representation of Rohm and Haas inthe negotiations of the initial confidentiality agreement and the merger agreementin mid-2008.
"Rohm and Haas further argues that the nature and scope of the priorrepresentation and the current litigation are distinct and that Wachtell received noconfidences from Dow that could be used to advantage Rohm and Haas in thisproceeding."
In rejecting the motion, Chandler also wrote: "After careful consideration of the parties' arguments, I am not convincedthat allowing Wachtell to continue representing Rohm and Haas in this matter willprejudice the fairness of the proceedings or affect the fair and efficientadministration of justice. First, I am not convinced by the argument that Dowreasonably believes it is a current client of Wachtell or that Dow relied on such abelief. Dow knew that Wachtell was representing Rohm and Hass during thenegotiations of the merger agreement and did not object."
The same judge had earlier
by Dow to delay the trial of a lawsuit filed by Rohm & Haas alleging that Dow had violated the companies' $15.3 billion merger agreement by not closing the deal on time.
because of a decline in economic conditions and after a state-owned Kuwaiti petrochemical company backed out of a joint venture that was to provide Dow with billions of dollars for the Rohm acquisition.
Shares of Dow were recently trading at $10.13, up 9 cents, or 0.90%. Rohm & Haas shares. Rohm & Haas shares were up $1, or 1.7%, to $58.78.