Under these circumstances, Mandel should be disqualified to eliminate any appearance of
THE ARBITRATIONSHOULDBE STAYED PENDING A RULING ON DISQUALIFICATION
To protect Petitioners from any prejudice and avoid any further taint to the
proceedings, the Arbitration should be immediately stayed pursuant to CPLR 2201
pending the Court's ruling on disqualification: Discovery is now beginning in the
Arbitration and it cannot proceed while Respondents continue to be represented by K&K
and Mandel. Given the amounf of damages Respondents seek in the Arbitration -- in
excess of $285 million -- the potential prejudiceto Petitioners is substantial.
Any possible prejudice to Respondents resulting from a stay would be dc
discovery IS lust beginning. The hearing i s scheduled to begin on February 72,
more than ten months from now.
Moreover, Respondents can hardly complain about any delay that might
be occasioned by a stay as it was Respondents themselves who stayed the proceedings for
a year while deciding whether to pursue the claims against Petitioners a f h Lehman's
filing in bankruptcy court.
Based on the foregoing, Petitioners have demonstrated why K&K's and
Mandel's disqualification is required. However, should the Court believe there are any
issues of fact that need to be further developed, Petitioners respectfully request leave to
conduct discovery pursuant to CPLR 408 as to those issues.
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