In Florida today, a state appeals court threw out the $521 million jury verdict against BDO Seidman LLP that had resulted from a dispute with Portuguese bank Banco Espirito Santo SA. The court has ordered a new trial in the case, Dow Jones Newswires reports. BDO Seidman has previously acknowledged that it does not have $521 million available as a US firm, and that paying such a judgment would break the US firm.


As previously discussed here, in August 2007, a jury determined that BDO Seidman was required to pay $170 million in compensatory damages to Banco Espirito, Portugal’s third-largest bank, and $351.7 million in punitive damages. In February 2010, BDO Seidman argued its case to the appellate court, which today ruled that "because the trial was improperly split into three phases, the jury's decision that BDO was grossly negligent was made prematurely--before it could consider whether other parties, including Espirito Santo itself, might also be at fault."


Steven Thomas, counsel for Banco Espirito Santo, stated that "the evidence of BDO Seidman's failures of even the most basic auditing procedures is so overwhelming that we expect a new jury will reach the same conclusion as the original jury."