New York, NY, February 6, 2015 – The Second Circuit U.S. Court of Appeals issued an amended opinion regarding the appeal by former Duane Reade drugstore chain CEO Anthony Cuti, vacating more than two-thirds of the $7.6 million restitution award that had been imposed in the Southern District of New York following Mr. Cuti’s 2010 conviction for securities fraud.
Notably, in July 2010, the trial court found that Mr. Cuti’s crime had caused no losses to any victims. The subsequent restitution award consisted solely of fees and expenses allegedly incurred by Duane Reade and its former private-equity owner, Oak Hill Capital Partners, LP in connection with investigating Mr. Cuti’s conduct. In vacating most of that fee award, the Court of Appeals reasoned that the award appeared to include fees that were not the proper subject of restitution because they were not “necessary” to the government’s investigation or prosecution of the case.
In its original opinion, issued September 11, 2014, the Second Circuit vacated only about one-fifth of the restitution award. The Firm filed a petition for rehearing, focusing on two issues where it appeared that the Court’s opinion had misapprehended certain aspects of the proceedings. Petitions for rehearing in criminal appeals are frequently filed but rarely successful. In this instance, however, the Second Circuit revised its opinion to address both issues raised by the petition.
The appeal was argued by Brian C. Brook, managing partner of the Firm’s New York/New Jersey practice. Matthew J. Peed, who is based out of Washington, DC, assisted with drafting the briefs, and he was also primarily responsible for drafting the successful petition for rehearing.
The case is United States v. Anthony Cuti, 13-cr-2042. The Second Circuit panel was composed of Circuit Judge Rosemary Pooler, Circuit Judge Dennis Jacobs, and District Judge Nelson Roman (sitting by designation). A copy of today’s amended opinion can be read below.