A defamation suit targeting a New Jersey law firm could provide a cautionary tale about the potential dangers of reposting news articles online.
Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins was accused in a suit of defaming Florida-based Holtec International with allegations that the company produced “financial statements” that were “make believe.”
Although Javerbaum Wurgaft’s client has his own suit against Holtec, the litigation privilege does not apply because the law firm made defamatory statements that went beyond those in the complaint, Holtec’s suit claimed.
The latest suit, filed Friday in Camden County Superior Court, claimed Javerbaum Wurgaft defamed Holtec in online posts related to another suit that the firm filed against Holtec in June 2023 on behalf of the company’s former chief financial officer, Kevin O’Rourke.
That suit claimed O’Rourke was terminated after objecting when the company gave a potential investor a prospectus containing what he said were false and misleading statements and financial projections.
The Asbury Park Press published an article on July 7, 2023, about O’Rourke’s suit against Holtec, a Jupiter, Florida-based maker of parts for nuclear reactors with major operations in Camden.
On July 24, 2023, Javerbaum Wurgaft posted a reference to O’Rourke’s case on the firm’s website, under the heading “Our News.”
According to Holtec’s suit, Javerbaum Wurgaft’s site said, “Mr. O’Rourke claims that Holtec terminated his employment after he resisted submitting false financial statements to a major investor, an issue involving hundreds of millions of dollars.”
The item also included a link to the Asbury Park Press article, which was posted on Yahoo.com.
On Aug. 8, 2023, the Holtec suit claimed, the Asbury Park Press added an “editor’s note” to its article, saying that the headline and first sentence had been changed to make clear to readers that the documents in question were not financial statements as defined by generally accepted accounting principles. The note also said O’Rourke’s complaint does not reference Holtec’s financial statements.
According to the suit filed by Holtec, Javerbaum Wurgaft was made aware of the revision to the Asbury Park Press article and was asked to remove it from its website or remove any reference to financial statements. But the firm refused and did not make revisions, the Holtec suit claimed.
Holtec said in its suit that the allegedly defamatory statements jeopardized a $75 million, two-year grant from a foreign government and risked Holtec’s access to federal financing programs, including a $1.5 billion loan from the Department of Energy to restart a nuclear plant.
In addition, Holtec said the statements put it in danger of losing certain federal government projects, and that the company was forced to dedicate significant time and resources to explain the alleged falsehoods to third parties, such as its bank, insurance broker and state and federal agencies, international regulators, and its clients.
O’Rourke claimed in his suit that on Aug. 21, 2022, Holtec CEO Krishna Singh sent him a draft of an investment prospectus that was to be sent to a potential investor, Hyundai Engineering and Construction Co. Ltd.
O’Rourke claimed in his suit that he told Singh that the document contained numerous false and misleading statements and that legally it could not contain “make believe” or unsupported financial projections.
O’Rourke was terminated on Aug. 30, 2022.
Eric Kahn, managing shareholder of Javerbaum Wurgaft. Courtesy photoO’Rourke is represented by Drake Bearden Jr. of Javerbaum Wurgaft.
Holtec said in an answer to the suit that it denied O’Rourke’s claim that his dismissal was in retaliation for his whistleblowing activity.
Holtec also said in its answer that O’Rourke ”routinely refused assignments, complained about his pay, threatened to quit twice, and displayed erratic and hostile behavior to co-workers and third parties.”
Also in its answer to O’Rourke’s suit, Holtec said the document that he characterized as a draft prospectus is “a draft confidential writing” and an “internal draft document” containing a general explanation of Holtec’s business operations and did not contain sufficient information to be called a prospectus.
White and Williams represents Holtec in the wrongful-termination suit and the libel suit. Its attorneys did not respond to requests for comment about the litigation.
Eric Kahn, who is managing shareholder at Javerbaum Wurgaft, said his firm has not been served with the Holtec suit. He referred questions about the litigation to Bearden, who did not respond to a request for comment.
