Legal News for Thurs 8/1 - CPA Licensing Reforms, Giuliani's BK Dismissal Deal, CrowdStrike Shareholder Lawsuit, Paul Hastings Adds Enviro Partner from Arnold and Porter

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This Day in Legal History: Switzerland Federal Charter Signed

This day in legal history marks the anniversary of the signing of the Federal Charter on August 1, 1291, which laid the foundation for the Swiss Confederation. This historic agreement united three Alpine cantons—Uri, Schwyz, and Unterwalden—establishing a pact for mutual defense against external threats and maintaining internal peace. The Federal Charter, known as the "Bundesbrief," is one of the earliest examples of a written constitution in Europe, symbolizing the birth of Switzerland as a confederation.

The signatories pledged to support each other in disputes and conflicts, emphasizing the principles of cooperation and self-governance. This alliance was crucial in resisting the influence of the Habsburg dynasty, which sought to dominate the region. Over time, additional cantons joined the confederation, expanding and strengthening the alliance.

The Federal Charter's emphasis on mutual defense and collaboration laid the groundwork for Switzerland's longstanding tradition of neutrality and federalism. It remains a significant symbol of Swiss national identity and independence. The principles enshrined in the charter continue to influence Switzerland's political structure and commitment to direct democracy. Today, August 1 is celebrated as Swiss National Day, commemorating the unity and enduring legacy of the Federal Charter.

Accounting regulators and industry leaders are drafting reforms to state CPA licensing rules to expand the profession’s workforce by allowing new pathways to earn the credential. These changes may include skills acquired outside the classroom. Draft changes to model legislation, serving as a template for state regulations, could be ready for public comment by September. The goal is to finalize these changes before next year’s legislative sessions, according to Sue Coffey, CEO of public accounting for the Association of International Certified Professional Accountants.

The reforms aim to address declining graduation rates and a workforce that has shrunk by 17% since the pandemic. Proposed pathways for earning the CPA credential may include a mix of formal education and work experience, potentially eliminating the requirement for 150 college credit hours and specific schooling.

A recent report suggests offering skills-based paths without traditional education requirements, which could attract more candidates, including minority students. The report also recommends increasing starting wages, improving the profession’s image, and providing more flexible schedules.

The pipeline task force is collaborating with the National Association of State Boards of Accountancy to develop model language and outline essential skills for credentialed accountants. In September, a broader group of industry leaders will discuss advancing these recommendations and developing a scorecard to measure progress.

States are already exploring flexible education requirements, with some proposing alternatives such as apprenticeships and different combinations of education and experience. Coffey emphasizes that any licensing reforms should maintain the rigor of the CPA license while accommodating state-specific solutions.

CPAs Pitch More ‘Flexible’ Licensing Rules to Expand Workforce

Rudolph Giuliani has agreed to pay $100,000 in cash and use proceeds from future sales of his multimillion-dollar homes to settle administrative bankruptcy fees, concluding his Chapter 11 case. Giuliani and his largest creditors reached an agreement outlining how he will exit bankruptcy without having to testify about his finances. Despite a judge ruling that the case must be dismissed due to a lack of progress, Giuliani initially struggled to guarantee payment for an estimated $400,000 in fees.

Under the proposed order, Giuliani will immediately pay $100,000 to Global Data Risk LLC, with the remaining fees to be covered by proceeds from the sale of his Manhattan penthouse or his Palm Beach condominium. GDR will have liens on both properties and may foreclose if fees are not paid within six months. Giuliani’s Manhattan penthouse is listed for $5.7 million, and his Florida home is valued at approximately $3.5 million.

Giuliani filed for bankruptcy in December following a $148 million defamation judgment. He has $10.6 million in assets but failed to provide full financial records during nearly seven months in Chapter 11. Additionally, he faces a defamation suit from Dominion Voting Systems, criminal cases related to the 2020 election, and a $10 million lawsuit from former employee Noelle Dunphy for sexual harassment and assault. The case is In re Rudolph W. Giuliani, Bankr. S.D.N.Y., No. 23-12055.

Giuliani Reaches Bankruptcy Dismissal Deal to Pay Legal Fees

CrowdStrike has been sued by shareholders, accusing the cybersecurity company of concealing inadequate software testing that led to a massive global outage on July 19, affecting over 8 million computers. The proposed class action, filed in Austin, Texas, claims that CrowdStrike misled investors about the reliability of its technology, which was proven false when a faulty software update caused significant disruptions worldwide, including to airlines, banks, hospitals, and emergency services. Following the outage, CrowdStrike's share price dropped by 32% over 12 days, erasing $25 billion in market value.

Chief Executive George Kurtz is required to testify before the U.S. Congress, and Delta Air Lines has hired attorney David Boies to seek damages, reporting $500 million in losses from the incident. The lawsuit references a March 5 conference call where Kurtz described the software as "validated, tested and certified." CrowdStrike, based in Austin, denies the allegations and intends to defend itself vigorously. The lawsuit, led by the Plymouth County Retirement Association, seeks unspecified damages for holders of CrowdStrike Class A shares between November 29, 2023, and July 29, 2024.

The case is named Plymouth County Retirement Association v. CrowdStrike Inc et al, in the U.S. District Court for the Western District of Texas. The aftermath of the outage and the subsequent drop in stock prices might lead to more lawsuits against CrowdStrike.

CrowdStrike is sued by shareholders over huge software outage | Reuters

Paul Hastings has recruited Brian Israel, the former chair of Arnold & Porter’s environmental practice, to co-head its environmental litigation practice. Israel, based in Washington and Los Angeles, brings over 20 years of private practice experience and a decade of leadership in environmental law. He is known for representing major corporations such as BP in the Deepwater Horizon oil spill case, as well as companies like Chemours Co., CSX Corp., Dow Chemical, Honeywell Inc., Monsanto Co., and Motorola Solutions Inc.

Israel's decision to join Paul Hastings came after collaborating with its lawyers on a significant environmental case, which convinced him of the firm’s potential to become a leading force in environmental law. Paul Hastings’ environmental practice is co-chaired by Navi Dhillon and has a strong presence in California. Israel sees his move as an opportunity to help build a nationally recognized environmental practice.

This hiring continues Paul Hastings' trend of attracting top legal talent, including recent additions like a 12-lawyer white collar team in Paris, trial lawyer Renato Mariotti in Chicago, and cybersecurity expert Michelle Reed in Dallas. On the transactional side, the firm recently added an 11-partner private credit and restructuring team from King & Spalding.

Israel noted that his area of focus is evolving due to national low-carbon initiatives and recent Supreme Court rulings, which have reshaped the environmental regulatory landscape. These changes are increasing demand for high-level expertise in environmental law, a demand that Israel is well-positioned to meet. He joined Arnold & Porter in 2000 after serving as a trial attorney in the environmental enforcement section of the US Department of Justice and has authored a leading treatise on Natural Resource Damages claims.

Paul Hastings chair Frank Lopez stated that Israel’s addition enhances the firm's capability to handle complex and important matters for its premier clients.

Paul Hastings Lures Arnold & Porter Environmental Chair Israel

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