Had Lehman not stepped in, First Alliance's prospects for finding a financial backer would have been "abysmal," Myers testified.
The FTC had declined to sue Lehman. Berkeley attorney Sheila Canavan, who had taken on First Alliance repeatedly in court, recruited allies for a lawsuit: Scruggs and fellow Mississippi trial lawyers John W. "Don" Barrett and Joseph C. "Joey" Langston. They put up $2.5 million and descended on Orange County in their private jets to press the case against Lehman.
As in battling Big Tobacco, Scruggs focused on internal memos, especially a Lehman report that said First Alliance required employees "to leave your ethics at the door." Lehman, he said in closing arguments, was "intent on winning the race to the bottom."
Defense attorney Duncan maintained that Lehman put careful thought and investigation into its decision to become First Alliance's chief financial backer, and believed the company had cleaned up its practices by the time Lehman assumed that role.
