His practice has included medical device defense, environmental law and corporate trust litigation. Lately he’s occupied with a lot of corporate trust work, also called securitization, or pooling of income producing assets into an entity that holds them.
The practice involves transactions that relate back to the 2008 mortgage crisis. U.S. Bank is the trustee for a large number of mortgage debt dating from the crisis, McCarthy said. The assets are held in trust, and certificates are created based thereon and sold to investors. Thus, there are a number of investors involved with competing views of how the assets should be handled.
“Many of these trusts contain mortgages that didn’t perform. It’s not the trustee’s money,” he said. Conflicts then may arise trying to settle with a debtor. The amounts in controversy range from tens of millions to hundreds of millions, McCarthy said.
McCarthy also serves as general counsel to Maslon, and a possible headache was cleared up on Sept. 27, 2022, when the Minnesota Supreme Court reversed Energy Policy Advocates v. Ellison. In that case, the Court of Appeals said that the common-interest doctrine is not recognized in Minnesota as an exception to the general rule that the attorney-client privilege is waived if a privileged communication is disclosed to a third party. If it had been affirmed, it would have been a problem in multiparty litigation, McCarthy said. The court said the doctrine may apply to the Office of the Attorney General.
McCarthy and his colleagues are also noted for their success in saving a prisoner in Texas from execution. On Nov. 15, 2017, they secured the vacation of Douglas Tyrone Armstrong’s death sentence by the Texas Court of Criminal Appeals following 10 years on death row in Texas. Armstrong was retried and is in prison, but not on death row. It is noteworthy that the case was reversed by a state court, McCarthy said.