A FIRM NO

A BLOODY BATTLE IS HINTED AT IN A LAW FIRM'S COUNTERSUIT AGAINST AN EX-RTC BIGWIG.

Before he was hired, North told the firm "he was not aware of any conflict of interest that would be adverse to Baker & Hostetler," the countersuit says. Not long afterward, however, the RTC alerted the firm that North was the target of an investigation by the agency's inspector general. Clark confronted North about the investigation and asked why he hadn't told the firm about it. North's response, according to the countersuit, was that the probe was "politically motivated" and would be dropped after the presidential election of November 1992.

But in January 1993, the countersuit alleges, Clark learned that the investigation was far more serious than North had let on. RTC officials met with Clark in the beginning of that month and told him that the agency was refusing to award any more work to Baker & Hostetler's Denver office. The officials demanded that North be "walled off" from all RTC legal matters and even threatened to terminate all of Baker & Hostetler's RTC work nationwide.

No charges were ever brought against North as a result of the investigation, sources familiar with the case say, and North continued on his leave of absence for the rest of 1993. In November of that year, the countersuit says, the firm's Denver partners "held a vote and determined that they did not want North to return to the office."

Baker & Hostetler is seeking at least $450,000 in damages from North, saying that he "concealed material facts" from the firm while angling for a job, including the existence of the RTC investigation and his "lack of practical experience" handling professional liability cases. "North fraudulently induced Baker & Hostetler to extend him an offer of employment," the firm says.

Baker & Hostetler's attorney, Frances Koncilja, could not be reached for comment. North's attorney, Jay Horowitz, declines to comment on the countersuit in detail but says "there's nothing alleged in the counterclaim which changes North's view that he was improperly dealt with" by the firm.

At the RTC, meanwhile, government staffers who remember North are following the case closely, according to the attorney inside the agency. North's former colleagues, the attorney says, are "surprised that things didn't settle" out of court before they got this ugly.

"The gloves have come off," the RTC attorney says. "It's going to be a no-holds-barred lawsuit.

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