Having outlived the good ol' boy era, when it had a hand in every deal, houston legal giant

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The Morans allege that a major undisclosed conflict of interest in V&E's representation of the estate was the presence of Evans Attwell, then V&E's managing partner, on the board of directors of First City Bancorporation. It's a claim at which the firm has scoffed, explaining that the relationship between the bank and the law firm was very well known.

"The Morans didn't just drop off the back of a watermelon truck," laughs one former V&E partner. "Everybody knew about the ties between the bank and the firm."

Attwell says his presence on the board was public knowledge, and, in any case, First City Bancorporation was simply a holding company for First City Bank and 19 other banks, and his position allowed him no input on either loans or trust management by the Houston bank.

First City reacted to Pat Moran's proposal to remove the estate funds by cutting off his line of credit, but the transfer of half the estate funds to Texas Commerce was eventually made, shortly before the First City Bancorporation was declared insolvent in 1987. (First City Bancorporation was recapitalized in 1988 under Chicago banker Robert Abboud, but eventually failed altogether and its assets sold to other financial institutions.)

With the approval of the executors, First City earlier had brought in an executive recommended by Vinson & Elkins to run the Moran companies. He was W.J. Wooten, a friend of Attwell's and a former consultant to First City, according to Pat Moran. The Morans claim Wooten took a number of actions that damaged the family companies, including moving the Moran Corporation, the umbrella for the estate's corporate assets, into expensive new headquarters in First City Tower, where both the bank and the law firm officed.

According to court documents, Wooten awarded himself a large bonus without the approval of all the executors, and in an act hugely symbolic to Ann Moran, appropriated the use of the Moran family's coveted Astrodome box for the Houston Livestock Show and Rodeo.

"My grandfather was one of the original founders, had tickets, and the employees of our companies used them for their kids," says Ann Moran. "[Wooten] took it and crossed off my grandfather's name and wrote, 'To the account of W.J. Wooten' and he gave his home address. And that was the end of a piece of property that belonged to the employees of the Moran Corporation and my family. In that one piece of paper it says [to me]: 'We are entitled to take whatever we want from these people and do what we want with it.' And that entitlement is what you see in their behavior."

Pat Moran says both the family pipeline and the utility company steadily lost value under Wooten's management. Industry competitors began calling, he says, and inquiring why the pipeline wasn't being marketed and why a favorable gas purchase contract was allowed to expire. According to the Morans, Wooten and First City then began a push to have the estate sell Moran Utilities to Entex, which offered $6.8 million, an amount Pat Moran considered grossly under the company's market value.

His brother Bill Moran, a financial analyst, put together a counter-offer from some family members to buy Moran Utilities from the estate at a slightly higher price than what Entex had offered. When Entex made a second offer, the family again topped it. At that point, the negotiations, in which V&E represented the estate, were called off.

The Morans say they were unaware at the time that both V&E and the bank had ties to Entex. First City had made credit advances to Entex to facilitate the purchase of Moran Utilities, and Pat Moran later learned that First City Bancorporation and the V&E Lawyers Retirement Plan had a limited partnership whose purpose was to purchase Entex oil and gas properties and lease them back to Entex.

Eventually, Entex withdrew its offer for Moran Utilities.
Then, in 1988, the family began hearing disturbing rumors that Seagull Energy and a senior attorney at Vinson & Elkins had the estate's pipeline "in the bag," says Ann Moran. When she questioned First City managers about the report in a telephone conference, her worries were dismissed as "paranoia," she says.

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Tim Fleck
Contact: Tim Fleck