A hearing on a request by Scudder Kemper Investments of Boston for a preliminary injunction against Robert Hoffman, Scudder's former managing director, is scheduled for May 1. A hearing was scheduled after Scudder filed a complaint in U.S. District Court April 17 alleging Hoffman is violating terms of a separation agreement he signed with the firm. If issued, the injunction would prohibit Hoffman from hiring Scudder-Kemper employees or soliciting any of its clients. A temporary restraining order to prevent Hoffman from hiring Scudder employees was issued when the complaint was filed.

Although Hoffman signed two agreements stating he would not hire Scudder employees for a limited period of time after he left Scudder, Hoffman hired two of the firm's vice presidents to work for his firm, the complaint alleges. Hoffman left to start a hedge fund.

"In light of Hoffman's current need for talented personnel, his familiarity and relationship with Scudder personnel, and his demonstrated willingness to hire personnel from Scudder in spite of his contractual obligations, there is imminent danger that he will continue his efforts to solicit Scudder employees to staff his new operation," the complaint said. Mark Friedman, Scudder's lawyer, was not available for comment.

Hoffman hired former Scudder Kemper executives Suzanne Twitchell, a former senior vice president of institutional marketing services and Christopher Coleman, a former senior vice president and manager of large cap listed trading. Twitchell and Coleman resigned from Scudder March 27 and April 3, respectively, according to the complaint.

Losing Coleman was particularly damaging to the firm because of his experience and the valuable relationships he developed with clients, the complaint states.

"A talented and experienced trader like Coleman can save the firm and its clients millions of dollars a year. In the short term, replacing him will be difficult or impossible," it said.

The case will be settled through arbitration, but the court's decision May 1 will have significant impact on the arbitration, said Nancy Shilepsky, an employment lawyer with Perkins, Smith & Cohen LLP of Boston. Whoever prevails in the injunction hearing will most likely prevail in the arbitration hearing as well, she said.

Scudder will need to provide a compelling case in order to receive a preliminary injunction because the standard for issuing injunctions is high, Shilepsky said. Scudder's lawyers will need to prove there are significant long-term damages that cannot be compensated, she said.

"That's a pretty powerful thing for them to say," she said.

In addition to being in violation of a separation agreement, Scudder alleges that Hoffman is in violation of a "Code of Ethics" agreement he signed while an employee. Hoffman signed a "Code of Ethics" agreement every year that he was employed by Scudder Kemper, the complaint said. By signing the code, Hoffman agreed to not solicit clients or firm employees for at least six months after leaving the firm, the complaint contends.

Hoffman and his lawyer, Laura Schnell, declined to comment.

Hoffman joined Scudder Stevens & Clark in 1990 as an assistant vice president. He eventually managed over $20 billion in assets with the Scudder Growth and Income Fund and the AARP Growth and Income Fund, two of Scudder Kemper's largest funds.

By 1999, the performance of the funds Hoffman managed was such that Scudder received complaints from investors and it was decided last October to switch Hoffman's responsibilities to institutional clients, according to the complaint.

Hoffman decided to leave the firm and negotiations began on a separation agreement. Hoffman signed the agreement December 28, 1999, according to the complaint. Under the terms of the agreement, Hoffman received an additional year of vesting in Scudder stock, option and retirement plans, the complaint said. He also received an immediate payout of "millions of dollars," it said.

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