Shareholders sue Eaton over Peters-Delaughter relationship

CLEVELAND, Ohio — Eaton Corp. is facing two lawsuits arising from a high-stakes trade secrets case that a Mississippi court threw out after concluding Eaton tried to sway the judge overseeing the case.

A lawsuit in Cuyahoga County Common Pleas Court says Eaton’s in-house lawyers violated their duty to shareholders by participating in an outside attorney’s improper contact with state Judge Bobby DeLaughter. Eaton’s board of directors either knew of the situation and failed to stop it, or fell down on their duties to actively monitor Eaton lawyers, the suit says.

In a sign of deepening troubles for Cleveland’s biggest corporation, Eaton is facing a second new lawsuit that is linked to the tangled trade secrets case it brought against Frisby Aerospace seven years ago. Frisby, now called Triumph Actuation Systems, countersued Eaton in federal court in Greensboro, N.C., earlier this month.

Cleveland.com
2/16/11