For almost three years, Wall Street has been anticipating a major courtroom showdown that would pit "The Enforcer," New York Attorney General Eliot Spitzer, against famed defense attorney Brendan Sullivan in the Dick Grasso over-compensation case. But CNBC has learned that one of the consequences of a recent ruling is that Grasso will lose Sullivan as his attorney once the trial begins sometime next month.

The move comes after State Supreme Court Judge Charles Ramos moved up the trial date of the case to September 5 from October 30, putting what will likely be a six-week courtroom battle in the middle of another case Sullivan is already committed to: The third retrial of former Cendant chairman Walter Forbes by the US Attorney's office in New Jersey.

Grasso is being charged by Spitzer of violating the state not-for-profit law after being awarded a $140 million pay package that led to his resignation as Chairman and CEO of the New York Stock Exchange back in 2003. The law states that the compensation of officials who work at not-for-profits must be reasonable and commensurate with duties performed. Spitzer wants Grasso to return as much as $100 million to the stock exchange, which was a not-for-profit entity before it became a public company earlier this year. The Attorney General also charged former NYSE compensation committee chairman Ken Langone with deceiving the NYSE board on a chunk of Grasso's pay package.

Both Grasso and Langone have mounted a vigorous defense in the case, claiming they've done nothing wrong and that Grasso's pay was fully disclosed to the NYSE board. In fact, Grasso told CNBC that he will be well-represented in the case by one of Sullivan's partners at his firm Williams & Connolly, Gerson Zweifach, who has been handling much of the nitty-gritty of the case including taking depositions and appearing at pre-trial hearings.

In fact, one of the ironies of the ruling last week is that while Langone and Grasso said they have no problem with the new court date, the attorney general's office said the new date may pose problems. Spitzer's lead attorney in the case, Avi Schick, told Judge Ramos that the new date doesn't give the attorney general's office enough time to prepare for what's going to be one of the most closely watched cases on Wall Street in years. Nearly every major Wall Street CEO has served on the board of the stock exchange, and many are expected to be called as witnesses, including former Goldman Sachs CEO and current Treasury Secretary Hank Paulson.

But there may be another reason why Spitzer wants a delay in the trial date; the September 5^th court date comes just days before the Democratic campaign for governor. The expected six-week trial will take place during the height of the New York State gubernatorial race to be decided on election day, November 7. At least for now, Spitzer is considered the front-runner, so the last thing he needs is a high profile defeat in the middle of the campaign. 

Spitzer's political priorities could be one reason why Grasso says he isn’t concerned about losing Sullivan and having Zweifach as his lead attorney. "They wont face Cy Young," Grasso told CNBC, "but they will face Warren Spahn, who by the way had a better winning percentage".

Charles Gasparino - CNBC