Alston & Bird Nears Malpractice Settlement With Bankruptcy Trustee
Alston & Bird is close to a settlement with a bankruptcy trustee to resolve allegations of legal malpractice and fee overcharges, according to the Fulton County Daily Report.
There is no admission of liability in the settlement with the bankruptcy trustee for Friedman’s Jewelers, a former Alston & Bird client, said Steven Collins, a partner and general counsel for the law firm, in an interview with the legal publication.
The trustee had claimed the law firm overcharged Friedman’s and committed malpractice by failing to disclose material facts to directors related to the company’s planned investment in another jeweler that later went bankrupt, the story says.
According to the trustee, when Friedman’s directors were weighing whether to make an $85 million investment in Crescent Jewelers Inc., the law firm failed to tell them the money would be unsecured and Crescent was experiencing financial problems.
Collins told the Fulton County Daily Report that a special committee of directors evaluating the loan had more information about Crescent’s financial condition than the law firm.
