Convicted Milberg Partners Accused in Lawsuit of Draining Firm’s Assets
Two former partners at Milberg contend in a lawsuit that partners who pleaded guilty to paying kickbacks to lead plaintiffs harmed the law firm and drained its assets.
The suit could be just the beginning of litigation against founder Melvyn Weiss and former partners William Lerach, Douglas Bershad and Steven Schulman, the New York Law Journal reports. Sanford Dumain, a member of Milberg’s management committee, told the publication the firm is also considering litigation against the former leaders.
On Monday, Milberg agreed to pay a $75 million fine in exchange for an agreement with prosecutors to drop charges against the firm filed in connection with the kickbacks.
The suit was filed in Manhattan federal court by former antitrust partners Michael Buchman and John Richards. Buchman’s suit names all four former partners as defendants; Richards’ suit does not name Bershad.
The plaintiffs said judges disqualified them in two cases because of the law firm’s legal troubles, the New York Law Journal story says. Their complaints claim the defendants refused to quickly acknowledge the truth, putting the professional and financial interests of other lawyers at the firm in jeopardy.
A lawyer for Weiss, Benjamin Brafman, responded to an inquiry from the New York Sun about Richards’ case, saying it is without merit. “Instead of seeking to take unfair advantage of a difficult situation, Mr. Richards should take note of the extraordinary success he was able to enjoy and participate in, largely as a result of the genius and great legal skills of Mel Weiss,” he wrote in an e-mail to the publication.
