Law Firm Mulls Bankruptcy Amid Rumors of Failed Venture by Big-Spending Founder
Updated: A South Florida law firm is seeking dissolution after allegations surfaced this weekend about a failed investment venture by its high-profile founder, Scott Rothstein.
The Fort Lauderdale law firm Rothstein Rosenfeldt Adler has hired former U.S. Attorney Kendall Coffey to represent it and is considering filing for bankruptcy, according to a story broken by a blog of the Broward-Palm Beach New Times, the Daily Pulp. Stories in the Miami Herald and the South Florida Sun Sentinel followed.
An investment group that did business with Rothstein told the Sun Sentinel that it had contacted the U.S. Attorney’s office about concerns over “suspicious activity.” No formal charges have been filed, however. The law firm filed a complaint today seeking dissolution and the appointment of a receiver. (See updated coverage at ABAJournal.com.)
Broward County Chief Judge Victor Tobin sent an e-mail to county judges early today saying Rothstein Rosenfeldt Adler would seek to have a receiver appointed, according to a post this morning on the Daily Pulp. “If you have a case with the firm please be patient–I don’t know if the lawyers will come or not and if they do come there is no money at this point to go forward with the case or pay firm employees,” Tobin wrote. “They need to [have] a receiver appointed a quickly as possible to marshal whatever is left of the assets.”
Rothstein is a well-connected political fundraiser who has invested in a restaurant group, founded a watch company and invested in the former Versace mansion, according to the Sun Sentinel. The newspaper cites property records showing that last year alone, Rothstein spent more than $15 million on real estate in Fort Lauderdale, New York and Narragansett, R.I. “He also has amassed an impressive collection of exotic cars worth millions,” the Sun Sentinel says.
Coffey told New Times that Rothstein’s investment venture involved purchases of structured settlements in legal cases. The publication says “it’s a near certainty” that the law firm will be sued, whether the suits are “on solid ground or not.” The blogger quotes “solid sources” that investor losses could approach $100 million.
Coffey told the Sun Sentinel that lawyers in Rothstein Rosenfeldt Adler are shocked to hear of allegations swirling around Rothstein. “As far as I know, trust funds involving legal matters have not been mishandled,” he said.
Rothstein is out of town. The New Times said he was believed to be in Morocco; his lawyer, Marc Nurik, told the Sun Sentinel that Rothstein was out of town and would be returning. “He’s been away to clear his head,” said Nurik, who resigned from Rothstein Rosenfeldt Adler to represent Rothstein. “He didn’t flee anywhere. His intention is to straighten this thing out.”
Rothstein is “a major player in the world of political contributions,” the Sun Sentinel says. Rothstein has hosted fundraising events for John McCain, Florida Gov. Charlie Crist and California Gov. Arnold Schwarzenegger. He has also supported a Democratic gubernatorial candidate, and his law firm donated money to the Democratic party.
Updated coverage:
ABAJournal.com: “Rothstein Firm Seeks Allegedly Missing $100M to $185M; Is He in Morocco?”
ABAJournal.com: “Rothstein Rosenfeldt Seeks to Dissolve, Says MP Suspected of Wrongdoing Won’t Go”
Updated at 11:08 a.m. to include e-mail from Broward County’s chief judge. Updated at 1:15 p.m. to include links to updated coverage and information about the application for dissolution and the appointment of a receiver.
Prior coverage of Rothstein Rosenfeldt Adler:
ABAJournal.com: “Suits for Unpaid Legal Fees in Top 10 for Stupidity, Lawyer Says”
ABAJournal.com: “Best Friend’s Ex Charged in Florida Attorney’s Murder”
