Smith Gambrell Quotes Easterbrook in Answer to Malpractice Complaint
Smith, Gambrell & Russell has answered an $80 million bankruptcy trustee’s malpractice complaint by quoting an opinion by Judge Frank Easterbrook questioning the litigation judgment of some bankruptcy trustees.
Trustee William Perkins claims the law firm and its former counsel, C. Gladwyn Goins, failed to prevent the founder of a now-defunct Atlanta investment firm from embezzling from his clients. Smith Gambrell, however, contends the trustee can’t recover since he stands in the shoes of the bankrupt hedge fund, which ran an unlawful Ponzi scheme, according to the Fulton County Daily Report. A lawbreaker cannot recover, said the law firm’s lawyer, H. Lamar “Mickey” Mixson.
Smith Gambrell’s answer to the suit begins by quoting an opinion by Easterbrook, chief judge of the Chicago-based 7th U.S. Circuit Court of Appeals. “The trustee of a defunct business has little to do besides filing claims that, if resisted, he may decide to sue to enforce,” Easterbrook wrote. “Judges must therefore be vigilant in policing the litigation judgment exercised by trustees in bankruptcy, … imposing sanctions for the filing of a frivolous suit.”
Perkins, on the other hand, says the hedge fund’s owner, who committed suicide, was the wrongdoer and his actions cannot be attributed to the hedge fund, the story says. Perkins’ lawyer, Robert Shields, also maintains that Perkins is a receiver who represents creditors rather than a trustee.
