Troubled Corporate Client Creates Headaches for Four Unpaid Law Firms
Four law firms are claiming that one financially troubled company has failed to pay millions of dollars in legal fees.
One of the firms, Morgan, Lewis & Bockius, claims in a lawsuit that it is owed $2.5 million in fees, the New York Law Journal reports.
The defendant, Home Solutions of America Inc., specializes in restoring homes after disasters. It has been delisted from the Nasdaq Stock Exchange and is selling its core assets. In June, its former chairman, Michael McGrath, pleaded guilty to mail and wire fraud and money laundering in connection with another company, U.S. Mortgage Corp., for which he served as president, the New York Law Journal says.
Home Solutions argued in the Morgan Lewis case that the law firm knew of the company’s difficult financial condition and the risk of nonpayment. But the law firm defending Home Solutions, New Jersey-based Riker, Danzig, Scherer, Hyland & Perretti, now says it is owed $60,000 for its legal work. A Manhattan judge has granted Riker Danzig’s request to withdraw from the suit.
Two other law firms—Fulbright & Jaworski and Hallett & Perrin—are seeking permission to withdraw from their defense of Home Solutions in two other cases, a class action and a derivative suit, the story says.
