Ex-Clients Sue Carlsmith for $25M, Claim Firm Sold Out Minority Owners in Hotel Deal
One of Hawaii’s oldest and best-known law firms has been sued for malpractice by former clients seeking $25 million in compensatory and punitive damages.
While representing both majority and minority shareholders concerning the 2004 sale of a hotel in Saipan, the Honolulu-based Carlsmith Ball firm negotiated a deal that benefited the majority at the expense of the minority, the latter group contends in an amended complaint filed this week in Northern Marianas Superior Court, according to the Pacific Daily News of Guam.
They contend the Carlsmith firm “pushed through the transaction over the objection of minority shareholders, who they also represented, without disclosing the true facts and circumstances, knowing that the minority shareholders’ holdings would be rendered almost worthless by the transaction,” reports the Pacific Business News.
The 70-attorney firm told the Guam newspaper there is no merit to the suit’s claims concerning the Hafa Adai Beach Hotel deal and that Carlsmith Ball intends to defend aggressively. The firm has had offices in Saipan for 24 years.
