Ex-Partners Sue Law Firm Managers for Surprise Closing of Their Office
Five former partners of a law firm based in Buffalo, N.Y., have sued the CEO and board of directors for closing their office in Florida, claiming the managers acted without an advance vote of the partnership.
The suit by former Hodgson Russ partners in Boca Raton claims their rights under the partnership agreement were violated by the action, the Daily Business Review reports. “The Florida partners were blindsided” by the announcement in April 2009, the lawsuit (PDF posted by the Daily Business Review) says.
According to the suit, firm CEO Gary Schober informed the Boca Raton partners that the board of directors had decided to close their office, then issued a press release claiming the closing was in the best long-term interests of the firm. The entire partnership did not affirm the decision until after the announcement was made, the suit says, and the Boca Raton partners did not participate in the vote.
“Incredibly Schober later claimed that he and the other defendants had decided to close the Boca office without submitting the matter to a vote of the partnership because of their reliance upon the (nonlegal) advice of a third party, i.e., an outside public relations company that the firm had hired to help the firm with its image and client relations,” the suit says.
The suit claims the press release gave the misleading impression that the ex-partners weren’t profitable, when in reality the economics were favorable. The plaintiffs seek damages for breach of contract, breach of fiduciary duty, and defamation.
