Law Firms

Federal Judge Says Calif. Law Allows Clawback Claims Against Ex-Thelen Partners But NY Law Doesn't

In a ruling that could affect former partners of other failed law firms, a federal judge in New York held Tuesday that a bankruptcy trustee can pursue clawback claims against some but not all of Thelen’s former partners.

Drawing a distinction between what is permitted under California and New York law, U.S. District Judge William Pauley OK’d clawback claims against former Thelen partners working for Robinson & Cole, but nixed claims against former Thelen partners working for Seyfarth Shaw, Reuters reports.

In his written opinion, which can be found on the court’s website, Pauley explains that the parties agreed California law applied to Robinson & Cole, but disputed whether California or New York law controlled concerning former Thelen partners now working at the New York office of Seyfarth Shaw.

However, his ruling likely won’t be immediately applied, because Pauley has certified his decision for an interlocutory appeal to the New York City-based 2nd U.S. Circuit Court of Appeals.

Related coverage: “Dewey Partners in Name Only Led to Breakup, Looming Battles, Likely Clawback Fight, Columnist Says” “Law Firms’ Appeal of Coudert Bros. Clawback Ruling Could Benefit Former Dewey Partners, Too”

Reuters: “Thelen trustee reaps $1 million from law firms”

Updated at 5:47 p.m. to include information from opinion and link to district court website.

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