Posted Jan 29, 2014 10:35 pm CST
A major Pittsburgh-based international law firm and one of its top attorneys have agreed to pay $23.7 million to settle a malpractice lawsuit brought by a bankruptcy trustee winding up the affairs of a former client.
The agreement by K&L Gates and Sanford Ferguson did not involve any admission of liability in the Allegheny County case, which concerns LeNature’s Inc., a now-defunct soft drink maker in western Pennsylvania, according to the Associated Press and the Pittsburgh Tribune-Review.
Hired by three members of LeNature’s board in 2003 to look into concerns that CEO Gregory Podlucky was involved in theft and other wrongdoing, Ferguson kept the CEO informed about the progress of the probe and three years later handled an initial public offering for LeNature’s, trustee Marc Kirschner alleged in court pleadings. Podlucky is now serving federal prison time, along with six family members and business associates, for crimes connected to what officials called a $600 million to $900 million corporate fraud.
Kirschner contended Ferguson was not experienced in corporate fraud investigations and could have shut Podlucky down earlier if the law firm had handled the matter differently.
The lawyer and K&L Gates declined, through a spokesman, to comment.
Additional and related coverage:
ABAJournal.com: “Appeals Court OKs Trustee’s $500M Suit Blaming K&L Gates for Missing Massive Fraud”
ABAJournal.com: “Ex-CEO blames lawyer for 20-year prison term in $800M fraud case, seeks do-over”