Law Firms

Mayer Brown Sued for $17 M

Mayer, Brown, Rowe & Maw is fighting a $17 million suit by a trustee for a bankrupt company.

U.S. District Judge Virginia Kendall of Chicago refused to dismiss the suit last month, the New York Law Journal reports. The suit claims the Chicago-based firm failed to defend health care management company CMGT Inc. when its former financial adviser sued for fees related to a proposed financing deal.

The adviser blocked the deal and obtained a $17 million default judgment, leading to the company’s failure, the trustee claims.

The suit comes as a trustee for Refco criticized Mayer Brown for its representation of the brokerage firm before it collapsed in an accounting scandal. The trustee said the firm knew or should have known about fraudulent financial transactions, an assertion disputed by the law firm, the Chicago Tribune reports.

In the CMGT matter, Mayer Brown says it was never hired to represent CMGT against the financial adviser’s suit. But Kendall said it was still unclear whether the law firm had a duty to defend the company. She cited e-mails from partner Ronald Given, who has since left the firm.

Given invited the suit, Kendall said, by telling the adviser he should “bring it on” because his claim was without merit. Given also assessed the case in an e-mail to company officers and shareholders. However another e-mail to the group said the firm had not been hired to deal with the matter.

Mayer Brown also alleged the trustee’s suit is being financed by the financial adviser in an effort to collect the judgment. But Kendall said the law firm had not provided enough evidence of fraud by the trustee.

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