Motion Asks Judge to Refer Pillsbury Partner for Possible Perjury Prosecution

A lawyer for the successor company to SonicBlue has asked a judge to refer a partner at Pillsbury Winthrop Shaw Pittman to the U.S. attorney’s office for possible prosecution.

The motion claims Los Angeles partner William Freeman failed to disclose fees that Pillsbury withdrew from SonicBlue’s retainer account in the 90 days leading up to SonicBlue’s bankruptcy filing, the Recorder reports. The motion says the withdrawals were preference payments that impaired Pillsbury’s ability to represent SonicBlue as a disinterested party in bankruptcy. All parties hired in a bankruptcy are required to disclose connections with debtors, including preference payments, the story says.

The lawyer who filed the motion, William McGrane, represents successor company SonicBlue Claims. “The conclusion Mr. Freeman willfully perjured himself … has now become utterly inescapable,” McGrane wrote in the motion, according to the Recorder account.

McGrane claimed Freeman withheld information about the payments from the court as part of his application to be employed as SonicBlue’s bankruptcy counsel. "How sad, and how absolutely criminal, all this misconduct ultimately was," McGrane wrote.

McGrane quotes from an e-mail that Freeman sent to another Pillsbury lawyer, Craig Barbarosh, the story says. “The firm has major exposure here," the e-mail said. Barbarosh replied, “We're going to get f---ked … I'm very uncomfortable.”

Pillsbury was kicked off the case a year ago for failing to disclose an opinion letter promising three hedge funds payment as senior bondholders even if SonicBlue filed for bankruptcy. The bankruptcy trustee had argued the law firm might be responsible for any shortfall in payment to the hedge funds, so it would be motivated to make sure they were paid in full.