Law Practice Management
Rothstein Firm Is Running on Fumes, Newspaper Says
Posted Nov 6, 2009 5:07 PM CDT
By Martha Neil
Despite an effort by partner and president Stuart Rosenfeldt to create a new law firm out of the apparent ashes of Rothstein Rosenfeldt Adler, the well-known Fort Lauderdale, Fla., law firm is running on fumes.
After stunning revelations of alleged misconduct by a top partner, the departure of some other lawyers, a federal raid and a firm-requested receivership within the last week, the firm now has $300,000 in available funds, reports the Sun-Sentinel.
And $200,000 of that amount is from a contribution to the state Democratic Party returned to the law firm this week after a possible Ponzi scheme by partner Scott Rothstein came to light.
Meanwhile, its daily operations have been significantly hampered by a federal raid in which agents seized computers and documents, attorney Kendall Coffey, who represents the firm, tells the newspaper. The RRA e-mail system is down, and attorneys and staff can't access a number of documents.
It's also unclear whether they will get their next paychecks, says court-appointed receiver Herbert Stettin, a retired Miami-Dade judge.
The firm's website apparently may have been taken down: It could not be accessed by the ABA Journal this afternoon.
"It's hard to believe a week ago this was a dynamic law firm," says Stettin.
The Miami Herald says the law firm expects the Federal Bureau of Investigation to return its computer server on Monday, allowing lawyers to access files.
In a court hearing today, Stettin told a Broward Circuit Court judge that Toronto Dominion Bank, which reportedly may have held some $700 to $900 million in accounts controlled by Rothstein, has "stonewalled" his requests for records. The judge ordered the bank to produce the records by noon on Monday, the Sun-Sentinel reports.
A bank spokeswoman tells the Herald that it will cooperate with the court order.
"At 3:09 p.m. today our counsel received an order from the court regarding a request for documents,'' Rebecca Acevedo tells the newspaper in a written statement. "This is the first communication our counsel has received from the law firm Rothstein, Rosenfeldt & Adler or the receiver.''
As discussed in earlier ABAJournal.com posts, Rothstein, who briefly fled to Morocco but has since returned and is reportedly talking with authorities, is accused by his partner, Rosenfeldt and a law firm petition for receivership, of misappropriating as much as $500 million in investor trust accounts he operated as a side business.
The accounts allegedly made use of the law firm name, but involved investors who were not RRA clients. They were controlled by Rothstein, who had a secure, soundproof office suite at RRA that featured a painting of Al Pacino in character as the Michael Corleone character in The Godfather, as detailed by the Miami Herald after a tour conducted by the firm
ABAJournal.com: "Miami Lawyer Says He Pointed Feds to Rothstein in Claimed $500M Scheme"
ABAJournal.com: "Feds Visit Rothstein Law Firm; Ex-Judge Is Appointed as Receiver"
ABAJournal.com: "Agents Seize Ferrari Key, 44 Boxes of Documents in Raid of Lawyer’s Offices"
Updated at 5:05 p.m. to add information from subsequent Miami Herald article.