Posted Dec 17, 2009 01:19 am CST
Responding to a Pennsylvania malpractice suit contending that a major law firm should have detected an alleged fraud by executives during its internal investigation of a now-bankrupt beverage maker, K&L Gates has fired back in preliminary objections to the Allegheny County action.
It contends, among other arguments, that there is no jurisdiction for the trustee of bankrupt Le-Nature’s Inc. to bring the suit. That’s because the trustee, Marc Kirschner, is standing in Le-Nature’s shoes, and the law firm never represented the company, only a special committee of its board, reports the Legal Intelligencer in an article reprinted in New York Lawyer (reg. req.).
Hence, under the state’s strict privity-of-contract requirement concerning legal malpractice claims, the company and its trustee lack jurisdiction to sue, the law firm argues. Although there is an exception as far as intended beneficiaries are concerned, it allegedly isn’t applicable under the language of the K&L Gates engagement letter for the representation.
ABAJournal.com: “K&L Gates Missed ‘Massive Fraud’; Its Probe of Co. a ‘Stunning Failure,’ Suit Says”