Law Firms
Judge Allows Claim Against Schulte Roth for Aiding Client’s Breach of Duty
Posted Aug 11, 2008, 09:03 am CST
By Debra Cassens Weiss
A New York judge has allowed a suit against Schulte Roth & Zabel that claims the law firm helped the co-founder of a startup breach his fiduciary duty to the company.
The plaintiff is Brin McCagg, the co-founder of a company called Clearjets that was formed to sell fractional ownership of private planes, the New York Law Journal reports. The company was devastated, McCagg’s suit says, when co-founder Alan Clingman backed out after signing a noncompete agreement as part of his sale of his stake in a similar company, according to the story.
Schulte Roth handled the incorporation of Clearjets.
Judge Bernard Fried said McCagg may have an aiding-and-abetting claim against Schulte if he can show the firm substantially helped Clingman execute the noncompete agreement, the story says. However Fried said the firm had no duty to prevent Clingman from leaving and tossed claims for malpractice and breach of fiduciary duty.