Appeals Court Allows Malpractice Suit Against Shearman & Sterling
A New York appeals court is allowing a malpractice claim against Shearman & Sterling by a private investor who contends the law firm failed to make sure he retained superior rights to repayment on a loan he made.
Investor James Garten contends he made a $750,000 loan to a Las Vegas air charter company on the condition his security interest was superior to other creditors, the New York Law Journal reports. He claims in his lawsuit that Shearman & Sterling failed to prepare the necessary documents to carry out his wishes, the story says.
The appeals court said Garten’s pleadings were adequate to sustain a malpractice claim. The opinion said Shearman & Sterling is not relieved of potential liability because of the borrower’s failure to repay the loan or because of the failure of other creditors to adhere to the understanding that their liens were junior to Garten’s.
