Legal Malpractice

How Bankruptcy Proceedings Influence Legal Malpractice Cases

By (Andrew Lavoott Bluestone)

In Garnett v. Fox Horan & Camerini LLP the unusually but by no means novel situation arises where a "liquidating trustee" sues the debtor's pre-petition attorney for acts that may have led to the Chapter 11 bankruptcy.  Here, in a decision by Justice Jane Solomon, of Supreme Court, New York County

Boylan International, Inc. was an entity that ran into trouble.  It was assessed with additional rent in the nature of tax escalation costs and hired Fox Horan to litigate the $ 275,000 issue.  The law firm did so for three years which ended in a stipulation of settlement.  Shortly thereafter, Boylan filed for Chapter 11 relief and the trustee determined the settlement to be improvident and onerous.  The stipulation was vacated and a new arrangement made with the landlord.

Supreme Court found the legal malpractice claim to be that "a better lawyer would have been able to eliminate the increased amount of tax escalation rent.  that claim is unsound, and defeats the malpractice claim."

Full post as published by New York Attorney Malpractice Blog on August 19, 2010 (boomark / email).