Home -> Law Blog Directory -> Legal Malpractice Blogs -> New York Attorney Malpractice Blog

OR PHONE (866) 635-1838 for Bankruptcy Help, (866) 635-6190 for Divorce,
(866) 635-2689 for Personal Injury or (866) 635-9402 for Criminal Defense

Find a Local Lawyer

Bankruptcy (866) 635-1838
Divorce (866) 635-6190
Personal Injury (866) 635-2689
Criminal Defense (866) 635-9402

Legal Malpractice

: New York Attorney Malpractice Blog

One of the Larger Legal Malpractice Cases in NY is Dismissed

By (Andrew Lavoott Bluestone)

ADVERTISEMENTS

We have written that legal malpractice cases arise from a large base of underlying matters. Here is a huge NY case that starts in Austria, travels east to Russia, and then is dismissed in New York. In this story from the NYLJ by Nate Raymond we see how an Austrian Bank which lost it all in Russia came to New York to sue and lose a legal malpractice case against Chadbourne & Parke.

"A state judge on Friday threw out a $500 million lawsuit by an Austrian bank against Chadbourne & Parke stemming from advice its Moscow office gave the bank about the structure of an investment vehicle whose legality later came under scrutiny.

Creditanstalt Investment Bank AG, which later merged with UniCredit Bank Austria AG, claimed the investment vehicle fueled an investigation by Russian authorities beginning in 1999 that ultimately resulted in the seizure of bank accounts and the bank pulling out of Russia.

Chadbourne countered that a raid by Russian tax police stemmed instead from a former employee who stole from the bank's accounts. It argued an arbitrator already ruled on the legality of the structure.

Justice Barbara Kapnick said in Creditanstalt v. Chadbourne & Parke, 106539/2001, that the bank provided "no admissible evidence" to support its legal malpractice claim and could not demonstrate it would have sustained damages if not for Chadbourne's negligence. She granted the firm's motion for summary judgment and dismissed the complaint with prejudice."

"Chadbourne in 2004 lost a bid to have the case tried in Russia instead of New York (NYLJ, June 14, 2004). The firm had better success in 2007, when a divided First Department, Appellate Division, panel ruled that the bank had waived its right to attorney client privilege (NYLJ, April 5, 2007).

Creditanstalt, with advice from the Denver-based firm of Holme Roberts & Owen, in 1996 acquired the assets of a Russian company engaged in securities brokerage activities. The bank then allegedly turned to Holme Roberts for advice on a legal structure that would allow its clients to invest in Russian securities. Those securities included Gazprom, the Russian natural gas giant.

Holme Roberts closed its Moscow office in 1998 as its team there joined Chadbourne, which took over the Creditanstalt relationship. The bank said Chadbourne provided a legal opinion on the structure's legality, specifically with regards to a decree by President Boris Yeltsin in 1997 limiting the extent foreign entities could invest in Gazprom. It also issued a risk assessment letter in 1998 advising on the legality of the structure.

Creditanstalt claimed Chadbourne later realized its advice was faulty but failed to tell the bank. It also claimed Chadbourne failed to warn about any potential repercussions. Chadbourne disputed that its advice was wrong and claimed it warned the bank of tax and political consequences of the structures."

Full post as published by New York Attorney Malpractice Blog on January 11, 2010 (boomark / email).