LeClairRyan trustee targets company co-founder in UnitedLex lawsuit
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- Related documents
- Amended Complaint Alleges LeClairRyan Operated As A Ponzi Scheme During Company’s Last Years
- UnitedLex Says Administrator Trying To “Stretch Out” Company
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(Reuters) – The Chapter 7 administrator overseeing the dissolution of law firm LeClairRyan on Wednesday unveiled new claims against Gary LeClair, the firm’s longtime co-founder and head of the firm, for reaching a deal with the alternative legal services provider UnitedLex which contributed to the bankruptcy of the law firm in 2019.
The 94-page complaint alleges that LeClairRyan’s deal with UnitedLex in 2018 increased the ailing law firm’s debt while giving UnitedLex control over the firm’s operations and the ability to use its intellectual property.
LeClair, meanwhile, got richer in the last few years from his law firm, LeClairRyan operating as a Ponzi scheme by using capital contributions from new side hires to pay inherited shareholders, the administrator claimed. from Chapter 7, Lynn Tavenner.
“For those who weren’t paid when the music stopped, it was no different than a ‘money in, money out’ con game,” Tavenner added.
J. Gregory Milmoe, a shareholder in Greenberg Traurig who represents UnitedLex entities, declined to comment. Tavenner’s attorneys at Quinn Emanuel Urquhart & Sullivan did not respond to a request for comment, nor did LeClair and his attorneys.
Tavenner, of Tavenner & Beran, was appointed trustee in October 2019, a month after the law firm filed for bankruptcy. In October 2020, Tavenner, in his capacity as trustee, sued UnitedLex.
Earlier this month, Tavenner sought leave to add further claims and add LeClair as a defendant, filing the amended complaint under seal. Richmond bankruptcy judge last week gave Tavenner the green light to deal with his amended complaint
U.S. bankruptcy judge Kevin Huennekens has postponed a scheduled trial in the case from October to April to explain the fact that LeClair was added as a defendant.
UnitedLex and LeClairRyan created ULX Partners in 2018, promising a new model of supporting law firm operations that could expand to other firms.
But the deal allowed ULX Partners to take control of LeClairRyan’s accounting, marketing, conflict management and business development operations, Tavenner said. UnitedLex has also pressured the company to prioritize payments made to it over other creditors, the trustee added.
UnitedLex and its affiliates, ULX Partners LLC and ULX Manager LLC, represented by attorneys for Greenberg Traurig, vigorously opposed Tavenner’s allegations on Wednesday, filing his own 73-page response the same day.
In its response, the alternative legal service provider accused Tavenner of attempting to “extract money” from the company and ignore the fact that UnitedLex is LeClairRyan’s biggest creditor.
“Rather than objectively investigating the facts behind LeClairRyan’s disappearance, the administrator chose to fabricate a bizarre and perverted story bringing together baseless and defamatory accusations and facts twisted to fit legal theories. unenforceable, ”UnitedLex wrote.
LeClairRyan administrator gets green light to extend UnitedLex deal lawsuit