Legal Malpractice

Fallout from the Marc Drier Episode in a Legal Malpractice Setting

By (Andrew Lavoott Bluestone)

From the NYLJ on 6/16/10 by Nate Raymond:  "Dechert Loses Bid to Dismiss Suit Over Letter Used by Dreier."  The case is Fortress Credit Corp. v. Dechert LLP, 603819/2009

"Dechert has lost a motion to dismiss Fortress Investment Group LLC's $50 million lawsuit over the law firm's issuance of an "utterly false legal opinion letter" that ex-attorney Marc S. Dreier used in his $700 million scam. Manhattan Supreme Court Justice Charles Ramos (See Profile) last week called Dechert's motion "premature," according to a transcript. "This is really a summary judgment motion," he said. "After we have discovery, we'll know what we're talking about here. You are raising interesting issues, but I'm not going to dismiss any part of this complaint."

Dechert, which declined comment, was sued by Fortress in December over an opinion letter by the law firm that was used in Mr. Dreier's fraud. Fortress, which spent $125 million purchasing fake notes from Mr. Dreier, claimed in 2008 it required the lawyer to obtain an opinion letter from an "internationally recognized law firm" in connection with a $50 million loan he was arranging supposedly for his client, Solow Realty & Development Company. Mr. Dreier proposed Dechert, where then-partner Bruce Wood drafted the opinion letter.

Dechert in the letter said it represented developer Sheldon Solow and assured Fortress the deal was legitimate, according to the complaint, when in fact it was a "sham." Fortress argued Dechert misrepresented itself as lawyers to Solow Realty without doing "even the most basic due diligence" on the deal. Dechert contended it was not the firm's responsibility to ensure Mr. Solow's signatures were legitimate, and that the opinions themselves in the letter were accurate. The letter, included as an exhibit to the complaint, said Dechert had been retained by both Solow Realty and Mr. Dreier. Joel Miller, Dechert's lawyer at Miller & Wrubel, at the hearing last week said there "is nothing that says that Dechert cannot deal with one client or the other client."

Here are the minutes from the case.

Full post as published by New York Attorney Malpractice Blog on June 17, 2010 (boomark / email).