Legal Malpractice

Financial Downturn and Fraud Coupled with Legal Malpractice

By (Andrew Lavoott Bluestone)

The question of whether legal malpractice litigation is tied to [and affected by] downturns in the financial and economic worlds is often asked.  Our answer is that legal malpractice litigation is apt to come up in every situation where attorneys are present. 

The Drier episode, punctuated by fraud, crimes and large money numbers is a prime example.  In this NYLJ article by Nate Raymond we see that opinion letters assuring some aspect of a transaction, issued by attorneys, are now the subject of a legal malpractice case.  From the article:

"Fortress Investment Group LLC filed suit against Ruskin Moscou Faltischek on Tuesday for allegedly issuing "utterly false" legal opinion letters used by ex-lawyer Marc S. Dreier, who is now in prison for his role in a massive Ponzi scheme.

In a complaint filed in Manhattan Supreme Court, Fortress claims the Uniondale-based law firm issued three letters that Mr. Dreier used to defraud the investment firm out of $50 million. The suit against Ruskin Moscou follows one filed by Fortress in December against Dechert that made similar allegations.

The Ruskin opinion letters, issued in 2006 and 2007, stated that the firm was "special transaction counsel" to companies controlled by real estate developer Sheldon Solow. But Fortress said Ruskin Moscou never checked with anyone working for Mr. Solow's companies to confirm the relationship between the firm and Solow. Loan documents that Ruskin Moscou in its letters claimed to have been "duly executed and delivered" by the real estate companies had been forged by Mr. Dreier, the complaint said.

"We believe the suit is baseless and look forward to complete vindication through the judicial process," Barbara Cerrone, a spokeswoman for Ruskin Moscou, said in a statement."

Full post as published by New York Attorney Malpractice Blog on July 22, 2010 (boomark / email).