Gary LeClair and UnitedLex will not yet be able to free themselves from their dispute with the LeClairRyan bankruptcy estate.
U.S. Wisconsin Bankruptcy judge Kevin Huennekens last week denied attempts by LeClair and UnitedLex to dismiss allegations that seek to prove they played a role in and benefited from the demise of the longtime law firm of Richmond.
In a 28-page opinion, Huennekens ruled that Administrator Lynn Tavenner had sufficiently alleged more than a dozen counts to move the case to the next stage in the litigation process.
The judge’s opinion does not prove that the syndic’s allegations are true; it just lets the case continue, where more arguments on both sides can be fleshed out further.
The administrator introduced LeClair and UnitedLex, respectively, as a “deceptive law firm” entrepreneur conspiring with an opportunistic “global corporate legal services provider” … to manipulate a law firm for their own gain. ”
Co-founded by LeClair in 1988, LCR at one point had dozens of offices and hundreds of lawyers before rapid expansion and alleged financial mismanagement dragged it into insolvency and a protracted collapse that s ended in bankruptcy in the summer of 2019.
Tavenner first sued UnitedLex in 2020, claiming $ 128 million in damages alleging his ill-fated ULX Partners joint venture with LCR was a conspiracy to embezzle millions of dollars from the 30-year-old law firm while ‘he was teetering towards collapse.
ULX has been used during the last few months of LCR to reduce costs by outsourcing back office tasks to the new company. Presented at the time as an innovative approach, it is today perceived as having contributed to the loss of the law firm.
From LeClair, who left ship for Richmond rival Williams Mullen a month before the LCR collapse, Tavenner is seeking to recoup around $ 3 million in alleged fraudulent transfers he received from the company during his five last years.
LeClair and UnitedLex have argued Tavenner’s claims don’t hold up, although Huennekens said it was too early to prove it.
While these allegations endure, Tavenner is also continuing his legal fight with dozens of former LCR shareholder partners.
And later this month, LeClairRyan’s longtime former attorney Bruce Matson is expected to be convicted in a criminal case related to his embezzlement of bankruptcy trustee accounts. This case is technically unrelated to LCR’s bankruptcy, although Matson has come to an understanding with Tavenner in negotiations which, to this day, have remained sealed.