Earlier today, we reminded you that litigation boutiques are eager to join the associate salary wars of 2018. But not everybody has that kind of flow. Some litigation boutiques are just fighting to stay alive.
Such is the case with Conrad & Scherer. Readers as old as me might recognize Conrad & Scherer because William Scherer was prominent in the Bush v. Gore litigation, helping George W. Bush win his Supreme Court election.
I had a mental dartboard of all the Bush lawyers. Ted Olson got himself off of it by fighting for gay rights. Once upon a time, Scherer made some strong moves to make lefties not hate him too. The firm took down Scott Rothstein, an alleged Ponzi schemer. And it went after Chiquita Brands in civil litigation over the company’s alleged human rights violations in other countries.
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The Chiquita litigation turned out to be deeply problematic. Allegations were that evidence and testimony were manufactured against the company.
But what really seems to have the company in trouble is the breach of a loan agreement. Douglas Von Allmen says that he loaned the law firm $20 million dollars to pursue its litigation against Rothstein, Chiquita, and others. Von Allmen says the firm didn’t pay him back. Last week, a court granted summary judgment for Von Allmen. From the Daily Business Review:
Von Allmen filed suit in 2017 alleging he loaned millions to the firm to fund litigation against convicted Ponzi schemer and former law firm chairman Scott Rothstein and to launch a national human rights practice. He asked the court to enter judgement for breach of promissory notes, breach of guaranty and to enforce a security agreement.
Von Allmen also claimed his loan funded human rights cases against multinational companies — a venture that has brought negative attention to the firm. Former Conrad & Scherer partner Terrence Collingsworth allegedly paid witnesses to change their testimony in a case accusing Alabama coal conglomerate Drummond Co. of conspiring to kill labor activists in Colombia.
If Von Allmen gets what he wants — including interest, attorney fees and court costs — the judgment could reach $25 million.
Conrad & Scherer lawyers say the firm is “well capitalized” and will go on, regardless of the final judgment.
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But Von Allmen’s attorney, Jonathan Feldman, is now asking to put the firm in receivership. “We have a security interest in all the firm’s account receivables… When we enforce that security interest, the firm is not going to have the availability to fund day-to-day operations,” said Feldman.
To me, this answers the question of “why doesn’t everybody start their own firm.” Sure, being a junior Biglaw partner kind of sucks (“sucks” as #MillionaireFirstWorldProblems go). But at least you have confidence that your firm is going to be there (apologies to former Dewey people). In the litigation boutique world, one or two mistakes, and you’re done.
But hey, George W. Bush is no longer the worst president in American history, so Scherer’s legacy isn’t all bad.
Conrad & Scherer Loses Case Over Loan; Plaintiff Plans to Ask Court to Appoint Receiver for the Firm [Daily Business Review]
Elie Mystal is the Executive Editor of Above the Law and the Legal Editor for More Perfect. He can be reached @ElieNYC on Twitter, or at [email protected]. He will resist.