Biglaw

MoFo Faces Overbilling Lawsuit Alleging 'A Billing Feeding Frenzy'

Just what the Biglaw firm needs.

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Between the pregnancy discrimination lawsuit and the internal investigation, facing another high profile dispute is probably the last thing that MoFo wants right now, but well, here we are.

On Wednesday a lawsuit was filed in the U.S. District Court for the Western District of Texas against Morrison & Foerster by plaintiffs which include Synergies Corp., AVD Trading, FireStar Group LLC, Firestar Diamond International and owner, jewelry designer Nirav Modi. Plaintiffs allege the Biglaw firm was hired to wind down the entities, but billing quickly got out of hand:

“MoFo then expended an exorbitant and excessive amount of time, primarily on matters that had little to do with winding down the entities. In the course of two months, MoFo had 34 different timekeepers bill 669 hours at a cost of $484,321.39,” the plaintiffs allege in the complaint.

The complaint also says while the firm had arranged for $625,319 to be paid to its trust account, it also “unilaterally decided to pay itself from these funds—although this was never authorized. This left $170,978 in the trust account.”

As reported by Law.com, plaintiffs are also alleging that MoFo missed claims the plaintiffs could have asserted — to the tune of $17 million:

The plaintiffs allege the representation should have been a “straight-forward assignment,” and the lawyers should have filed certificates of dissolution in Delaware, reviewed the clients’ financial statements and prepared general ledger or balance sheets for the companies. Because they did not do those things, the plaintiffs allege, Morrison & Foerster “completely missed $17 million in claims that plaintiffs could have asserted in a bankruptcy action.” They allege that counsel they hired after firing Morrison & Foerster did assert the claims.

The complaint alleges causes of action for breach of fiduciary duty, negligence, fraud, breach of contract and theft. MoFo has not yet responded to the allegations.

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headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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