A plaque is displayed at the entrance of the U.S. District Bankruptcy Court for the Southern District of New York. REUTERS/Brendan McDermid

UnitedLex, LeClairRyan must face trustee’s lawsuit

(Reuters) – A chapter choose in Richmond, Virginia on Wednesday gave the Chapter 7 trustee overseeing the dissolution of defunct regulation agency LeClairRyan the inexperienced mild to sue a co-founder of the agency and various authorized providers supplier UnitedLex Corp.

U.S. Chapter Decide Kevin Huennekens denied bids by UnitedLex and LeClairRyan co-founder Gary LeClair to dismiss up to date claims filed in August by Chapter 7 trustee Lynn Tavenner.

Tavenner alleges {that a} 2018 three way partnership between LeClairRyan and UnitedLex added extra debt to the struggling regulation agency whereas improperly handing UnitedLex management over LeClairRyan’s operations and its mental property.

She additionally claims LeClair improperly enriched himself previous to his agency’s 2019 collapse by way of his place as its longtime chairman. Her criticism described LeClairRyan as a “Ponzi scheme” that used capital contributions from new lateral hires to pay out legacy shareholders.

Each UnitedLex and LeClair have denied Tavenner’s claims.

In Wednesday’s 28-page ruling, Huennekens stated Tavenner had sufficiently pleaded her claims, and he rejected the defendants’ rivalry that the trustee’s amended criticism reintroduced conspiracy claims that he had already dismissed in a July ruling. Huennekens stated he didn’t dismiss these claims altogether, opposite to what the defendants had argued.

“The defendants’ argument that the trustee is resurrecting old claims or violating the law of the case is without merit,” he wrote.

Huennekens’ ruling comes just a little greater than two weeks after he heard oral arguments over the defendants’ motions.

Attorneys representing Tavenner, LeClair and UnitedLex entities didn’t reply to requests for remark.

The case is Lynn Tavenner, as Chapter 7 Trustee v. ULX Companions LLC, U.S. Chapter Courtroom for the Japanese District of Virginia, Adversary Continuing No. 20-03124.

For Lynn Tavenner: Erika Morabito and Brittany Nelson of Quinn Emanuel Urquhart & Sullivan

For UnitedLex Corp: J. Gregory Milmoe, David Barger and Thomas McKee of Greenberg Traurig

For Gary LeClair: Andrew Bowman and Scott Sexton of Gentry Locke; and William Broscious

Learn extra:

UnitedLex, LeClairRyan founder ask choose to toss trustee’s lawsuit

LeClairRyan founder blasts claims he helped tank regulation agency

David Thomas

David Thomas experiences on the enterprise of regulation, together with regulation agency technique, hiring, mergers and litigation. He’s primarily based out of Chicago. He may be reached at [email protected] and on Twitter @DaveThomas5150.