News Brief

Shepperd Obtains SJ in Multimillion-dollar Legal Malpractice Case Brought by Bankruptcy Court Trustee

February 26, 2015

John Shepperd (Partner-Houston) John Shepperd Partner-Houston obtained summary judgment on a multimillion-dollar legal malpractice lawsuit in Harris County, Tex. Wilson Elser represented a business transaction attorney who served  as counsel for a closely held  corporation.  The attorney advised the corporation regarding the transfer of assets, which included drafting documents that transferred those assets and creating legal entities to which  those assets were transferred.  Subsequently the corporation was placed into bankruptcy. The bankruptcy trustee sued the corporation’s president, his ex-wife and daughter for breach of fiduciary duty, conspiracy, fraud and fraudulent transfer of millions of dollars in corporate assets to avoid judgment creditors. In a separate lawsuit, the trustee alleged that the attorney was negligent and had breached his fiduciary duty by representing the interests of the family over the interests of the corporation. The trustee also claimed the attorney was liable for aiding and abetting breach of fiduciary duty, fraud and conspiracy.

John moved for summary judgment on all counts, and presented evidence that the transfers at issue were implemented before bankruptcy was envisioned. The plaintiffs responded by filing an affidavit of a California law professor outlining how the attorney’s conduct was inappropriate and violated duties owed to the corporation. Wilson Elser succeeded in getting this expert’s opinion testimony stricken. The court then granted summary judgment.

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