The trustee overseeing the bankruptcy liquidation of toppled Richmond law firm LeClairRyan has brought in some hired guns.
Foley & Lardner, a major law firm based in Milwaukee, last month was enlisted as so-called special counsel to help trustee Lynn Tavenner potentially pursue litigation as a means of reclaiming money for LeClairRyan’s creditors.
Tavenner, of Richmond law firm Tavenner & Beran, received court approval in February to retain Foley & Lardner, “specifically to investigate and pursue certain litigation claims,” according to recent filings in the case.
“The trustee believes that these potential litigation claims may be of substantial value but requires the assistance of counsel to assist in her investigation, evaluation, and, if necessary, pursuit of such claims.”
The filings state that potential litigation could relate to “fraudulent transfers, excessive compensation, breaches of fiduciary duty and/or unjust enrichment.”
Observers leading up to and in the wake of the fall of LeClairRyan pointed to excessive compensation paid to some of the firm’s higher-ups as having a hand in the 30-year-old firm’s downfall.
LCR fell into bankruptcy last September after its leaders decided to dissolve the firm amid a mass exodus of lawyers and related declining revenues. Filings last year showed the firm owed $58 million to hundreds of creditors.
Foley & Lardner will be compensated for its work in two ways. The initial investigative phase of its work calls for an hourly rate. That includes a range for attorneys of $355 to $1,250 per hour, $60 to $320 for paralegals, and $1,050 an hour for a lead attorney, according to its agreement with the trustee.
Should its work result in litigation, that phase would trigger a contingency fee structure, by which the firm would receive 30 percent of money recovered through litigation.
The agreement also calls for an initial advance of $25,000, plus expenses, as well as a $50,000 fee upon completion of the overall bankruptcy case.
Foley & Lardner’s Erika Morabito is now listed as representing Tavenner.