With a trial looming in April, an ongoing dispute tied to the LeClairRyan bankruptcy will first get a chance to be resolved outside the courtroom.
The trustee overseeing the collapsed law firm’s bankruptcy estate is headed to mediation with legal services giant UnitedLex and other defendants as part of the continued bid for another potential cash haul for creditors.
The mediation will include trustee Lynn Tavenner, who has handled the LeClairRyan estate since its dissolution in 2019, along with defendants UnitedLex and ULX Partners. The latter is the ill-fated joint venture formed by UnitedLex and LCR in 2019.
ULX was a back-office job outsourcing effort billed at the time as an innovative cost-cutting approach, but is now seen as having had a hand in the law firm’s undoing. Tavenner has alleged that ULX was a conspiracy to siphon millions out of the 30-year-old law firm as it was teetering toward collapse. She sued UnitedLex in 2020, seeking $128 million in damages.
UnitedLex had called for the case to be dismissed, but bankruptcy court Judge Kevin Huennekens allowed it to proceed toward trial.
The mediation will seek to avoid that trial, which has been set for April 20 at Richmond’s federal courthouse.
Huennekens made the mediation order on Feb. 4, requiring it to be concluded by no later than March 7. In addition to Tavenner and UnitedLex, the judge ordered UnitedLex CEO Daniel Reed and CFO Nicholas Hinton to participate in the mediation. Travelers Insurance Co. also is required to attend.
Reed and Hinton are party to separate litigation filed by Tavenner, and Travelers is the keeper of insurance coverage that could potentially be a payout source to creditors in the UnitedLex dispute.
Overseeing the mediation is Frank Santoro, a seasoned bankruptcy judge from Hampton Roads.
UnitedLex is represented in the case by a team of Greenberg Traurig attorneys: David Barger, Thomas McKee Jr. and Gregory Milmoe. Tavenner is represented by Quinn Emanuel attorneys Erika Morabito and Brittany Nelson.
LeClairRyan namesake and longtime CEO Gary LeClair had been a defendant in the UnitedLex case as well but was released from the matter after reaching a $10 million settlement with the estate in late 2021. Other former LCR insiders were also part of the settlement, which was funded by insurance proceeds.