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

  • Bankruptcy judge keeps all of Chapter 7 trustee’s claims intact
  • UnitedLex, Gary LeClair face allegations over 2018 joint venture, firm collapse

(Reuters) – A bankruptcy judge in Richmond, Virginia on Wednesday gave the Chapter 7 trustee overseeing the dissolution of defunct law firm LeClairRyan the green light to sue a co-founder of the firm and alternative legal services provider UnitedLex Corp.

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

Tavenner alleges that a 2018 joint venture between LeClairRyan and UnitedLex added more debt to the struggling law firm while improperly handing UnitedLex control over LeClairRyan’s operations and its intellectual property.

She also claims LeClair improperly enriched himself prior to his firm’s 2019 collapse through his position as its longtime chairman. Her complaint described LeClairRyan as a “Ponzi scheme” that used capital contributions from new lateral hires to pay out legacy shareholders.

Both UnitedLex and LeClair have denied Tavenner’s claims.

In Wednesday’s 28-page ruling, Huennekens said Tavenner had sufficiently pleaded her claims, and he rejected the defendants’ contention that the trustee’s amended complaint reintroduced conspiracy claims that he had already…

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