|By PR Newswire||
|March 25, 2014 03:03 PM EDT||
LOS ANGELES, March 25, 2014 /PRNewswire/ -- On Monday, March 24, 2014, the United States Court of Appeals for the Ninth Circuit issued its decision reversing the District Court's dismissal of a $100 million lawsuit against the international law firm Bryan Cave, LLP.
Trustees for the bankruptcy estate of two real estate mortgage companies, Estate Financial Inc. and its funding company Estate Financial Mortgage Fund LLC, brought the lawsuits. The suits allege that Bryan Cave committed malpractice and breached its fiduciary duty in advising the debtors on how to conduct their business operations in light of allegations of violations of complex real estate and securities laws. The unpublished decision reversed the District Court's determination that the doctrine of "in pari delicto" ("in equal fault") precluded the trustees from pursuing their claims against Bryan Cave on the merits.
Larry W. Gabriel and Corey R. Weber of Ezra Brutzkus Gubner LLP (Los Angeles, CA), lawyers for Estate Financial Inc.'s chapter 11 trustee, Thomas P. Jeremiassen, noted that in reinstating the suits, the Ninth Circuit did not address whether the equitable doctrine of in pari delicto applies to state law claims brought by bankruptcy trustees. The issue has been the subject of much legal debate.
"We are very pleased with the decision by the Ninth Circuit today reinstating the trustees' claims against Bryan Cave. Although briefed and argued, the Ninth Circuit did not address whether the doctrine of in pari delicto applies to bankruptcy trustees. That issue will apparently be left for another day," says Corey R. Weber, Partner at Ezra Brutzkus Gubner LLP.
Based upon this decision by the Ninth Circuit, Jeremiassen v. Bryan Cave LLP and Sharp v. Bryan Cave LLP will return to the trial court for further proceedings.
SOURCE Ezra Brutzkus Gubner LLP