It wasn't a good weekend for Snell & Wilmer partner Patrick Byrne. Allegations that Mr. Byrne participated in a "fraudulent scheme" hit the news and the press reported that Byrne and S&W is being sued for legal malpractice, breach of contract, breach of fiduciary duty and other civil matters.The Review-Journal reports:
The receiver for Southwest Exchange, the Henderson-based financial company that collapsed in 2007 owing $98 million to 130 real estate investors, is suing regional law firm Snell & Wilmer and accusing the law firm's managing partner in Las Vegas of participating in a fraudulent scheme.
Attorney Steve Morris, who represents Snell & Wilmer, denied the allegations. "The allegations contained in the complaint are false and are not based on the facts," Morris said in a statement. "The complaint is nothing more than a litigation tactic intended to pressure the firm and its partner, Patrick Byrne, into settling claims that simply do not exist."
The article details how Byrne [allegedly] loaned millions of dollars to the owners and operators of Southwest Exchange in exchange for stock and airline flights, failed to disclose to one officer of the company that he was representing another officer of the company, and that Snell & Wilmer "failed to incorporate a provision of Nevada statutes that states that it is a felony for Southwest Exchange to transfer or commingle client money without written consent of the client".
Okay, there's no way to make mortgage financing schemes sexy, even with alleged fraud, but the allegations that Byrne was personally bailing out his client through multi-million dollar loans makes this case one to watch.
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