“If used responsibly, which was not the case at my former agency, litigation financing is a unbelievable software to extend entry to justice.” Ex-Pierce Bainbridge Companion Don Lewis, Forbes, August 2, 2019.
(That is the second installment of what LawFuel intends to be an ongoing collection on the seeming monetary dealings at Pierce Bainbridge. The primary installment was “The $65 Million Debacle – Pierce Bainbridge Meets American Greed”.)
Dan Garner* The story of the unravelling legislation agency Pierce Bainbridge Beck Value & Hecht LLP seems to be one in every of suggesting severe misdealings and greed. The agency and plenty of of its former and present companions are in dire straits. A seasoned New York Metropolis legal professional warned Pierce Bainbridge founder John Mark Pierce in September 2018: “[John] you’ve an unsustainable enterprise mannequin. . .Making an attempt to do what you might be doing – construct a serious NYC agency in a single day is massively dangerous . . .The final one who tried it in NY was Mark Dreier. He ended up in jail.” With every passing day, that legal professional’s warning more and more seems to be prophetic.
Whereas Pierce Bainbridge has boasted high-profile clientele corresponding to Rudy Giuliani, Tulsi Gabbard, a Russian Oligarch, Michael Avenatti, Carter Web page, George Papadopoulos, Joan Dangerfield (Rodney Dangerfield’s spouse) and CNN’s Don Lemon, the agency has confirmed to be unsustainable; it’s imploding in spectacular and catastrophic style. The bombastic and hyperbolic Pierce declared to a shopper in March 2019 that the agency consisted of “70 of essentially the most elite litigators on the planet.” Somewhat over a 12 months later, the variety of Pierce Bainbridge attorneys is within the single digits, Pierce Bainbridge is a defendant in at the very least six lawsuits, three of them introduced by money advance lenders. Regulation360 says Pierce Bainbridge owes litigation funder Virage Capital Administration an “estimated $65 million.”
The beforehand talked about NYC legal professional was not the one one with obvious foresight. In Might 2019, ex-partner Don Lewis filed a criticism in opposition to the agency and his former companions – a draft was offered on March 26, 2019. Lewis says he blew the whistle on monetary misconduct and Pierce Bainbridge retaliated by weaponizing #MeToo. The ex-partner has insisted for over a 12 months that it was an orchestrated ambush to cover-up monetary malfeasance. Littler Mendelson (S. Jeanine Conley) and Putney Twombly Corridor & Hirson LLP (Michael D. Yim) are alleged to have joined within the assault and are additionally defendants in lawsuits introduced by Lewis.
Among the many severe allegations from Lewis a 12 months in the past -.
“The opening of the PB’s books, would very seemingly reveal that Pierce is a fraud and a con man, mendacity to his companions, mendacity to the press, mendacity to his shoppers and mendacity to buyers; it might additionally very seemingly crater a agency constructed on smoke and mirrors.” ~ Don Lewis Criticism, Might 16, 2019.
“[John] Pierce. . .has scammed the litigation finance business by way of huge deceit. ~ Don Lewis Criticism, Might 16, 2019.
The story of Pierce Bainbridge and litigation finance is a sordid one. The issues started in earnest on Might 6, 2018; Lewis has said: “The Pierce Bainbridge legislation agency was constructed on a lie.”
The $1,000,000,000.00 Misinform Pravati Capital LLC
Based on Lewis, a memo offered to litigation funder Pravati Capital LLC by name-partners John Pierce and Carolynn Ok. Beck (no longer with the firm) claimed a case in opposition to Microsoft had “potential damages of as much as $1 Billion.” The case was associated to the Gears of Warfare online game; it was dated Might 6, 2018. Pierce apparently did not open up to Pravati the evaluation of a Philadelphia lawyer who had dealt with the case for the prior sixteen months.
Based on a just lately filed criticism, on March 26, 2018 – over a month earlier than the Might 6 memo – the Philly lawyer shared a remarkable letter with Pierce, during which the lawyer suggested the shopper of his view that the Gears of Warfare case had a price of lower than $900,000. Pierce Bainbridge allegedly did not disclose the letter to Pravati.
The “Billion Greenback Lie” seems to have served because the lighter gas for Pierce Bainbridge’s “explosive progress.” Whereas Pravati had beforehand offered modest sums, on the heels of the Billion Greenback Lie, Pravati proceeded to ship in bushels of money within the tens of millions. That is obvious from just lately leaked paperwork regarding a Pierce Bainbridge-related litigation fund, Talon LF, during which Pierce, ex-United States Managing Companion Douglas Curran (BraunHagey & Borden) and ex-partner Thomas D. Warren (Warren Terzian) are listed as affiliated people. As LawFuel has beforehand reported, the accompanying investor solicitation supplies appear to comprise deceptive statements in regards to the Pierce Bainbridge litigation monitor document.
The Pravati tens of millions had been then used to begin a large hiring spree; simply two months after the Billion Greenback Lie, on July 10, 2018, Pierce Bainbridge issued a press launch touting the agency’s “explosive progress.” In September 2018, the presiding Honorable Anita B. Brody of the US District Courtroom for the Japanese District of Pennsylvania, said throughout a listening to that she “hadn’t seen something” indicating the Pierce Bainbridge had a “scintilla of a case.” A 12 months later, in September 2019, the “Billion Greenback Lie” case was thrown out earlier than trial. Zero financial restoration; Pierce Bainbridge has appealed.
The $9.1 Million Pravati Default
Based on the Talon supplies, Pravati made a $eight,250,000 funding over round sixteen months. Throughout that point, the litigation-only agency had just one trial victory. The online verdict was $500,000, divided 3 ways – Pravati, Pierce Bainbridge, shoppers. In March 2019, Pravati declared a $9,157,072.95 default. The people pictured under seem on UCC filings as “particular person” debtors “accountable for the complete stability because of Pravati” for the $9.1 million default on the “funding settlement between Pierce Bainbridge Beck Value & Hecht LLP and Pravati Capital.”
The debt was apparently finally paid off; it stays unclear how this was completed. It could have been with funds from Virage Capital or, as alleged by a former shopper of Pierce Bainbridge, the cash could have come from bribes from unsavory characters.
The shopper, the President of Greenway Vitamins, reported Pierce and Pierce Bainbridge to the California State Bar; the criticism was just lately bounced however the accompanying letter from the California Bar states: “With respect to the extra allegation that the legal professional has taken bribes or is engaged in legal exercise, chances are you’ll contact legislation enforcement.” The underlying matter was dealt with by Pierce and ex-firm accomplice Jonathan Sorkowitz.
Regardless of the case could also be, whereas Pravati seems to have been made financially complete, it apparently was not accomplished so within the “ordinary course” of enterprise as Pierce said in Bloomberg Large Enterprise Regulation on the time.
It seems, nevertheless, that Pravati didn’t escape the Pierce Bainbridge vortex unscathed. As the results of the litigation funder’s obvious belief in John Pierce – who e-mailed Pravati CEO Alexander Chucri in 2018 “I’m extra loyal than a Navy Seal” – Pravati, like Littler Mendelson, Putney Twombly, and a slew of the ex-Pierce Bainbridge companions, finds itself as a defendant in a lawsuit. Regulation360 coated the criticism in an article titled “With Pierce Chief on Leave, New Suit Claims Funding Antics”.
Pravati has additionally suffered the misfortune of the general public disclosure of a funding settlement with Pierce Bainbridge; the settlement is hooked up as an exhibit to the lawsuit. Pierce apparently eviscerated any confidentiality throughout his dealings with the Philly lawyer. This resulted in further embarrassment for Pravati, as a subsequent Regulation 360 article analyzing the settlement is titled: “Pierce Bainbridge Funding Deal Raises Ethical Red Flags.”
The $65 Million Debt to Virage Capital
The scenario with Pravati pales compared to what seems to be the horrific determination of Virage Capital to get in mattress with Pierce Bainbridge. As reported by Regulation360 – “Pierce Bainbridge Funder Targets Ex-Partners in Debt Chase” – after getting concerned with Pierce Bainbridge for simply round one 12 months, Virage is owed an “estimated $65 million.” Through the course of the 12 months, Pierce Bainbridge (i) received zero trials; (ii) was discovered by two judges to have violated the moral Guidelines of Skilled Conduct; (iii) misplaced round 60 attorneys with just a few remaining; (iv) grew to become a defendant in at the very least six lawsuits involving allegations of economic foul play; (v) secured three money advances which every resulted in a lawsuit and (vi) in line with the American Lawyer – “Pierce Bainbridge Leader John Pierce Is On Leave Amid Financing Questions” – Pierce was positioned on a compelled go away of absence by his companions for securing a pay day mortgage.
Certainly, three obvious questions come to thoughts. The first, what may have possessed Virage to sink a $65 million curiosity right into a agency with just about no monitor document of success and a previous $9.1 million declared default? The second, what grew to become of the huge Virage funding; said otherwise, the place is the cash? The third, with the legal professional ranks of Pierce Bainbridge having been gutted, and Pierce claiming to be the only fairness accomplice, does Virage have any likelihood of ever being made complete?
Is a Large Virage Lawsuit within the Playing cards?
As famous, Pravati has been sued, a slew of John Pierce’s former companions have been sued, John Pierce and the agency have been sued at the very least six occasions, and now the historically litigious Virage has reportedly beginning “chasing” ex-Pierce Bainbridge companions at their new corporations. This seemingly contains Armstrong Teasedale (Eric Creizman, Caroline Polisi and Melissa Madrigal), Bathaee Dunne (Yavar Bathaee and Brian Dunne) BraunHagey & Borden (Douglas Curran, Franklin Velie and Jonathan Kortmansky), Hecht Companions (David Hecht), Khan Regulation USA (Amman Khan), Warren Terzian (Tom Warren and Dan Terizan) and Withers Bergman (Christopher N. LaVigne.) Excluding the Bathaee Dunne duo, Franklin Velie and Dan Terzian, all of those listed people are already defendants or proposed defendants (Kortmansky and Warren) within the lawsuits filed in by Lewis.
Moreover, the monetary and common mess has already induced obvious extreme points for Bathaee Dunne and a proposed class of plaintiffs. A Regulation360 report final week – “Southwest, Boeing Fight Pierce Bainbridge Withdrawal Bid” – in addition to associated “should learn” motions filed by Bathaee Dunne and Southwest, seize the disturbing and dysfunctional scene.
One wonders when these corporations grew to become conscious of the chance that they too would probably be impacted by what seems to be the curse of enterprise dealings with John Mark Pierce. Time will inform, however it might appear huge lawsuit from Virage is sort of inevitable at this level.
Quinn Emmanuel or Dreier LLP?
Pierce made the above proclamation in 2018. Like clockwork, the information illustrate that Pierce was as soon as once more spouting, in his personal phrases to the American Lawyer, “total fake news.”
The shadow of the case of convicted felon Marc Dreier has been raised in respect of John Pierce’s as far as the varied monetary dealings with litigation finance business operators is worried. Civil lawsuits have begun piling up and simply how the remainder of the legislation firm-and-litigation finance drama performs out stays to be seen.