Butler Snow asked a federal judge to dismiss a receiver's complaint against the firm in the Lamar Adams case. The Ridgeland law firm issued the following press release:
Today, we filed a motion to compel arbitration of the claims brought by the Receiver, Alysson Mills, pursuant to a written arbitration agreement. Many of the claims made in the Complaint infer that we were deeply involved with Adams. These claims are simply not true. Adams hired us once in 2009 and once in 2012. We were asked to draft documents for a proposed timber investment fund, not at all like Adams’ Ponzi scheme which we understand was based on loans secured by deeds on specific tracts of timber. Adams made the decision not to use the proposed fund and no investments were made in that fund. The firm was paid a total of $28,428.92 for both engagements, the last of which ended in 2013.The Lord Snow defendants submitted a motion to dismiss and a supporting memorandum to U.S. District Judge Carlton Reeves yesterday that fired a creeping barrage of arbitration clause arguments at the Receiver. The engagement contract between Butler Snow Advisory Services Division and Lamar Adams contained an arbitration clause:
In 2012, Adams also retained the firm’s subsidiary, BSAS, to provide business advisory services. BSAS had a short-term relationship with Adams (17 months) which also ended in 2013. The total revenue BSAS received was $99,250.00, the majority of which was generated through a monthly retainer and unrelated to any specific transactions.
From day one, we have cooperated with the Receiver and other authorities, sharing all information requested. We remain concerned for the victims of Adams’ fraud who lost money, including some of our own attorneys and their families.
In the event there is an unresolved legal dispute between the parties and/or any of their respective officers, directors, partners, employees, agents, affiliates or other representatives that involves legal rights or remedies arising from this engagement or any other agreement between you [Adams and Madison Timber Company] and [BSAS] and any of its affiliates, the parties agree to submit their dispute to binding arbitration under the authority of the Federal Arbitration Act.Butler Snow asked the Court to stay or dismiss the proceedings and order the parties to proceed to arbitration even though it is the Receiver who is suing Butler Snow. No worry, Lord Snow has that covered:
Put simply, the receiver “stands in the shoes” of the persons or entities subject to the receivership; their agreements to arbitrate become the receiver’s agreements....
The Receiver stands in the shoes of Arthur Lamar Adams, who signed the Engagement Contract with BSAS. The Receiver is bound by that agreement because Adams is bound by it. Adams was BSAS’s client under the Engagement Contract. The “Standard Terms and Conditions” made clear in its first paragraph that “you” and “your” as used throughout the agreement referred to “Madison Timber Company, Inc. and/or A. Lamar Adams.”...
All rights and obligations in the Engagement Contract belonged to Adams, and now belong to the Receiver who stands in Adams’ shoes. Moreover, the Receiver is required to arbitrate on behalf of all entities for which she is Receiver. Throughout the Complaint, the Receiver expressly conflates Madison Timber Company and Madison Timber Properties, treating them as a single entity. Complaint at p. 2. Every allegation made regarding “Madison Timber” applies to both.
The defendants have yet to file an answer to the complaint. Attorneys Ed Blackmon, Bradford Blackmon, Alan Perry, and Simon Bailey represent Butler Snow.
Synopsis of Case
Receiver Alysson Mills sued Butler Snow, Butler Snow Business Advisory Division President Matt Thornton, and Baker Donelson in U.S. District Court on December 19, 2018 to recover commissions paid to them in the Lamar Adams timber fraud case. The complaint charges employees at both law firms worked with Lamar Adams to sell phony timber investments to firm clients.
The SEC accused Lamar Adams of operating a Ponzi scheme that defrauded 150 investors out of more than $85 million since 2005, in a lawsuit filed in U.S. District Court on April 20. The SEC said Adams sold bogus timber rights, deeds, and promissory notes guaranteeing 13% interest rates. Mr. Adams pleaded guilty in U.S. District Court to one count of wire fraud. The Justice Department said in that case Adams defrauded 320 investors of more than $164 million. The Court sentenced Adams to serve 235 months in prison
U.S. District Judge Carlton Reeves appointed attorney Alysson Mills to be the receiver in the case. She will recover assets, distribute them among the victims, and provide progress reports to the court. Mills sued to recover over $16 million in commissions from several "promoters". The promoters allegedly helped Adams sell his phony timber investments to unsuspecting investors. The defendants are Michael Billings, William McHenry, and Terry Kelly as well as companies they own. She has recovered over $2 million. However, Ms. Mills stated in her bi-monthly report that she was seeking commission repayments from ten unnamed parties.
The complaint states Adams and Pinnacle Trust formed the Madison Timber Fund, LLC. It sought to raise $10 million through the sale of 100 shares at a share price of $100,000. Butler Snow lawyers worked with Adams on the PPM. However, the PPM did not attract any investors.
Butler Snow created an Advisory Services division that would provide “non-legal business advice” in 2011. Mike Billings joined Lord Snow in 2012 as a “strategic advisor.” Ms. Mills said Billings gave strategic advice to Madison Timber as the company sought to raise $30-$50 million. Thornton allegedly "alerted" senior partners Don and Barry Cannada about the new business. Adams paid BSAS $3,500 per month for 17 months. Thornton and Billings looked for clients to purchase timber shares. They created a list of over thirty local individuals and families as prospects. Many people on the list purchased the phony timber shares.
The complaint stated Lord Snow lawyers created a PPM in February 2013 that sought to raise $100 million by selling $1,000 shares at a price of $100,000 per share. Lord Snow moved up from local yokels and began to pitch the shares to larger, institutional investors. Unfortunately (sarcasm) for Team Thornton, the PPM fell flat but there was a timber lining in the cloud of failure as many of the prospects invested in “standing tracts” of timber land. Adams delivered commission checks for each sale to Lord Snow.
The Receiver accused Butler Snow, Billings, and Thornton, of acting as "unlicensed brokers, in violation of state and federal law." No one ever registered with the SEC as the promissory notes were sold and commission checks were delivered. Ms. Mills aimed her complaint squarely at Barry Cannada:
Butler Snow knew or should have known what it was doing was unlawful. Among the notes in Butler Snow’s Madison Timber files is this comment from Don Cannada in 2009: “Very broad definition of what a broker is . . . Includes one who for a commission procures a purchaser or prospect etc. See 73-35-31 for penalties. Says you can’t pay an unlicensed broker, but doesn’t provide any penalty if you do so.”
Billings was making so much money off of the timber scheme that he left Lord Snow in December 2013 and began working directly for Lamar Adams. Adams stopped paying the $3,500 monthly retainer fee to Lord Snow. However, Adams engaged Lord Snow to assist him in other projects such as the Oxford Springs development in North Mississippi. The complaint makes it clear that Adams enjoyed the full range of Lord Snow’s diverse offerings: legal services, business advice, and lobbying. Butler Snow, in true Shylock fashion, continued to bill Adams for services rendered after he was caught. Lord Snow finally terminated the relationship on May 11 – two days after he pleaded guilty and 11 days after he was indicted.
The defendants have not yet responded to the complaint nor challenged the allegations.
48 comments:
There's an old saying that originates in English Common Law: "In for a Penny, in for a Pound" . The legal principal is that the penalty for owing a little is the same for owing a lot.
Snow's response won't scare Alysson, and it won't carry any water. The precedent here has been set by the Bernie Madoff case. The receiver there has clawed back nearly $14 billion of the $17 billion of principal invested.
Everyone who even sniffed that money had to pay up. Even the banks that he moved it around through were found to be complicit. There was even talk that some banks asked Lamar to take his business elsewhere because they smelled a rat.
So didnt he end up setting in at the River Hills Bank? William Gage, who owns that bank along with his brother Robert, is a partner at....wait for it....Butler Snow!
Wake up gentlemen. The bell tolls for you.
Arbitration is 99% not appealable
BS rolling dice on one persons findings.
Insurer and reinsurer are now sweating bullets
BS just went all in with what I think is a pair of 2s
Buckle up
What a BS response from BS. Lamar Adams is a cooperating witness. BS is not mentioning layer after layer of due diligence demanded in these type transactions. Every attorney involved had a duty to at least check titles, lien reports and real estate plat records. Thornton will talk if threatened with prison. He’s country club soft.
BTW - what happened to the Alston case? Brunini fix that yet? I thought voir dire was supposed to start Monday?
Interesting attorney selection with Alan Perry and Ed Blackmon.
Sort of reminds one of the law firm of Bendini, Lambert & Locke from John Grisham's book, "The Firm". They got caught and brought down by their illegal billing practices through the U.S. Mail. Here, on the one hand, BS is saying that "Adams hired us once in 2009 and once in 2012", which would mean that BS stopped billing Adams for their services in 2012. But, on the other hand, according to Kingfish's statement above, "Butler Snow, in true Shylock fashion, continued to bill Adams for services rendered after he was caught. Lord Snow finally terminated the relationship on May 11 – two days after he pleaded guilty and 11 days after he was indicted." Hmmmm .... would that mean that through 2018 BS was billing Adams for services not performed, akin to Grisham's Bendini, Lambert & Locke?
Area’s self-proclaimed best law firm ...
... hires lawyers who don’t know the difference between “infer” and “imply.”
Butler Snow seems to have forgotten the chief recruiter, Mike Billings was on their payroll. Maybe this explains why Donnie Canada left the firm
Wow, this is the best they have? This is bad. Real bad. Not to mention the arrogance of even proposing that the receiver should enter arbitration with them...defrauded parties be damned. And creating an entity to provide services you can’t legally provide? Yeah, I guess Lamar should be set free because it’s the evil LLCs that did all of this.
I actually think that Blackmon and Perry were savvy selections on BS' part. I have no idea what kind of lawyer Blackmon is, but considering Carlton Reeves is Africa-American, it certainly can't hurt to have a prominent African-American in their corner. My guess is that he will be the mouthpiece.
Perry, on the other hand, is a very smart lawyer. He graduated top 5 in his class at Harvard. Plus, he was once a partner at BS, so I'm sure that the BS partners have a level of comfort with him.
It is interesting that Donnie Canada is now employed by Barksdale Management Corporation, a company that specializes in "investors".
Barksdale Management specializes in one investor: Jim Barksdale. That's his family office. It's a cush job where Don Cannada can ride out the golden years of his life.
Barksdale and Cannada are friends. Have multiple LLC's together. Have a large tract of land off 55 in Holmes county.
Ruh Roh... When you have cite and distinguish the only Fifth Circuit precedent in a footnote (fn3) it's probably a long-shot.
Ruh Roh... When you have to cite and distinguish 5th Circuit precedent in a footnote (fn3) it's probably a long-shot.
@ 7:05 That is not interesting at all. Makes total sense. Perry is a very good lawyer. And Blackmon may carry some weight with Judge Reeves.
Alan Perry was selected for his legal acumen. He's a darned good lawyer. Ed Blackmon was hired for his jury selection tactics, and I seriously doubt Judge Reeves will be impressed or influenced by Blackmon.
I am sure that Adams does not want to be the only felon grabbing his ankles thru old age. He probably wants some BSnow company in his love pod. I would not be sleeping well if I was involved in any way with this scheme.
In the late 70's, early 80's, a guy named Mike Billings attended Belhaven College and was involved in College Republicans. Is this the same person?
Exactly, 8:02. The second sentence of the BS filing used the word 'infer' incorrectly....and these people are lawyers. Maybe the girl who replaced Feel's daughter there wrote it.
Seems to me, though, the firm thinks this garbage filing will frighten the jurdge into thinking nobody wants to mess with BS.
January 25, 2019 at 8:02 AM
I was thinkin' that too. Or is it to? Or is it two?
You really think they hired Blackmon because he's black. How clueless can you get?
@curious George: do you remember if he wore black velvet Gucci slippers? If so, then yes.
@12.34 PM
Why else would they hire Blackmon?
Helluva courtroom lawyer. Probably my favorite one to watch in the courtroom. Go watch the pardon hearings at the MSSC. Watch his performance and then those who come after him.
Judge Reeves will not be influenced by race. Perry will be the chief strategist before trial and likely will argue motions. If the case goes to trial, Blackmon will be better before the jury than Perry. Good team
Best Two Lawyers for Lawyers, they will minimize the damages. Big Big payday for both no matter what.
Blackmon is today's Chockwe. But, if this is not about dog fighting or some thug killing a Texas transient in Holmes County, Blackmon, like Chockwe before him, is in way over his head.
Is it shark week already?
Crooked lawyers and crooked judges go hand in hand. If the court allows this, then you know the rest
I think people are afraid to comment for fear of being sued.
Full disclosure: I am a practicing attorney who is anti-pre-dispute arbitration (at least in employment and consumer contracts, especially contracts of adhesion); and I bring suits against attorneys/financial professionals for malpractice. I get pushed into mandatory arbitration all of the time in my practice. I, however, do not understand the theory that the SEC receiver, who stands in the shoes of the victims of this Ponzi scheme, actually somehow stands in the shoes of Lamar Adams in terms of his agreement with Butler Snow Business Advisory services. That is not a plausible argument.
And, for the commenter who claims that Butler snow is rolling the dice pushing for arbitration, I could not disagree more. Arbitration is a very rigged game that strongly favors corporate defendants, especially powerful Law Firm defendants. There is a reason, a selfish one, for Butler Snow to push this implausible theory with this Hail Mary attempt at forced arbitration. They know that arbitration will unfairly favor them.
....do tell why it unfairly favors corporate defendants counselor.
Most arbitrators are big firm lawyers themselves, or retired big firm lawyers.
@6:01, not true.
@12:36 IF any number of arbitrators are big firm lawyers, or retired from such....why are they allowed to operate with such bias and favoritism as you believe? There's a thing called the Mississippi Bar isn't there? Why aren't they reported? Or are you suggesting that the legal profession is a rigged game with little to no integrity.....at least with corporate arbitration.
By the time this situation is determined, the coffers of Lord Snow will have been depleted. Bankruptcy and eventual reorganization will occur. Basically, Lord Snow will be whole again, just under a new corporate charter. The only real losers in this will be those scammed by Adams and his minions whose scammed money will go toward this prolonged litigation.
Macy:
You have never arbitrated a case to fruition. That is, you’ve never been exposed to how arbitration operates from start to end with a set of facts favorable to your client.
I have and yes arbitration is hard for plaintiffs.
But...once a finding of liability takes hold in arbitration it is not appealable.
There is a reason Citi and large banks removed arbitration agreements.....their use can be company ending with no appeal.
Once you have a good set of facts Macy and an arbitration agreement you will be most happy.
@6:01 "is true" overwhelmingly for arbitrators as a whole, but not so for mediators.
An ex-corporate lawyer being an arbitrator? Why...that would be like somebody with solid football allegiances being a refe....wait!
But if 'a set of (plaintiff's) facts (is) favorable' why is arbitration 'hard for plaintiffs'? That makes no sense.
@10:24, everyone agrees that the corporate lawyer would have the experience on how to interpret facts in a way that would justify actions of the "corporate defendant". THAT'S THE PROBLEM! The former corporate lawyer doesn't have the same experience to look at the facts from the position of the victims who aren't corporations, but are "individuals" who lost their money because of the actions of the corporations.
I didn't think Mills was merely seeking (only) a return of whatever the Butler Snow defendants charged Adams/Madison ("fees," "commissions," etc.) but rather is asserting claims against them based upon alleged negligence. Mills wouldn't be standing in the shoes of Adams/Madison - signatory(s) to the arb provision - but instead, the shoes of the defrauded investors - NON-signatories. Put another way, Mills isn't (only) attempting to enforce or collect under any part of a contract between Adams/Madison and Butler Snow under the general authority granted by receivership appointments, she is attempting to hold Butler Snow liable for its alleged role in the advancement of the scheme using the powers also vested in her by the specifics of her appointment. Hell, look no further than a couple of the cases cited in Butler's own filing: Janvey v. Democratic Senatorial Campaign Comm., Inc., 712 F.3d 185, (5th Cir. 2013), but read well past page 190 as cited, and Javitch v. First Union Sec., Inc., 315 F.3d 619 (6th Cir. 2003), but rather than a sentence or two at 627, read the entire section, about 622-628.
Even if the return of the fees, etc. are held subject to arbitration, as Butler Snow itself perhaps unwisely points out are not much dollar-wise in comparison to the overall loss allegedly suffered by "investors," winning the battle might be losing the war. In other words, since Butler Snow charged for its advice, counsel and guidance, but that advice, counsel and guidance was recklessly, wantonly, and/or grossly negligent and was a/the cause of damage to a third party, it would be arguable that such bad advice and guidance was not what was contracted for. It would be interesting to see BS argue that its clients actually want shitty advice and guidance from BS when they sign a contract with BS for that advice and guidance.
Moreover, the contract was for professional services related to perpetrating a fraudulent, criminal scheme. Even allowing that Butler Snow didn't know at the outset it was a fraudulent scheme, it will be interesting to see how BS argues in defense of its failure to discover what the merest due diligence, especially in light of BS's role and alleged expertise, would and should have readily uncovered. It will also be interesting to read how BS argues in support of enforcing a contract that was allegedly formed amidst Adams' fraud and BS's negligence (and stupidity) and in support of a criminal fraud and at least some of the consideration was essentially stolen money.
Give me a break. They brought Blackmon in because they think Judge Reeves will more likely rule for them because they hired a prominent black lawyer to be on the pleadings. This is just offensive to assume Judge Reeves would more likely rule for them because he is also black. Butler Snow is trying to push this into an arbitration where it would not matter if Blackmon is a good trial lawyer because there would be no jury trial. If they were really bringing in Blackmon for a his trial skills they would have waited until a few months before trial so he would have time to catch and try the case for them. It is pretty common in hinds county circuit court cases. A white lawyer pursues a big case, and when it does not settle the white lawyer brings in a prominent black lawyer a few months before trial to be the lead trial attorney in front of a majority black jury.
Reeves could rule in favor of Butler Snow and this is going to the 5th Circuit. Or Reeves could rule for Mills and this is going to the 5th Circuit. Regardless of the skin color of any attorney involved on any side.
Now, if BS did bring on what its management sees as a token who happens to be friends with Reeves to gain a little extra edge, BS might want to start worrying that it is now trapped: they'll have to keep him on for the duration, including the almost-certain appeals, etc., lest his casting aside tend to piss Reeves off. Plus, if Reeves is inclined to help a brother (and I am neither suggesting or arguing that is or is not the case), and since this thing is going to be a long, expensive battle that his (initial) ruling(s) won't likely resolve, he (Reeves) might just decide to help a brother by helping that brother get some major whiteboy money out of BS. The big bonus for Reeves and Blackmon is that BS's argument thus far is, er, "ill-considered," so Reeves ruling against BS would be perfectly supportable and reasonable.
As an aside, is BS really what passes for a real high-stepping law firm in Mississippi? That is plain old sad on so many levels. First, BS cannot spot total bs like Adams' scams. Then, BS doubles down by putting some pretty iffy bs of its own before a federal judge, with the almost-certain probability BS will have to argue that bs to a circuit panel (at a minimum). Ah, well, BS in, bs out, I suppose.
Can anyone cite just one example of Judge Reeves “helping a brother?”
Ed Blackmon loves being thought of as inferior.....he continues to make millions trying cases because white people think he is stupid....he cannot wait for more posts on how dumb he is as he cashes more checks.....
Here's the very hush-hush, unbelievable secret about federal judges: they are human beings. You know, sorta like folks in every other profession and plain old job, regardless of skin color. For every Barksdale, there is a Walter Nixon. For every Posner, there's a Porteous. And for every generally competent, generally decent, generally fair and impartial federal judge (or doctor or plumber or cashier or...), there are a lot more just like 'em. I doubt anyone can give the example you ask for re: Reeves because there are probably no absolute and indisputable examples of him (improperly) doing so. On the other hand, has every human being on earth consciously felt and shown favoritism for one reason or another and done it more than once subconsciously? I'd suggest that the answer is, "absolutely."
Now, would it be appropriate for Reeves to take some degree of pleasure in the side effects of a legally-correct ruling, especially _IF_ Butler Snow did hire on a token in a racist and inappropriate attempt to influence him? I cannot think of any legal or ethical reason why he shouldn't laugh his ass off about it - equity delights to do justice.
I realize that this is politically incorrect to state the obvious, but the majority of the “victims” were just greedy suckers. Now I sympathize with an elderly victim or two, those who do not have their wits about them anymore, but most of those who lost money were just greedy, money lusting people who fell for a cheap, low level scam. Many of these victims were college educated with many having advanced degrees. So, they were not stupid, just tried to beat the 4% sure money in the bank program. Many of them lived in $400k + homes in Madison County, some along Hwy. 463. Adams, and his cooperating minions (“salesmen”) worked the Ole Miss, Haley, JCC, BS and BD rap to the fullest extent. So, if you willingly gave your $ for this pathetic and obvious Ponzi to a scumbag bullshitter, I don’t feel sorry for you one bit.
All names involved should be released & these persons involved should not be protected.
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