Friday, March 8, 2019

Baker Donelson Tries to Clear-Cut SEC's Timber Fraud Lawsuit.

Baker Donelson asked a federal court to dismiss the SEC's lawsuit against the prestigious law firm in the Lamar Adams fraud case.   The SEC is trying to claw back illegal profits earned by Lamar Adams and several promoters of a $164 million ponzi scheme based on phony timber investments.  However, the court-appointed receiver, Alysson Mills, did not turn the other cheek but fired back at the law factory with her own response this morning.

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. Ms. Mills also sued Baker Donelson and Butler Snow to recover damages.

Jon Seawright is a lawyer at Baker Donelson while Brent Alexander is a lobbyist at the firm. Seawright and Alexander created a timber investment fund, Alexander Seawright Timber Fund I, in 2011 that would invest in Madison Timber. They began pitching the investments to Baker Donelson clients.  Ms. Mills claimed victims “reasonably believed” their investments in Madison Timber and Alexander Seawright Timber Fund I, were “backed and promoted by, and had been vetted by, Baker Donelson.” Earlier post with copy of complaint and more information.  Ms. Mills sued BD for conspiracy, aiding & abetting, gross negligence, and negligent retention and supervision.


BD filed the motion to dismiss on February 21.  Ms. Mills filed her response this morning.  The case is assigned to U.S. District Judge Carlton Reeves. 

Baker Donelsen didn't waste any space but presented the crux of its argument on the first page:

The Receiver’s sole basis for suing Baker Donelson is that two individuals who work at the law firm, Brent Alexander and Jon Seawright, also operated an unaffiliated personal LLC, Alexander Seawright Timber Fund I, LLC, which lent its members’ funds to Madison Timber. But the Receiver does not allege, because she cannot allege, that Baker Donelson owned or controlled this LLC or profited from it in any way.  Baker Donelson is not in the investment business, much less the timber business.  Alexander and Seawright operated their LLC separately from the business of the law firm, and the Complaint alleges nothing to the contrary.  Nor does it allege a single fact about any other person at Baker Donelson.  Whatever Alexander’s or Seawright’s responsibility allegedly may be – and the Receiver does not allege that they knew Madison Timber was fraudulent – there is no basis to hold Baker Donelson liable.

BD says it did not receive a single penny of commission because of Lamar Adams.  The firm even threw a bit of shade at Butler Snow:

The separateness of the Alexander Seawright Defendants’ conduct from Baker Donelson stands in contrast to the Complaint’s allegations about the Butler Snow Defendants. Unlike Baker Donelson, Butler Snow allegedly had “attorney-client relationships with Adams and Madison Timber[.]” Compl. ¶ 66. Where Alexander and Seawright acted through personal LLCs, “Butler Snow launched Butler Snow Advisory Services, [as] ‘a wholly owned subsidiary that provides non-legal business advice.’”

However, Ms. Mills replied that Baker Donelson's picture of events was not a complete version:

The  complaint  alleges  that  it  was  their affiliation  with  Baker  Donelson  that  enabled  Brent  Alexander  and  Jon  Seawright,  a  Baker Donelson lobbyist and lawyer, to recruit new investors to the Madison Timber Ponzi scheme. Alexander  and  Seawright  relied  heavily  on  their  affiliation  with  Baker  Donelson  to  recruit investors. Yes,  they  formed  a  separate  LLC  for  their  investment  fund  and  named  it  after themselves—but  they  pitched  their  fund  as  a  “friends  and  family”  fund  for  preferred  Baker Donelson partners and clients. They referred potential investors to Baker  Donelson’s website, which shows that Jon Seawright is not merely a shareholder in Baker Donelson’s Jackson office but  an  elected  member  of  the  firm’s  national  governing  board  of  directors. They  made  a pitch book that emphasized their affiliation with Baker Donelson...

Baker Donelson knew that Alexander and Seawright used their affiliation with Baker Donelson to recruit new investors to Madison Timber, and allowed it. Alexander and Seawright’s investment business was not “separate” from or “unaffiliated” with the firm’s business—it was inextricably intertwined. Alexander and Seawright used Baker Donelson’s Jackson address for their investment business. They met with Lamar Adams, investors, and potential investors at Baker Donelson’s offices for “closings” and used Baker Donelson’s runners to pick up investors’ checks.  They used Baker Donelson’s conference rooms to make presentations to potential investors, accountants, and advisors. They enlisted their colleagues at Baker Donelson, including from offices in other states, to introduce them to potential investors. They specifically targeted clients of Baker Donelson for whom Baker Donelson had recently closed transactions, because they knew those individuals had money available to invest. They told one such client, “[r]unning funds through us or BD [Baker Donelson] escrow is not a problem” and all “legal and other admin expenses” would “come out of our share.”

The Receiver argues BD doesn't escape liability just because the Baker Boyz didn't share any ill-gotten profits with the parent firm.   "But for Baker Donelson’s recklessness and willful blindness, the Madison Timber Ponzi scheme would not have continuously grown," she wrote.

JJ reported on May 4, 2018 the firm touted Brent Alexander's financial expertise on its website.


A rapidly growing area of Mr. Alexander's practice is advising venture capital and related investors on public policy issues. He has passed the Series 65 Registered Investment Advisor Exam, an examination required by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD) and the North American Securities Administrators Association (NASAA) for individuals who serve as principals in, or advisors to, hedge funds that invest in stocks, bonds and other financial instruments. He has also passed the Series 3 National Commodity Futures Exam, an examination required by the Commodities Futures Trading Commission (CFTC), the National Futures Association (NFA) and the SEC for individuals who serve as principals in, or advisors to hedge funds which trade futures and options
BD said Mr. Alexander was not giving financial advice but was "advising" investors on "public policy issues:

The Complaint’s suggestions to the contrary are based entirely on misleading partial quotations from the website. See Compl. ¶ 81. Alexander supposedly has “a ‘rapidly growing’ practice in ‘advising venture capital and related investors.’” Id. The quoted sentence does not end with a period after “investors.” It actually says that Alexander advises “venture capital and related investors on public policy issues” – not on their investments. Ex. A at 2. Seawright supposedly has “‘extensive experience’ in business development and capital formation.” Compl.¶ 81. That quotation omits the immediately preceding words, which explain that Seawright provides legal advice on “structuring of tax incentives for business development and capital formation[.]”Ex. B at 2. Interpreting the tax code and structuring tax incentives are legal services, not the investment services the Complaint would suggest.
It appears that instead of rebutting this point, Ms. Mills merely said it was a question for a jury to decide.

It nevertheless bears mention that Baker Donelson employed, and continues to employ, Alexander as a “Senior Public Policy Advisor” and a “Broker-Dealer/Investment Adviser.”Seawright was, and is, a Baker Donelson shareholder and “a member of Baker Donelson’s Board of Directors,” with “Practices” including “Securities” and “Emerging Companies.”Baker Donelson argues that additional language on its website qualifies the practices of Alexander and Seawright to exclude the activities Alexander and Seawright performed relating to Madison Timber investments, but that argument only raises a factual issue that should not be resolved on a motion to dismiss.
Judge Reeves set a status conference for March 22.

Related Posts
More lawsuits coming in Lamar Adams case.  
Wife's Tree Falls in Lamar Adams Case
Butler Snow Asks Judge to Dismiss SEC Complaint in Lamar Adams Case.  
Jailbird 
Ole Miss Repays Money in Lamar Adams Case 
Receiver sues Butler Snow & Baker Donelson
 Lamar Adams swindled over $164 million from victims in Ponzi scheme.  
Billings Battles Receiver 
Receiver goes after millions in commissions in timber Ponzi scheme.  
Receiver records $2 million.  
Lamar Adams Sentencing Postponed 
 Federal Home Cooking in Lamar Adams Case? 
Tree Falls Against Pinnacle in Lamar Adams Case 
WSJ Blasts Judge Reeves in Lamar Adams Case 
Judge to SEC & SOS: Not so Fast 
McHenry sues Lamar Adams, claims he was duped.  
A look into how the timber scheme worked.
SEC opposes Delbert's opposition.  
 SEC wants receiver in Ponzi scheme case, Delbert opposes.
Victim sues Timber Trolls 
Lamar Adams pleads guilty.  
SEC: Ponzi scheme began in 2004. 
Flashback Friday
Clearcutting the timber. 
Wicker wobbed in Ponzi scheme.
Pinnacle Trust issues statement on Ponzi scheme
Lamar Adams waives indictment.
Feds: Lamar Adams took over $100 million in Ponzi scheme.
TIM-BERRR!!!











70 comments:

Anonymous said...

But didn't they parade these prospective clients into the esteemed halls of Baker and Donaldson for meetings for the sole purpose of giving the poor saps some assurance that, if these meetings were being held at the firm, the deal was well-rooted--if not endorsed by the firm?

Anonymous said...

God this is going to be fun to watch.

Anonymous said...

BD would have done themselves a huge favor to disassociate with Seawright when all of this came to a head and make it known their dissatisfaction with him. Keeping him employed or onboard is very culpable in my opinion, which is worth as much as those timber tract deeds.

Anonymous said...

1:07 pm

I agree but think....

A scorned former lawyer can shade executive committee actions to sink BD

Think they have to keep him in the fold

Anonymous said...

Just remember that all of these people had their wealth handed to them based on connections and nepotism. And no matter what they will all stay rich while very few commenters here will ever own anything.

#EatTheRich
#FullCommunism

Anonymous said...

I guess none of the Baker-Donalson boys read about the Milgram Experiment when they were in college. . .

"In his book Irrational Exuberance, Yale finance professor Robert J. Shiller argues that other factors might be partially able to explain the Milgram Experiments:
[People] have learned that when experts tell them something is all right, it probably is, even if it does not seem so. (In fact, the experimenter was indeed correct: it was all right to continue giving the "shocks"—even though most of the subjects did not suspect the reason.)[25]"

from: https://en.wikipedia.org/wiki/Milgram_experiment.

Kingfish said...

Just showing your bigotry, 2:16. Many victims were people who worked their asses off their whole lives for their money. Many were small business owners as well.

Keep the Clawback Coming said...

You go girl!

Popcorn... must buy more popcorn.

Anonymous said...

Agreed re 2:16 Kingfish....me thinks that is AOC...

Anonymous said...

Not really much to see here...YET. Baker's counsel wouldn't have been doing their jobs if they didn't strenuously argue for a dismissal and the receiver and counsel wouldn't be doing their jobs if they didn't strongly oppose it.

It will be interesting to see what happens with Alexander and Seawright in the coming weeks. In the opening chapters of this, it was just accusations, so kicking them to the curb wouldn't have been a great move, but now, as the allegations pile up, Baker might start to take the position that even if it isn't ALL true, there is enough truth to make some personnel changes.

Anonymous said...

It’s undisputed that this was a separate enterprise of Alexander and Seawright. BD didn’t make a dime. How can the receiver demand that BD disgourge itself when it never fed at the trough?

Anonymous said...

Clawback what from BD- how do you clawback zero?

Anonymous said...

I guess even the rich now have to be a protected class. Pretty soon the Trumptards will want to make it a hate crime to vote Democrat. Everyone has got to be a special protected snowflake these days.

Anonymous said...

KF complaining about intolerance of other views. That’s rich.

Anonymous said...

This is deep. Can I get bourbon with my popcorn?

Anonymous said...

Anyone who thinks they can receive a guaranteed 13% return on any investment is stupid or a liar.

Anonymous said...

I blame the banks for not paying any interest!
People are looking for alternative ways to make their hard-earned dollars go farther. Some of these victims used their retirement dollars, realizing that their money wouldn't carry them through the rest of the years of their lives.
As far as BD goes, the blame falls on the two individuals for essentially operating a 2nd business out of the law firm...unless it is proven that the firm would receive a % of profit, then things are different!

Anonymous said...

@Kingfish

It never ceases to amaze me how you petite bourgeoisie will defend your masters with anecdotes of honest wealth acquired through hard work and dedication to capitalism.

Anonymous said...

@ 3.55 PM:

First, don't blame the banks - blame the Fed. ZIRP has so depressed interest rates that banks have no choice but to cut their rates. It has inflated pretty much all asset classes other than cash as investors seek yield, and the economy is ripe for a reset.

Second, while the primary blame with respect to BD resides with Alexander and Seawright, under the principle of respondeat superior, the firm is answerable for the actions of its agents. A&S remained partners of the firm throughout the scam, thus they were its agents. If the facts that Ms. Mills cites are true (references to the BD name during sales pitches, use of the BD facilities, etc.), then it is reasonable and likely that investors relied to some degree on the reputation of BD itself in making a decision to invest with A&S' unaffiliated LLC.

BD as a firm had a duty to recognize this and at a minimum perform some due diligence on the investment to determine its legitimacy, or ultimately ask A&S to either leave the firm or put safeguards in place to ensure that potential investors knew that there was absolutely no affiliation at all - no investor meetings in their offices, no references to BD in the sales collateral, clear disclosures in the sales collateral that "the Alexander-Seawright Fund is in no way affiliated with Baker Donelson"...yadda, yadda, yadda...

It does not appear that BD did any of the above. So, while no one in the firm outside of A&S may have known it was all a scam, BD was negligent in allowing A&S to indirectly use it's brand and reputation to attract investors. Thus, BD is culpable.

Anonymous said...

You know you are living in late stage capitalism when people watch popular TV programs about other people accumulating wealth by purchasing stuff cheap and selling it for a profit.

Let that sink in.

Anonymous said...

They were BD employees. They used BD offices to hook their fish. BD knew they were doing so. Even if BD did not profit from the scheme they should have some liability. There may not be any claw back money from BD but it would seem that there would be liability on there part especially if the fish was a BD client.

Anonymous said...

Do law firms have any real worth other than their reputations? I assume they pass through most of the earnings to members of the firm each year. They are not like publicly owned and operated corporations paying dividends. It might be easier for these firms to just say "come and get it." Someone with real knowledge please explain what the assets of the firm are and how they can be liquidated. Am I right in assuming their retirement funds are protected?

Anonymous said...

Alexander failed the first duty and and responsibility of a fiduciary..is it a viable, qualified nvestment within suitability standards. Can the investor get a daily quote on the value of it. Is it liquid? Questions like that are basic and any qualified fiduciary should and would ask that.

More troubling for him....FINRA is coming after him next....and they have unlimited funds and attorneys. Good luck with that Mr. Alexander.

Anonymous said...

The fact that the firm’s runners were used to pick up and deliver payments is bad news for their claim.

Anonymous said...

Kinfish and 2:47:

2:16 here. No, I am not AOC. You mis-interpret my comments. I was trying to make the point, obviously without much success, that people fell for the Ponzi scheme simply because they were led to believe that it had the imprimatur of BD. That was why I cited the Milgram Experiment. H*ll, I might have fallen for it myself if I had been shepherded up to BD or BS and given the impression that the scheme had been vetted by people smarter and more financially sophisticated than I.

Anonymous said...

It sounds like BD “lacked institutional control” over their firm, Lobby, employees, conference rooms, client database, and more...

Now where have I heard that phrase recently??? Hmmm...

Anonymous said...

Do all the perpetrators in this fraud deserve fines and jail time? Absolutely, plus disbarment for the lawyers involved.

I’m with @3:45 on the “victims,” though. Anyone who invested this “magic” timber got what was coming to them. They were either dumb (13% interest bearing trees!!), greedy (I can get exponentially higher rates than any other interest-bearing investments because I’m SPECIAL.), crooked (This doesn’t sound quite kosher, but I’m a member of the NE JXN/Madison “elite,” so I’ll get away with it.), or a combination of the three.

Fools and their money are easily-parted, and anyone who lost significant money in this garbage probably should have never had it to lose in the first place.

Anonymous said...

I looks to me like the receiver argued that Baker Donelson's liability is based on vicarious liability for acts committed under the apparent authority of implied agents. I think she makes a strong argument.

Anonymous said...

The asset?

100,000,000 worth of insurance ...each

Probably a 2,000,000 self insured retention

Prove negligence and win a prize

Anonymous said...

Full disclosure:

Madison Timber, LLC will be the name of my new landscaping company.

New customers are eligible for a 13% discount.

Anonymous said...

Attn 9:27 They have errors and omissions policies, but these don't cover fraud. Prove fraud, and sorry, no prize.

Anonymous said...

5:49 am

You don’t litigate much

There are other allegations in the complaint which are covered by their insurer.

Prove fraud....or go that route for a while...and insurer has obligation to settle to avoid that finding.

Go sit in class for 3 years and then take a quiz.....you’ll see.

Anonymous said...

@3:45 "Anyone who thinks they can receive a guaranteed 13% return on any investment is stupid or a liar." Exactly. I would bet half were just plain stupid, but the half that were liars knew exactly what the fix was about....including Roger Wicker.

Everitt Ulysses Magill said...

Three reasons why you BD boys are dumber than a bag of hammers.

1. Alexander/Seawright should have given back the money...but no. Dumb.
2. Baker Donaldson should have stopped this ripoff...but no. Dumber.
3. Baker Donaldson should have fired these shysters...but no. Dumbest.

The AG should have already filed a RICO lawsuit against everyone involved on behalf of the citizens who were ripped and jipped by these criminals wearing $1,000 suits, Rolex watches and driving a $100,000+ Mercedes Benz. But don’t hold your breath on that one boys.

To quote Pappy O’Daniel, “We’s doing wholesale politics now boy!” Huge law firms give lots of dough and play hardball politics with those who should hold them accountable. If I remember correctly, Mr. Epps lost his suits, his Mercedes and his Rolex.

Anonymous said...

BD (Ben Dover), the receiver is coming for you, so you had better ramp up the billable hours.

Anonymous said...

Since a Ponzi scheme is illegal, the investors would not be unreasonable to assume that they were being presented a legal investment since a nationally known law firm with greater resources was giving the investment its blessing.

So, yes, the Milgram Experiments is on point.

The investors relied on the expertise of Baker Donelson. It prevented them from questioning the return on investment and even if they had in those meeting, having a lawyer assure you that the return is legitimate would be persuasive. Indeed, they would have assume BD was responsible for the legal structuring of the investment.


I don't understand why BD isn't trying to negotiate a deal.

Anonymous said...

Is Seawright and Alexander facing criminal charges?

Anonymous said...

Litigator here with 40 years experience.
After reading BD motion to dismiss and Receiver reply it is patently obvious that BD had no legal duty to these investors who gave $ to the independent activities of Alexander Seawright
Absent a duty no liability can attach
BD dismissal in order.

Anonymous said...

Always love to see the pissing contests between the anonymous lawyers on this site--each who touts his/her years of experience and then wows us with their astute (and more often incorrect) legal analysis.

Anonymous said...

Wow thanks litigator with 40 years experience. You must work for a firm like BD

Anonymous said...

Hey 8:11, that’s the best one so far! (BD). Go by either building, BD or BS and the lights are on ALL NIGHT LONG! There’s lots of shaking (billing) going on.....did I say Billings?

Anonymous said...

9:25,

You’re adorable, Mr. Partner at BD. Please explain to those of us in the back exactly how Alexander and Seawright were independent. They used BD facilities, employees, physical address on state registrations and shared the same client list.

We wait for your erudite opinion with bated breath.

Anonymous said...

To address the comments by 9:25 a.m., this is March 8 @7:55 p.m. I wrote that "the receiver argued that Baker Donelson's liability is based on vicarious liability for acts committed under the apparent authority of implied agents."

Also, it appears that BD argued facts outside of the complaint when it quoted from its own website. If so, and if not excluded by the court, the Motion to Dismiss should be treated as a Motion for Summary Judgment. The receiver noted that BD presented in its brief a fact for the jury (which precludes granting a MSJ), and I think she's right.

Anonymous said...

9:25 am

You will be disappointed.

A lawyer who holds himself out as a partner in a firm, touts his expertise in investing, Conducts all business with/through law firm, derives money from the activity, has firm who derived benefits from the fraudulent activities (new clients, different streams of income,’exposure to new investments), and who fails to check land records at center of deal.....

Law firm will not be dismissed at this stage.

Facts will be developed and then insurer will pay $$$.

Wanna bet?

Anonymous said...

When a law suit is won against BD, where will the money come from to pay the judgement (fraud is not covered by malpractice)? Does the firm have assets other than their "good name" and a few word processors and some office furniture? The lawyers no doubt greedily pay themselves virtually all of the fees they have collected. When fraud is proven, the two principals will go to jail and their assets (if there are any after fighting for freedom) will be distributed, which might be enough to pay for the recovering firms time invested. There appears to be only one winner here and this process will keep going on and on.

Anonymous said...

Their insurance will have to pay- as will others. Those of you who invested in this bad deal better count your blessings it turned out to be fraudulent. If there had been no fraud, there would be no insurance proceeds, your investment would just be gone. Kind of ironic, no?

Anonymous said...

At this stage, there are only allegations. Wait on the evidence before you pass judgment.

Anonymous said...

The legal profession used to be one that every parent sought for their child due to its respect individually and standing in the community. Sadly, that is not the case these days, and BD not IMMEDIATELY firing these two shysters has placed them in the ranks of priests that cover for the pedophiles. In both cases, follow the money.

Anonymous said...

Another litigator here. I see the 40-year litigator's point. BD has some points in its favor but BD had a duty to the investors.
First, BD did not have to collect an attorney's fee to have a relationship with the investors. BD partners were making money, albeit commissions and not fees. That alone seems sufficient to create the relationship between BD and Adams.
Hence, contrasting BD with BS (which collected attorney fees) leads nowhere.
Second, BD not bothering to check the land records or confirm ownership or confirm a liability policy existed was negligent.
Seems to me the Receiver has the stronger argument.

Anonymous said...

When I read litigator, I think depo taker and am really impressed

Anonymous said...

I should have bought stock in industrial size paper-shredders.

Anonymous said...

So my take-away from reading most of the above-

If a lawyer in a law firm conducts some shady business on the side with some third party ( and the law firm is not a party to the transaction)
And the deal goes south and the third party sustains a loss, the law firm is liable.
Lord have mercy- why would anyone want to be in a law firm?

Anonymous said...

Retired litigator here with 85 years experience. BD (Ben Dover, Esq.) is screwed.

Anonymous said...

"Lord have mercy- why would anyone want to be in a law firm?"

Because they get to drive nice cars and their wives get to drive black Tahoes and Land Rovers? And because they get to live in big houses, the cheapest of which runs at least 400K (and that's a starter-house)? Because their kids get to shoot basketball in the driveway all summer long while the rest of our kids have summer jobs?

(I'm developing a fire hydrant fetish)

Anonymous said...

First, I'm with 2:16 - what in the heck did that comment re: Shiller, Irrational Exuberance, etc., possibly have to do with racism?

Second, for those wondering about Baker, zero fees and clawback, if you want an in-depth explanation, research it, but generally the theory of recovery is that since Alexander and Seawright were clearly connected to Baker and many of their "clients" were apparently Baker _clients_, the receiver is arguing that those clients reasonably inferred that Baker was involved or had blessed their little sideshow, plus, since Baker knew or should have known that these two were pimping something from the Baker offices, Baker either had some level of duty to check it out or tell them to quit doing it, at least from Baker offices with Baker support staff. Since Baker failed to do anything about anything when it was plain these two were doing SOMETHING, they cannot now claim complete innocence. Yes, it is an accepted general legal theory and yes it is a viable, reasonable claim under the facts as thus far presented by both parties in their filings.

Again, nothing to see here...YET - Baker's counsel wouldn't have been doing their jobs if they didn't argue for the dismissal. My current guess based on the information made public to this point is that folks suggesting that Baker's E&O coverage is the real brass ring for Mills are on the right track, save for a couple of things: there is Alexander and Seawright personally and their own E&O coverage to go after and then, a high hard RICOing for whichever combination of parties can be jammed up with that. If Mills could somehow connect Seawright and/or Alexander with Butler (_Butler_, not Baker), hoo-boy, it would get ugly and interesting VERY quickly.

Anonymous said...

Why doesn't an E & O policy cover fraud?

And, one could argue that it was mere negligence that the two naive attorneys never went to Lowndes county to view the timber property.

Anonymous said...

5:55 pm

Because the average partner earnings at Baker is 600k or more.

BS is probably 400k

And lawyers can shield themselves from this type liability by making sure their partners are not committing fraud and jeoparding the firm. I’ve seen “bad” things happen at firms who engage non lawyers to be partners in affiliated groups.

So people do want to be lawyers even if there is some risk.



Anonymous said...

If you want to see what civil and criminal actions against Big Law partners and shareholders can look like, Google the following: "Clark, Thomas & Winters Austin, Tx"

Anonymous said...

Yes 7:45, but its those ancillary services provided by these mega firms that allow them to be able to play both sides of the street....ie like “investment advisers” and “lobbyists” that cross ethical lines because they aren’t lawyers. This will be an argument with both BD and BS, so should be about time to relook these relationships.

Anonymous said...

12:16 pm

Insightful

I agree

Anonymous said...

Monday special: every idiot who posts an uninformed, biased, and speculative message about the law or the likely outcome of the Receiver’s civil actions will be entitled to a free filet mignon and a bottle of cabernet sauvignon at the Country Club of Jackson. But you will be served in the parking lot.

Anonymous said...

Re: JCC steak special - don't fall for it! Remember, Jimmy Hood hisownself (RIP Dan Jenkins) said blogs aren't legitimate sources of news.

Anonymous said...

6:23 pm et.al.

Law firms have malpractice insurance. They also have assets.

I'm actually surprised their insurance carrier hasn't been trying to force an negotiation. Perhaps, the national group is willing to have this one go under.

Anonymous said...

Attn 9:32 Do insurance companies cover fraud? Give me some example of the various assets of any real magnitude that law firms retain.

Anonymous said...

Attn 10:48 AM, your question is akin to asking, "Do insurance companies cover flood, mysterious disappearance, named storm wind damage, or any other specific peril?" If you pay the right "insurance company" the premium asked for coverage sought and offered, then that company would be obligated to pay if a covered event occurs. In this context, if Baker and/or Butler has applicable (or potentially applicable) coverage and an employee or member commits a covered (or potentially covered) act, the company would (or potentially could) be obligated to pay according to the terms of the policy/coverage. The more-appropriate first question would be, "what coverage(s) do the various current and potential Defendants have?" and the second would be, "what covered act(s), if any, is reasonable to allege that each and every Defendants committed?"

A couple of things with which I do agree with Baker's attorneys: One, if there was never a lawyer-client relationship, any alleged malpractice claim(s) fail as a matter of law. In this case, it does not look like that will be much comfort to any of the Defendants. Two, the receiver stands in the shoes of Adams and Madison timber, not the "investors." But again, it does not appear that will be of much ultimate comfort to certain defendants. It is sort of like someone going about 120 miles an hour in a grossly overloaded timber truck, losing control, plowing into a Bugatti dealership, and their $1,000,000 legal team gets the judge to dismiss without prejudice the claims of the 27 owners of cars there for service and gets them off the hook for the latte machine because it wasn't working properly before they destroyed the place.

Anonymous said...

Attn 12:09 Thank you for your explanation. Fraud is, as I interpret from you, covered if you have an insurance policy that specifically covers fraud. Would you mind, in a less legal way, identifying the U.S. insurance companies that specialize in fraud coverage?

Anonymous said...

Identity Restoration & Fraud loss coverage - State Farm just googled it. 🎭

Anonymous said...

Firms and/or partners/members can insure against loss caused by certain actions of dishonest personnel. I do not know what particular coverage Baker or Butler has, if any, or the specifics of the employment or partnership standing/agreement of those involved. At this point, from what I've seen, the allegations against the law firms and personnel are various forms of negligence and/or malpractice, not "fraud," so whether or not any such policy is in place, there is nothing thus far to invoke such coverage.

Anonymous said...

Attn 7:24 Good try, but coverage would have to have been coverage paid for and covering the victims (investors who sought insurance protection). I don't think the perpetrators could find a viable insurance company to cover "THEIR" fraud, just coverage of fraud against them. State Farm is not that desperate and stupid. Try again???? You really didn't learn much in your business law undergraduate class.

Anonymous said...

Bizarre choice of lawyers by all Defendants. You would think they would have heeded Judge Reeves' 'no old white guys' Order. It's like they didn't read it.

No women, no diversity and no contemporaries of Judge Reeves. Even though the firms involved ALREADY HAVE lawyers who fit the bill. And the old white guys' experience didn't help, because the tone of BD's motion to dismiss was all wrong--which the young, female receiver jumped on in the first sentence of her response.

It's an indictment on the Jackson firms' Big Law system, with its glass ceilings and interoffice turf wars. It's also justifying Judge Reeves' decision to appoint an out-of-state receiver. He didn't want a trial with the best lawyers on team back in the locker room.

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
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