The Wall Street Journal recently reported on an increase in cases involving bankruptcy trustees pursuing former partners for the debts of a now-defunct law firm, including suits against the new firm that the partner joins. Under the “unfinished business doctrine,” partners can be sued by a bankruptcy trustee for profits that the partner started at the previous law firm and took to the new law firm. Bankruptcy trustees argue that when the partner takes clients and ongoing matters to the new law firm, both the partner and the firm benefit financially. There have been a number of cases in which the bankruptcy trustee has been successful recouping settlements from the partner’s new firm.
Debt of Defunct Law Firms Can Follow Partners to Next Job
January 6, 2012 by
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