New York Judge Richard Lowe has issued an injunction barring Morgan & Finnegan from selling or transferring assets, in a lawsuit contending the dissolved law firm defaulted on its loan agreement.
JPMorgan Chase contends that Morgan & Finnegan owes it more than $4 million; the firm has bounced severance checks since its assets in the bank are frozen.
Lowe has appointed a receiver, and is requiring the law firm to identify all its assets, including partner capital accounts.
JPMorgan agreed to give the law firm a $2 million revolving line of credit and a letter of credit for nearly $4.97 million, to pay for a lease at Three World Financial Center. By December, Finnegan & Morgan was talking to Locke Lord Bissell & Liddell, which agreed to hire more than 30 of its lawyers.
The firm dissolved last month, but Locke Lord is occupying the leased premises under a cross-licensing agreement with Morgan & Finnegan, encumbering the bank’s collateral, the complaint says. JPMorgan contends the firm missed its February rent, causing the landlord to seek the full $4.9 million under the letter of credit.
Locke Lord is not a party to the suit.
Posted by Erik Even
on March 17, 2009. Filed under Home,Law Firm News,Legal News.
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