A dissolving New York law firm is caught in the middle of a legal battle involving two former partners. One partner claims that the other partner is using the offices free of rent but at the expense of creditors of the law firm. The law firm in question, Arkin Kaplan Rice, did not have a written partnership agreement. Ronald Minkoff, a partner from Frankfurt Kurnit Klein & Selz, said that it is “unusual in this day and age” for a law firm to not have a partnership agreement in place. Minkoff also said that it is not uncommon for disputes regarding office space use and billable time between former partners.
The lawsuit was filed in Manhattan earlier in the month of July by attorneys Stanley Arkin and Lisa Solbakken on behalf of their former law firm. Howard Kaplan and Michelle Rice are named as defendants along with their new law firm, Kaplan Rice. The lawsuit is asking for Kaplan Rice to be thrown out of their offices and for an account of billable hours.
“Contrary to the way Kaplan and Rice have acted, AKR is not a carcass to be picked clean by its partners,” the suit says. “It appears that their strategy is to stay in AKR’s space without paying any rent for as long as they can, deriving the huge benefit of rent free operations for them and their new firm, at AKR’s expense, and the expense of AKR’s creditors.”
In a statement from July 10, Kaplan said that the decision by Arkin to “sever our enduring and successful relationship saddens us deeply. When the furor dies down over the actions Michelle and I were compelled to take to protect the dissolving firm and its assets, we believe Stanley’s allegations will be shown to be baseless and pointless.”
Arkin found the firm in 1968 and it focused on civil litigation, white-collar criminal defense, employment-relation litigation and regulatory litigation. Arkin Kaplan Rice owes over $321,000 in rent payments, with a $158,282 rent payment due in July, according to the lawsuit. “By refusing to approve payments to AKR’s creditors, Kaplan and Rice have rendered AKR incapable of carrying out an orderly and lawful dissolution and have exposed AKR to liability to its creditors,” the lawsuit states.
“Mr. Arkin’s lawyer has demanded that our clients immediately pay various expenses (including rent) from the dissolving firm’s account. In response, we have explained that the funds in that account are only to be used to settle the firm’s liabilities as of April 1,and that Mr. Arkin, who is now using the space for his new firm, has no right to simply apply those funds to pay rent,” wrote Arthur Ciampi on June 29 to the sublandlord of Arkin Kaplan Rice. Ciampi is representing Kaplan Rice.