Lathrop & Gage has agreed to pay the Federal Deposit Insurance Corp. $7.4-million to settle a legal malpractice suit that was originally brought against the firm by Washington Mutual. The suit was scheduled to begin this week in federal court in St. Louis.
The FDIC took control of the lawsuit when Washington Mutual failed in September 2008. Lathrop & Gage was sued by the financial institution for its handling of an earlier suit filed by Conseco Finance Servicing Corp. against North American Mortgage Co. which had just been bought by Washington Mutual, in which Conseco claimed misappropriation of trade secrets and unfair competition.
WaMu lost the case and had to pay Conseco $10.7 million, the Kansas City Business Journal reported this morning. In turn, WaMu sued Lathrop & Gage for legal malpractice.
Lathrop & Gage has about 300 lawyers and is based in Kansas City.