Legal News

Morgan, Lewis & Bockius Faces Revived $12 Million Legal Malpractice Claim
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Reinstated Lawsuit Challenges U.S.-Based Global Law Firm’s Liability

In a significant legal development, the global law firm Morgan, Lewis & Bockius is facing the revival of a $12 million legal malpractice claim filed by investment company Prospect Capital. The lawsuit, initially dismissed earlier this year, has been reinstated by a New York judge, Justice Margaret Chan. The lawsuit alleges negligence in transactional legal services provided by the law firm.

A Second Chance for Prospect Capital

  
What
Where


Justice Margaret Chan, in a ruling made public on Thursday, granted Prospect Capital’s request to reevaluate its complaint, stating that the law firm was liable for negligence in the transactional legal services they provided. The initial dismissal in May had cited a failure to adequately allege that Morgan Lewis’s actions in a loan agreement had damaged Prospect Capital. The judge’s new order acknowledged that she had “overlooked” part of Prospect’s complaint.

Want to know if you’re earning what you deserve? Find out with LawCrossing’s salary surveys.

A Fresh Perspective

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




It is important to note that Justice Chan’s new opinion does not delve into the merits of the dispute, as Morgan Lewis has consistently denied any wrongdoing. The burden now rests on Prospect Capital to establish the requisite elements of legal malpractice, including causation and damages. Whether Prospect Capital can successfully demonstrate these elements remains to be seen. Justice Chan’s latest decision, dated October 25, emphasized this uncertainty.

No Immediate Response from Either Side



Representatives from Morgan Lewis and the attorneys defending the firm in the litigation did not immediately respond to requests for comment on Thursday. Similarly, an attorney representing Prospect Capital did not respond to a similar request.

Prospect Capital’s Financial Standing

As of March, Prospect Capital reported having assets of $11.5 billion under management. The investment company filed the lawsuit against Morgan Lewis in October 2022. In the lawsuit, Prospect Capital alleges that Morgan Lewis, a firm with over 2,200 lawyers, mishandled its work concerning a $17 million loan issued in 2014 to a company specializing in recovering unclaimed property. Prospect Capital contends that Morgan Lewis failed to identify a critical change in the loan subordination agreement and made other errors restricting the company’s ability to address an alleged breach in its loan to non-party Venio LLC.

Whether you’re a recent law school grad or an experienced attorney, BCG Attorney Search has the job for you.

Morgan Lewis’s Defense

Morgan Lewis’s legal team had previously urged Justice Chan not to reinstate Prospect’s case, asserting that Prospect had already been given a “full and fair opportunity to present all of its arguments.” They also argued that Prospect was unfairly attempting to introduce new allegations at a late stage.

Don’t be a silent ninja! Let us know your thoughts in the comment section below.



 

RELEVANT JOBS

Trademark Paralegal

USA-MI-Detroit

Perform high quality, billable work Correspond with foreign associates regarding searching, filing, ...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Education Law Attorney

USA-CA-El Segundo

El Segundo office of a BCG Attorney Search Top Ranked Law Firm seeks an education law attorney with ...

Apply Now

Education Law Attorney

USA-CA-Carlsbad

Carlsbad office of a BCG Attorney Search Top Ranked Law Firm seeks an education law attorney with 4-...

Apply Now

Education Law and Public Entity Attorney

USA-CA-El Segundo

El Segundo office of a BCG Attorney Search Top Ranked Law Firm seeks an education law and public ent...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top