GLLLP commences new action on behalf of New Canaan Capital Management against mega-law firm Norton Rose and others

As reported in New York Law360:

By Andrew StricklerLaw360 (January 4, 2019, 7:34 PM EST) — Months after winning dismissal of a malpractice suit brought by a Connecticut private equity firm, Norton Rose Fulbright on Thursday was hit again with allegations in New York court that lawyers cheated a businessman out of his stake in a power plant project.

Like the previous case, the new suit from New Canaan Capital Management LLC focuses on allegations that attorney Scott Naidech and others duped New Canaan Managing Director Jeffrey Weisz in a generating station deal in order to help a handful of other entities.

New Canaan counsel Michael Gordon called the latest New York state complaint “a more fulsome and detailed explanation” of alleged deception by Naidech and others that undercut Weisz.

“We believe this will make clear we’re not talking about a routine malpractice case; we’re really talking about aiding and abetting fraud,” he said.

According to the company, Weisz told Naidech in 2012 about his interest in acquiring a Pennsylvania plant owned by Energy Systems North East. Naidech was at Chadbourne & Parke LLP at the time, which was later absorbed by Norton Rose. The attorney worked with Weisz to set up the deal with other investors, including Ozado Partners LLC and Southport Energy Asset Management LLC, according to the suit.

But unbeknownst to Weisz, Naidech and others were laying plans to cut Weisz out his expected interest in the deal — a 3 percent fee on the purchase price and a 20 percent equity interest in the project’s controlling entity, known as Erie Power LLC. The suit estimates damages in excess of $20 million.

“In the final iteration of the deal documents prepared by Chadbourne, my client was told, ‘There were only minor changes, go ahead and sign this,’ but the result was he signed something that actually divested him of what should have been his position,” Gordon said.

New Canaan previously sued Ozado, Erie Power and others in state and federal courts, according to a footnote in the initial complaint, and has argued that it uncovered the depth of the alleged fraud through discovery. 

“This new complaint makes the same claim against the firm that the court already dismissed last September,” a Norton Rose spokesperson said. “We expect this complaint to likewise be dismissed based on that ruling.” 

Chadbourne & Parke combined with Norton Rose in mid-2017. Naidech left the firm that year for Winston & Strawn LLP.

Norton Rose partner Robert Shwinger, who represented the firm in the previous suit, declined to comment Friday. Naidech also did not immediately return a message.

New Canaan is represented by Michael R. Gordon of GordonLaw LLP.

Defense counsel information was not available Friday.

The case is New Canaan Capital Management LLC v. Chadbourne & Parke LLC et al., case number 650031-2019, in the Supreme Court of the State of New York.

–Additional reporting by Jack Newsham. Editing by Aaron Pelc.

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