Las Vegas Showrooms and Legal Malpractice
This case, reported by Noeleen Walder in the NY Law Journal is highly complicated, and represents the future of legal malpractice. Greenberg Traurig is accused of becoming involved, through its attorney Robert J. Ivanhoe, in a Los Vegas convention/showroom development, in a competitor's similar project all of which is tied up in a California arbitration and legal malpractice case.
"A state judge has refused to dismiss a suit alleging that Robert J. Ivanhoe, chairman of Greenberg Traurig's New York office and head of its real estate group, disregarded his "legal and fiduciary duties" by taking a personal financial stake in a competitor to a client that had invested in a multibillion-dollar real estate venture.
Supreme Court Justice Richard B. Lowe of Manhattan held in Nama Holdings LLC v. Greenberg Traurig LLP, 601054/08, that the operating agreement of Alliance Network, LLC, which retained Mr. Ivanhoe in connection with a multi-phase development project in Las Vegas, permitted the company's principal investor, NAMA Holdings, to derivatively sue on behalf of Alliance.
Alliance was formed in connection with the WMC Project, an eight-phase development situated on the 57-acre World Market Center in downtown Las Vegas. The convention center and showroom campus, designed to compete with the furniture complex in North Point, N.C., ultimately is expected to contain eight buildings with 12 million square feet of exhibit space.
According to the complaint filed on behalf of it and Alliance, NAMA, a Nevada company, owns approximately a 70 percent equity interest in Alliance. A memorandum of law complaint says that Greenberg Traurig and Mr. Ivanhoe became involved with Alliance when the company's managers, Shawn Samson and Jack Kashani, offered Related Companies L.P. - allegedly the firm's largest real estate client - a 50 percent stake in the venture.
Soon after Greenberg Traurig and Mr. Ivanhoe were retained by Alliance, they allegedly embarked on a covert partnership with Messrs. Samson and Kashani to develop the competing Blue Diamond Venture, a proposed 100-acre convention center and furniture showroom situated "just miles" from the WMC project, which allegedly "seeks to exploit" ideas and infrastructure owed by Alliance.
In a memorandum of law, NAMA accuses Mr. Ivanhoe "and perhaps other Greenberg Traurig lawyers" of having a "personal financial interest" in Blue Diamond. The papers fail to identify other firm attorneys who might possess a stake in the allegedly competing venture."
