Former ProTrader Owners Settle Legal Malpractice Lawsuit
(PRLEAP.COM) AUSTIN — Four former owners of an Austin-based electronic trading and software development company have settled their legal malpractice lawsuit against the law firm of Vinson & Elkins, LLP, over legal advice provided during the buyout of a former partner. The former owners were represented by Daniel W. Bishop and Joseph F. Brophy of Bishop London Brophy Dodds, P.C.
Andy Kershner, David Burch, David Jamail and John McEntire were the former owners of ProTrader Group LP. In 1999, the group began looking for a buyer for the company. Unable to locate a buyer by March 2000, former ProTrader executive Russell Grigsby asked the owners to buy out his interest in the company.
In May 2000, Mr. Grigsby agreed to a buyout worth approximately $12 million for his minority interest, signing a binding letter of intent prepared by Vinson & Elkins. During the period after Grigsby’s departure, ProTrader made significant investments in its people and technology in an effort to attract a Wall Street partner. This was accomplished with the sale of the company to New York-based Instinet Group Inc. (NASDAQ: INGP) in October 2001. After the sale of ProTrader, Mr. Grigsby filed suit against the former owners, seeking a piece of the $150 million sale price.
Firmly believing themselves and relying on advice from Vinson & Elkins that Mr. Grigsby had no claim to money from the sale, the former owners declined to honor his demands. An arbitration panel later disagreed, awarding Mr. Grigsby $43 million.
After the arbitration ruling, the former owners filed a legal malpractice suit against Vinson & Elkins. The case was sent to mediation, and was settled for an undisclosed amount in August 2005.
“We firmly believed, based on our lawyers’ advice and the signed buyout contract, that Russell Grigsby had no stake to the proceeds from the sale of ProTrader,” says Andy Kershner, former ProTrader owner and currently the chairman of Zone Trading Partners, LLC, an Austin-based securities trading company. “We’re glad this settlement has resolved this dispute, and we’re anxious to move forward