A couple is advised on transactions concerning an $8 million investment which ends up in a foreclosure setting. The receiver, standing in their shoes, then brings suit against the couple’s attorneys. Details.
“The couple raised at least $60 million from the sale of promissory notes to at least 740 investors, Fornshell said. They used the money to buy an apartment complex, a pair of wineries, a machine shop and more than 20 rental properties.
Fornshell has liquidated about $20 million of the Schneiders’ properties, including their failed Cornerstone development on 34 acres in Parma Heights – a project that Roetzel & Andress helped the couple build.
“Roetzel & Andress could have and should have prevented this disaster,” Fornshell said. Instead, the law firm “either facilitated or willfully ignored the illicit means by which its clients were funding the project.” ”
The law firm had an incentive to promote the Cornerstone project, collecting up to $1 million in legal fees for its work on the transaction, Fornshell said.
The Schneiders also have sued Roetzel & Andress for malpractice. And last month the construction company on the Cornerstone project sued Roetzel & Andress and attorney Kenneth LaPine, accusing the firm of being aware of the couple’s scheme yet concealing it. The construction company is seeking at least $3 million in damages. The couple’s lawyer said the lawsuits are well-grounded.
“The receiver’s lawsuit is entirely consistent with our investigation of the case,” said Ian Friedman. “Now that the receiver has had the time to sniff through all of the documents, the truth is starting to unfold and reveal itself,” he said.