It may be a sign of the new economic times, or it may simply be a new trend, but legal malpractice cases are increasing in the bankruptcy setting. NY Lawyer reports a fraudulent concealment – legal malpractice case by the trustee against an attorney and firm today.
"In In re Food Management Group (Grubin v. Rattet), 04-22880, Judge Martin Glenn ruled that allegations of fraudulent concealment, breach of fiduciary duty, negligence and fraud on the court could proceed against attorneys Robert L. Rattet and Jonathan S. Pasternak, as well as the law firm Rattet, Pasternak & Gordon Oliver.
The lawyers and the firm are accused of failing to disclose that an "insider" of debtor Food Management Group had violated a court order by submitting a bid in the auction of the company’s assets.
The trustee also alleged that the lawyers improperly failed to disclose that they had represented one of the insiders before the auction.
Judge Glenn said that if the allegations are proven, the attorneys and their firm engaged in "serious wrongdoing."