The National Law Journal
By Leigh Jones
October 11, 2010
Malpractice suit against Weil Gotshal sent to state court
A bankrupt religious group and the Missouri attorney general may have finally found a home for their lawsuit against Weil, Gotshal & Manges.
The U.S. Bankruptcy Appellate Panel for the 8th Circuit on Friday reversed the dismissal of a legal malpractice action filed by the National Benevolent Association of the Christian Church (Disciples of Christ) and by the attorney general of Missouri against New York-based Weil Gotshal. The panel ruled that the bankruptcy court erred by not remanding the case to state court. The appeals court remanded the case back to bankruptcy court and directed that court to remand the case to Missouri state court.
The decision stemmed from a malpractice action that the religious group and Missouri Attorney General Chris Koster leveled against Weil Gotshal for allegedly mishandling the nonprofit organization’s bond debt during a restructuring effort. The organization ultimately filed for Chapter 11 bankruptcy in 2004. The malpractice action has bounced around from Missouri state court to bankruptcy court, to district court and two federal circuit courts.
“We’ll have a final ending some day, but we’re not there yet,” said Daniel Sheehan, an attorney representing the Christian association. Sheehan is principal of Daniel Sheehan & Associates, a Dallas firm that focuses on legal malpractice.
Weil Gotshal issued a written statement through a spokeswoman: “This case has been repeatedly dismissed and we are confident that it will be dismissed again if it returns to State Court.”
Judge Jerry Venters wrote the decision. Also on the bankruptcy panel were judges Robert Kressel and Thomas Saladino.
At one time, the association, which was based in St. Louis, employed about 3,000 workers and owned 11 senior centers.