Gary LeClair wants bankruptcy trustee’s lawsuit against him dismissed
Gary LeClair pushes back allegations that he conspired to profit from it and is to blame for the collapse of his namesake law firm.
The co-founder and longtime executive of the late Richmond legal giant, LeClairRyan, last month called for a blanket dismissal of more than a dozen charges brought against him by the trustee overseeing the bankruptcy liquidation of the firm of ‘lawyers.
The trustee, Lynn Tavenner, seeks to reject responsibility for the disappearance of the company and to recover the damages to be returned to the pool of creditors.
In an amended complaint filed in August, she described LeClair and legal services firm UnitedLex, respectively, as “a deceptive law firm” entrepreneur “conspiring with an opportunistic” global corporate legal services provider “… to manipulate a law firm for their own benefit and benefit. “
But LeClair, in his Sept. 27 motion for dismissal, said the allegations “defy human nature and logic and are simply false.”
“Over 94 pages and 558 paragraphs of allegations, the amended complaint contains dozens of false and misleading statements attempting to fabricate a conspiracy involving (LeClair), the purpose of which was to destroy LeClairRyan PLLC – the (LeClair) firm founded, argued his name to and invested in personally, professionally and financially for over 30 years, ”states LeClair’s record.
His call for dismissal includes counts of conspiracy, breach of fiduciary duty, unjust enrichment and restitution of certain funds the company paid him before his bankruptcy in the summer of 2019.
LeClair’s arguments for the dismissal rest primarily on his claim that Tavenner’s claims lack legal basis.
He also argues that certain claims are excluded by a receipt he received from the company before his departure, as well as by the limitation period.
While the Tavenner case tells a story of LeClair pulling strings with UnitedLex behind the scenes, LeClair claims he didn’t have such power in the company’s later years – and, therefore, had no such power. fiduciary duty to the company as it collapsed.
LeClair founded LeClairRyan with Dennis Ryan in Richmond in 1988. LeClair was CEO of the company from its inception until June 2011, proclaiming that his tenure was marked by “disciplined financial management …”
After resigning as CEO in 2011, he relinquished other responsibilities by stepping down as chairman of the board in 2015. He also claims that he had no signing authority or staff in as chairman and was not an officer or board member after leaving the board completely. in January 2016.
“Although (LeClair) remained a shareholder, he had no management authority or leadership role. “
Tavenner claims LeClairRyan was insolvent as of 2014 and has only been profitable for a year since 2011. The trustee’s lawsuit refers to emails purported to show LeClair’s involvement in the business of the company until in some of his last days, despite alleged efforts to cover up such activity. He eventually left the company just before it collapsed, joining downtown rival Williams Mullen.
LeClair remains a partner at Williams Mullen and is represented in bankruptcy cases by attorneys Scott Sexton and Andrew Bowman of Gentry Locke, as well as Bill Broscious of Kepley Broscious & Biggs. LeClair and his legal team declined to comment beyond what is stated in court documents.
Tavenner is seeking to recover more than $ 3 million in so-called fraudulent transfers LeClair received from the company in the five years leading up to its collapse.
LeClair maintains that much of this money was owed to him through various compensation plans. He also filed a claim as a creditor with the bankruptcy estate for $ 2.44 million.
The trustee’s claims may also seek to trigger insurance payments from policies LeClairRyan allegedly had in place to cover officers and directors.
Tavenner’s claims relate to an ill-fated joint venture between LeClairRyan and UnitedLex called ULX partners, which was carried out in the law firm’s last few months. This partnership, designed to reduce costs by outsourcing LeClairRyan’s administrative tasks to ULX, is believed to have contributed to the loss of the law firm.
Tavenner first sued UnitedLex in 2020, claiming $ 128 million in damages alleging the ULX plan was a conspiracy to hijack millions from the 30-year-old law firm as it faltered toward the collapse.
She added LeClair to the case in August, arguing that he had conspired with both UnitedLex and that company’s CEO, Daniel Reed, to keep LeClairRyan alive longer than necessary for their own benefit.
Tavenner is also continuing his legal fight with dozens of former LeClairRyan shareholder partners.