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Malpractice Suit Stayed Against Heller
The Recorder
April 17, 2009
The one malpractice suit that's been brought against Heller Ehrman will have to wait until things get sorted out more in the firm's bankruptcy, Judge Dennis Montali said Wednesday.
Lifelock Inc., an identity-theft prevention company, sued Heller and former partner Mary Azcuenaga in February for allegedly overbilling in defense of a suit brought by credit agency Experian.
On discovering the bankruptcy's automatic stay, Lifelock voluntarily dismissed the complaint against Heller on March 16, but kept its complaint against Azcuenaga, who now works in Baker & McKenzie's Washington, D.C., office.
In late March, Lifelock asked Montali to lift the automatic stay so it could go after Heller. Montali denied the motion on Wednesday at the urging of the creditors and the Heller estate, which argued the estate is financially strapped and can't afford to pay for such litigation.
A declaration filed by Heller's financial adviser last week says the firm only has $8.25 million and liabilities of slightly over $5 million for priority claims.
Montali said he was aware that if the Lifelock suit were allowed to proceed, Heller's response might be to file a countersuit for unpaid fees, and he hinted the two parties should settle. Lifelock can also ask to lift the stay at a later date.
