At least four lawyers and law firms are among the top creditors of Masry & Vititoe, the personal injury law firm of "Erin Brockovich" fame that filed for Chapter 11 bankruptcy protection on Aug. 14.
The firm, based in Westlake Village, Calif., said in bankruptcy court papers that it has spent $3 million defending lawsuits filed by the family and estate of former name partner Edward Masry, who died in 2005.
"Not only did a number of litigants come forward alleging that Mr. Masry had promised them certain assets and cash from the firm, additionally, his own estate and heirs instituted claims which have caused the firm to spend its resources, in time and staff, defending such claims," the firm said in an Aug. 24 motion seeking cash collateral in order to keep operating.
The firm declared monthly expenses of more than $670,000 -- including payroll and client expenses associated with existing and impending cases involving airplane crashes. The firm is spending $50,000 per month for travel associated with litigation stemming from a tour bus accident in Arizona that killed seven Chinese nationals and injured another 10 people earlier this year.
A hearing on the firm's cash flow is set for Sept. 9, said Leslie Cohen of Leslie Cohen Law in Santa Monica, Calif., bankruptcy counsel to the firm.
"In the meantime, business will continue as usual," Cohen said in an e-mailed statement. "Clients will feel absolutely no impact from the Chapter 11 process. All lawyers and employees will be retained, with no reductions in pay, no layoffs, and no furloughs. The firm's top management team is in place and unchanged."
James Vititoe, name partner of the firm, did not return a call for comment.
Several lawyers and law firms are among the firm's top 20 creditors, according to bankruptcy court documents.
Joseph DiNardo of The DiNardo Law Firm in Williamsville, N.Y., has claimed that he is owed $650,000 for advising Masry & Vititoe in its representation of the families of victims from plane crashes that occurred outside the United States. DiNardo also teamed with Masry & Vititoe on a failed venture with a personal injury firm in Mexico called Servicios Legales de Meso America, or SLM.
"There was going to be an ongoing relationship, and Jim was going to be the national counsel for SLM, but it just didn't work out," DiNardo said, referring to Vititoe. "It wasn't a good investment opportunity."
DiNardo and Masry & Vititoe filed suit against SLM in 2008. The parties have since settled, and Masry & Vititoe should receive a note in the near future for $4 million, DiNardo said.
Richard Robins, a partner in Parker, Milliken, Clark, O'Hara, Samuelian in Los Angeles, has claimed nearly $567,000 in attorney fees. Another lawyer, Scott Wert of the Law Offices of McCurdy & McCurdy in Grand Prairie, Texas, which has worked with Masry & Vititoe on environmental cases in Texas, claimed $200,000 from a loan to the firm.
Robins and Wert did not return calls for comment.
Carpenter & Zuckerman, a law firm in Beverly Hills, Calif., had two claims totaling $75,000 for unpaid settlements in recent cases against Masry & Vititoe. One stemmed from a legal malpractice lawsuit against the firm that settled on June 8, said John Carpenter, a partner at Carpenter & Zuckerman. The other was a breach of contract claim that settled the same week that Masry & Vititoe filed for bankruptcy protection, he said.
"Personally, I think that they'll reorganize and we'll get paid," he said. "They say they hope to be out in 30 days. My experience in bankruptcy is it takes longer than that."
Brockovich, who had been a paralegal at Masry & Vititoe, no longer works there. While at the firm, she helped obtain a $333 million settlement from Pacific Gas & Electric Co. in 1996 on a claim that the utility exposed residents of Hinkley, Calif., to contaminated drinking water. The 2000 movie, "Erin Brockovich," was based on that case.
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Lawyers and Firms Stake Claims in Masry & Vititoe Bankruptcy
The National Law Journal
August 28, 2009
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Paralegal #1
Author perpetuates the persistent falsehood re Erin. Let me clarify once and for all:
ERIN BROCKOVICH IS NOT NOW, NOR HAS SHE EVER BEEN A PARALEGAL.
She is a file clerk Ed hired because of her "assets". She has no training, no education, and has never been anywhere close to being qualified as a paralegal.
Those of us who helped create the profession, set standards for education, and fought for recognition on a national level are DEEPLY resentful of posers on all levels.
We respect M&V for blackmailing PGE into settling, but STOP CALLING ERIN A PARALEGAL!
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