Reed Smith is facing fraud claims in a $200 million suit filed in New York by hedge fund manager David Molner, who alleges in the suit that the firm, five of its lawyers and others worked together to defraud him through a bankruptcy, causing him financial and reputational losses. The firm has argued that the restructuring plan would never have been approved if the claims are true.
The firm’s lawyers, from Gibson, Dunn & Crutcher, have removed the action to the U.S. District Court for the Southern District of New York, asking for referral to bankruptcy court, where the underlying Chapter 11 was handled. The action first surfaced on Law.com’s Legal Radar.
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