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In the court battle over the $80 million estate of legendary trial lawyer James E. Beasley Sr., a Montgomery County Orphans’ Court judge on Friday issued a ruling that dealt a significant setback to the lawyers representing The Beasley Firm, concluding that they had no standing to intervene in the case. And then the judge changed his mind. In the final five minutes of a 90-minute hearing, Judge Calvin S. Drayer declared that key phrases in the demand section of a petition filed by Beasley’s two eldest daughters show that they are asking the court to order The Beasley Firm to submit to an accounting of the value of Beasley Sr.’s pending cases at the time of his death, and turn over additional funds to the estate if an independent appraiser determines it should. As a result, Drayer decided that The Beasley Firm has the right to intervene in the Orphans’ Court case. “It seems to me, by that paragraph, you have brought them into the case,” Drayer told attorney Keith S. Erbstein, a former member of The Beasley Firm who is now with Young Ricchiuti Caldwell & Heller, and who represents the elder daughters. Erbstein said he would withdraw the claim and that he always intended to focus only on the conduct of the executors - not the law firm - but Drayer told him it was “too late” and that Erbstein’s choice of language had given The Beasley Firm standing. Drayer’s ruling was nothing short of an about-face. Just minutes before, the judge had ruled that The Beasley Firm had no standing in the case, and that the court’s only focus should be on the conduct of the two co-executors of the estate, James Beasley Jr. and Pamela Beasley. The judge’s patience had seemed to be wearing thin as The Beasley Firm’s lawyer, Timothy T. Myers of Elliott Greenleaf & Siedzikowski, repeatedly argued that the firm had a valid interest in the case. Drayer disagreed, saying Erbstein was “exactly right” that the focus of the litigation should be on the decisions made by James Beasley Jr. as a co-executor and not on his role as head of the firm after his father’s death. “There’s nothing here that is being requested from The Beasley Firm,” Drayer said. But when the lead lawyer for the executors, Hara K. Jacobs of Ballard Spahr Andrews & Ingersoll, pointed out the language in the demand section of Erbstein’s petition, the judge retired to his chambers for a few minutes and emerged with a new ruling. Drayer focused on a single paragraph in which Erbstein demanded that James Beasley Jr., as the sole member of The Beasley Firm to hold Class A shares, be ordered to “pay to the estate, on behalf of The Beasley Firm, the full value” of James Beasley Sr.’s interests in his cases. Seeing such explicit language that put the firm’s potential liability at issue had changed his mind, Drayer said. Friday’s hearing sets the stage for another hearing, yet to be scheduled, on the issue of whether Erbstein should be disqualified because of an alleged conflict of interest stemming from his own lawsuit against The Beasley Firm. As a result, it’s likely to be several months before the court reaches the explosive allegations lodged by the elder sisters in their petition. They accuse their younger half-siblings of abusing their positions to drain money from the estate. The court battle pits the two daughters from James Beasley Sr.’s first marriage against the son and two daughters from his second marriage. In the petition, Nancy Beasley and Lynn Hayes are demanding that James Beasley Jr. and Pamela Beasley be removed as co-executors, alleging that they have “conspired” to reduce the value of their father’s estate by transferring assets to their mother, Helen Beasley, “so that at the time of her death those assets will pass through her estate” and be divided only among her three children instead of giving a 20 percent share to all five children. In an interview at the time the petition was filed, James Beasley Jr. insisted that there is no merit to any of his sisters’ claims and that he expects to be cleared of any wrongdoing in court. Under the terms of his father’s will, he said, the five children will receive their inheritances only after the death of Helen Beasley. Until then, he said, most of the funds remain in trust to provide an income for her. But the elder sisters allege in their petition that the size of the trust has dwindled significantly because the younger siblings, using their power as co-executors, have set out to enrich their mother and themselves. Among the many allegations, the elder sisters claim that four airplanes worth $5 million and owned by James Beasley Sr. were sold by James Beasley Jr. to himself for an unsecured note of about $1.8 million. They also claim that funds from the “residuary estate” were improperly used to buy a $1.5 million condominium in Boston for Helen Beasley. The elder sisters have also objected to the calculation of the value of James Beasley Sr.’s pending cases, claiming that the firm’s operating agreement called for an “assessment” of the value of those cases upon his death, but that James Beasley Jr. instead decided to follow a “pay-as-you-go” method in which his father’s estate is compensated for the cases as each one is finalized. It was that allegation that led The Beasley Firm to hire a team of lawyers from Elliott Greenleaf to intervene in the case. So far, the team from the Elliott firm has been joining forces with the team from Ballard - led by Jacobs and including Beverly R. Budin and Adam Finkelstein – in moving to have Erbstein disqualified from the case. The Ballard team argued in court papers that the “only interest” Erbstein represents “is his own,” and that Erbstein was “fired” from The Beasley Firm in November 2005 and “has since waged a bitter course of litigation against The Beasley Firm” and James Beasley Jr. in order to avoid paying the firm more than $1 million he allegedly owes. As a result, the motion alleges, Erbstein suffers from a conflict of interest because “simply put, every dollar that Erbstein wins for himself in his personal litigation is a loss of funds for the estate and ultimately a loss of funds for Erbstein’s clients.” At the time the motion was filed, Erbstein said in an interview that he was “confident” that he will not be disqualified from the case because “there is no conflict.” •

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