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The owner of the 101 California building is suing the plaintiffs firm formerly known as Wartnick, Chaber, Harowitz, Smith & Tigerman for $1.67 million after the firm moved out with more than a year left on its lease.

Formed in 1995, Wartnick, Chaber was known for tobacco and asbestos cases and at its peak was one of the largest plaintiffs firms in Northern California. But less than two years after it signed a five-year lease in December 1999, the firm decided to close. Deep into the process of shutting its doors and with many partners and employees having already moved on, the firm stopped paying rent last year.

The landlord, 101 California Venture, also accuses the firm — now known as The Wartnick Law Firm — of a conspiracy to fraudulently transfer corporate assets, claiming that some firm lawyers took cases with them after they left without paying “reasonably equivalent value” to the old firm. The plaintiffs have not yet aimed that accusation at specific lawyers, according to the complaint filed Wednesday.

The firm announced in the fall of 2001 that it would shut down after Harry Wartnick decided to reduce his participation due to health reasons. Wartnick stayed on until his death to wrap up unresolved cases.

Partners Steven Harowitz and Stephen Tigerman are the managing liquidating partners for Wartnick. The old firm isn’t taking new business, just resolving existing cases. Harowitz and Tigerman have started their own San Francisco litigation shop.

The defendants so far named in the case — the firm as well as Harowitz and Tigerman — vehemently deny any allegations of improperly transferring work, said their lawyer, Paul Warner of Los Angeles-based Jeffer, Mangels, Butler & Marmaro.

“Those allegations are strongly denied,” said Warner, who heads his firm’s San Francisco litigation department. He added that the landlord could have no knowledge of the financial arrangements between clients, The Wartnick Law Firm and any firms that got cases when Wartnick partners left because that information is confidential.

It would be unethical for the partners to bilk their old firm out of fees the firm is due, Warner said, “and my clients are very ethical.”

Warner added that Wartnick, who was in charge of the old firm’s liquidation before his death in July, would never have agreed to an unfair allocation. “It was against his financial interests. Harry would not have allowed it, nor would he have had any incentive to do it.”

Warner said he won’t dispute that the lease expires at the end of January 2005, nor that the firm is no longer paying rent.

“What is disputed is whether any rent is owed or how much rent is owed,” Warner said, questioning if the landlord tried to rent the property to someone else after the firm moved. “If they can rent it for half of what the Wartnick firm is paying, that reduces the exposure for the Wartnick firm.”

A lawyer for the landlord could not be reached for comment Monday.

A judge would likely exercise discretion to determine what’s fair, said Thelen Reid & Priest partner Jay Margulies, who headed the wind-down committee for Pettit & Martin when it decided to close down in 1995 after a shooting spree at 101 California St.

Pettit and the lawyers who took its cases split fees based on the hours each had put into a case, with Pettit getting paid first, Margulies said.

“When you get to contingency fee litigation, it’s much messier,” Margulies said. “It’s clear that it doesn’t all belong to the new firm, but there are about a million ways to divide that pie.”

The landlord is seeking $1.67 million for rents and other charges under the lease plus punitive damages.

The complaint also says the firm got settlement fees from an asbestos case against Western MacArthur Co. That company has since gone bankrupt, and a bankruptcy judge has ordered the firm to return those fees to Western MacArthur’s bankruptcy estate. That order is being appealed.

The landlord wants injunctions to prevent Harowitz and Tigerman from using any of the firm’s assets to pay back the fees until they have exhausted efforts to get restitution from settlement funds distributed to current or former partners, according to the complaint.

“I do not believe that there have been any distributions of profit to shareholders,” Warner said, saying the partners have only gotten modest salaries for their liquidating work since Wartnick’s death. “I don’t know precisely when any money came in from Western MacArthur, so I can’t speak to that.”

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