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DALLAS-Lawyers Fred Baron and Lisa Blue, who sold their equity interest in Baron & Budd to shareholder Russell Budd in 2002, filed a breach of contract suit on Aug. 3 alleging that Budd, the firm and others conspired to deny them payments due under the sale contracts. The defendants in Fred Baron v. Baron & Budd, filed in Dallas County Court-at-Law No. 3, include the Dallas-based toxic tort firm; Budd, the firm’s president and majority shareholder; Steve Baron, a shareholder in Baron & Budd and a partner in Dallas firm Silber Pearlman; Brian Lidji, a partner in Lidji & Dorey of Dallas; and LeBlanc Waddell, a firm in Baton Rouge, La. As alleged in the original petition, Baron & Budd is the managing partner of Silber Pearlman, and it owns 98% of LeBlanc Waddell. All three are plaintiffs’ firms. Baron and Blue, who are married, sold their shareholder interest in Baron & Budd to Budd in December 2002. In return, they allege, they received “certain payments and notes, as well as the right to future payments and other benefits” and a 15% limited partnership interest in Silber Pearlman. But Baron and Blue allege in the petition that the defendants took steps to deny them rights under various agreements related to the sale, intentionally “dismantled and devalued” Silber Pearlman, and refused to pay Baron for certain services for Baron & Budd, a firm Baron founded in 1977. Multiple allegations In the four-page petition, Baron and Blue bring numerous causes of action against the defendants, including breach of contract, breach of fiduciary duty, conspiracy to breach fiduciary duty, tortious interference, conspiracy to tortious interference, fraud or alternatively negligent misrepresentation, conspiracy to fraud, fraudulent transfer, conversion, legal malpractice, negligence, unjust enrichment, and alternatively promissory estoppel or quantum meruit. Defendants Budd, Steve Baron (no relation to Fred) and Lidji referred comment to defense lawyer Robert Walters, a partner in the Dallas office of Houston-based Vinson & Elkins. “We disagree with the claims that Fred has made in the lawsuit, but the firm continues to try to pursue an amicable resolution,” he said. In an answer filed on Aug. 8, the defendants deny the plaintiffs’ allegations. “Plaintiffs’ claims are an effort to obtain additional retirement benefits that derive from legal fees in asbestos cases, many of which are pending in MDL Docket No. 875,” the defendants allege in the answer. MDL-875, In re Asbestos Products Liability Litigation, is pending before federal Judge James T. Giles in the Eastern District of Pennsylvania. The defendants allege in the answer that Baron and Blue sold their stock in Baron & Budd to Budd in exchange for retirement benefits and cash “for personal, business and political reasons, and with asbestos litigation under attack on the federal and state levels.” The defendants allege in the answer that Baron began to “complain” about the retirement packages in 2006, after receiving 100% of cash retirement benefits to date and about 70% of the total cash retirement benefits specified in the 2002 agreement.

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