In an unusual spin-off of the messy bankruptcy of retailer Merry-Go-Round Enterprises, Ernst & Young filed a $185 million suit in Baltimore City, Md., Circuit Court against Swidler Berlin Shereff Friedman, the District’s 19th largest law firm.
Last year, the accounting giant paid out $185 million to Merry-Go-Round’s bankruptcy trustee to settle a negligence and fraud case growing out of Ernst & Young’s role as consultant to the bankrupt firm. That suit alleged that Ernst & Young handled that assignment so poorly that in March 1996, the Baltimore-area clothing retailer was forced to end a Chapter 11 reorganization that might have kept it alive and instead enter liquidation.
