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In a dispute over how to divide the assets of a dissolved law firm when nearly all the firm’s clients have elected to remain with one partner, a Manhattan judge has found that the other partner is entitled only to half the value of contingency fees at the date of the breakup. The ruling from New York Supreme Court Justice Herman Cahn came despite an agreement between the two partners at Greco & Gottlieb to split all cases 50-50 in the event of dissolution. Since the firm broke up in 2000, the partners had fought over the validity and meaning of the agreement and how to divide fees from pending cases once those cases were resolved. When Robert S. Gottlieb left Greco & Gottlieb to join New York-based Goldstein, Goldstein, Rikon & Gottlieb, most of the firm’s clients went with him. Included were about 120 contingency cases in the area of eminent domain. Michael J. Greco, who had been partner with Gottlieb, claimed that the contingency fees should be split equally, pursuant to a partnership agreement that stated cases would be allocated on a 50-50 basis if the firm was dissolved one day. Gottlieb countered with the current action, arguing that his new firm was entitled to a portion of the fees attributable to its post-dissolution work. He also said the agreement’s method for dividing fees was void as against public policy, since it would deprive clients of their choice of counsel. Greco, he claimed, was entitled only to the value of the contingency fees when the firm split up. In Gottlieb v. Greco, 604978/00, Justice Cahn agreed with Gottlieb, finding that when a settlement or disposition of a pending contingent fee case is the result of a surviving partner’s post-dissolution efforts, the dissolved firm has no property interest in the fee. The judge also chose to construe the partnership agreement as a method of dividing fees, which, he said, would raise no public policy issues. “If [the agreement] were read to determine a division of cases, without giving the client the ultimate choice of attorney, it might well be against public policy,” the judge wrote. The judge also denied Greco’s request that the dissolved partnership’s accounts be transferred to an independent trustee who would receive and disburse sums with notice to the parties. Comparing the request to one that would be made by a receiver, the judge wrote that Greco had not “demonstrated the requisite need for this extreme remedy.” Nicholas R. Caputo of New York-based Robinson Brog Leinwand Greene Genovese & Gluck represented Gottlieb. John W. McConnell of New York-based Wachtel & Masyr represented Greco.

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