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Two days after announcing plans to merge with Boston’s Ropes & Gray, New York intellectual property boutique Fish & Neave has been sued by its former managing partner and another former partner for breach of contract and breach of fiduciary duty. In a suit filed Wednesday in Manhattan Supreme Court, W. Edward Bailey, who served as managing partner of Fish & Neave between 1994 and 2000, and Kevin J. Culligan, who was on the firm’s management committee, claim they are owed $2.4 million in unreturned capital and unpaid compensation. The pair, now partners in the New York office of Atlanta’s King & Spalding, are also seeking to enjoin Fish & Neave from transferring disputed assets to Ropes & Gray until their matter is resolved. Such an injunction would not necessarily prevent the merger from proceeding, said Jeffrey A. Jannuzzo, the attorney suing Fish & Neave on behalf of Bailey and Culligan. He said the firms would be able to proceed with their combination if they set aside sufficient funds. “It is not our intention to derail their merger,” he said. The two firms said Monday the merger would become effective Jan. 1, with the combined firm operating under the Ropes & Gray name. Jesse J. Jenner, the chairman of Fish & Neave, said Wednesday he had not yet seen the lawsuit and declined to comment on the matter. Bailey and Culligan, who left the firm earlier this year, claim the firm sought to amend its partnership agreement in May in order to financially penalize partners who left the firm. According to the two former partners, the amendment was designed to permit the firm to defer payment of accrued income to ex-partners until they turned 65. It also purportedly allowed the firm to delay for several years repayment of ex-partners’ capital contributions. The ex-partners claim the amendment is not effective because the firm’s partners did not unanimously vote for it. The original 1970 partnership agreement contains no provision for amendment, but Bailey and Culligan argue that, under general partnership law, acts contravening the original agreement must be unanimously approved. They also note that all previous amendments to the partnership agreement have been by unanimous consent. Under the original agreement, Bailey and Culligan claim, accrued income must be paid to a withdrawn partner as soon as it can be ascertained. Likewise, capital contributions must be returned at the end of the year. Bailey claims he is owed $565,436 in capital and $681,381 in income. Culligan claims he is due $291,215 in capital and $836,857 in income. Such disputes between former partners and their firms have become more common in recent years as firm mergers and partners’ lateral moves have become more frequent. Jannuzzo previously represented four former partners at Whitman, Breed, Abbott & Morgan who sought the return of their capital contributions following that firm’s merger with Chicago’s Winston & Strawn. The partners in that case also challenged amendments to the partnership agreement regarding capital return. Last year, a Manhattan appellate court ruled that the four partners were entitled to the return of their capital contributions.

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