The Butler Snow law firm and the firm’s founder and CEO, Matt Thornton, have moved to force arbitration in response to the claims brought by Alysson Mills, the court-appointed receiver for admitted Ponzi schemer Arthur Lamar Adams and his company, Madison Timber Properties.
Meanwhile, Butler Snow, in a statement, is denying the allegations and downplaying its connection to Adams and his disgraced business.
Mills’ lawsuit, filed Dec. 19 in Mississippi federal court, targets Butler Snow, its advisory arm, its CEO, as well as Am Law 100 firm Baker, Donelson, Bearman, Caldwell & Berkowitz; Brett Alexander, a senior public policy adviser and lobbyist in Baker Donelson’s Jackson, Mississippi, office; Jon Seawright, an attorney and shareholder in the Jackson office; and Alexander Seawright LLC, an investment vehicle run by the latter two individuals.
Mills, an attorney in the New Orleans office of Fishman Haygood, and her colleague Brent Barriere claim the defendants played an active role in finding investors for Adams’ Ponzi scheme and induced them to put money into the scheme under the belief that it had the imprimatur of a respected law firm (Baker Donelson).
Adams has pleaded guilty to wire fraud and was sentenced to 19.5 years in prison in October.
The Butler Snow defendants, in a Thursday statement, vigorously denied any wrongdoing.
“Many of the claims made in the complaint infer that we were deeply involved with Adams. These claims are simply not true,” the statement said, adding that Adams hired the Butler Snow law firm on only two occasions, in 2009 and 2012, and that the work the firm performed in those engagements was unrelated to the Ponzi scheme.
On those occasions, the statement asserts, the law firm was merely asked to prepare documents for a proposed timber investment fund. According to the firm’s statement, the projected fund had nothing to do with the actual Ponzi scheme, which depended on loans backed by the deeds to tracts of timber.
In the end, Adams declined to make use of the fund for which Butler Snow had drafted documents, the statement said, and the law firm received a total of $28,428 for the two engagements, the latter of which did not last beyond 2013.
The statement further asserts that Adams hired the law firm’s advisory arm only once and the performance of these advisory tasks also ended in 2013. Those services netted $99,250, with most of the money coming through a monthly retainer and not from any specific deal, Butler Snow said.
“From day one, we have cooperated with the receiver and other authorities, sharing all information requested. We remain concerned for the victims of Adams’ fraud who lost money, including some of our own attorneys and their families,” the statement reads.
Butler Snow’s motion to compel arbitration, filed Thursday, repeats the claims from its statement and argues in favor of dismissing or staying the legal proceedings pending arbitration. The firm noted that its engagement contract with Adams contains an arbitration provision in the event of legal disputes.
The firm’s filing further claims that the arbitration agreement applies to all the defendants, not just its advisory firm, and is binding on the receiver.
But, in an interview, Barriere of Fishman Haygood denied that the receiver is bound by agreements antedating the receiver. He asserts that the engagement letter is only between Butler Snow Advisory Services and Lamar Adams. Moreover, the parties signed a letter specifying that the federal and state courts in Jackson would be the forum for disputes that might arise, he said.
Barriere said that the motion to compel arbitration is without merit, and he expects the matter to go to trial soon.
“I don’t think there’s any basis for compelling arbitration. The document, on its face, doesn’t compel it. We fully anticipate that we’ll be proceeding in the federal district court,” Barriere said in the interview.
In an email to The American Lawyer, Mills said, ”I think the complaint still speaks for itself and we look forward to litigating it in court.”