A plaintiff who alleged Conrad & Scherer reneged on a nearly $20 million debt won summary judgment Thursday on several claims against the Fort Lauderdale, Florida-based firm.
Former client-turned-lender Douglas Von Allmen will ask the court next week to appoint a receiver for Conrad & Scherer — a move that would remove financial control from the firm’s hands. His lawyers are gearing to argue at a June 19 hearing that the firm won’t be able to repay Von Allmen and still remain in business.
“We have a security interest in all the firm’s account receivables,” plaintiffs counsel Jonathan Feldman said. “When we enforce that security interest, the firm is not going to have the availability to fund day-to-day operations.”
But before the litigants reach that argument, Broward Circuit Judge John J. Murphy III must determine damages against Conrad & Scherer, which claims Von Allmen has an unpaid debt of “$2 [million] to $3 million easily” in unpaid legal fees.
“We respect Judge Murphy very much, (but) we don’t agree with the decision,” Conrad & Scherer’s defense counsel Albert L. Frevola Jr. said. “We think that there are a lot of disputes as to what the actual facts are. … All the court found is that money is owed, but the court hasn’t yet determined how much money is owed.”
The firm denied any liability, arguing Von Allmen and the firm’s founder, prominent litigator William Scherer, made several oral modifications to the loan agreements when the two men shared a yearslong friendship. It now questions Von Allmen’s motives, suggesting the former client is intent on striking a lethal blow to the company and its founder.
“It’s apparent the Von Allmens and their lawyers have been taking the steps to destroy the firm, which makes no sense,” Frevola said. “If they’re really owed the money, why would they want to destroy the firm?”
Von Allmen filed suit in 2017 alleging he loaned millions to the firm to fund litigation against convicted Ponzi schemer and former law firm chairman Scott Rothstein and to launch a national human rights practice. He asked the court to enter judgement for breach of promissory notes, breach of guaranty and to enforce a security agreement.
Von Allmen also claimed his loan funded human rights cases against multinational companies — a venture that has brought negative attention to the firm. Former Conrad & Scherer partner Terrence Collingsworth allegedly paid witnesses to change their testimony in a case accusing Alabama coal conglomerate Drummond Co. of conspiring to kill labor activists in Colombia.
If Von Allmen gets what he wants — including interest, attorney fees and court costs — the judgment could reach $25 million.
But Conrad & Scherer said it was well capitalized.
“‘The firm’s going to continue,” Frevola said. “There are assets that the firm has that exceeds any money owed to Mr. Von Allmen.”
A hearing on June 19 will determine next steps in the litigation.
“The judge granted all the relief we requested,” said plaintiffs counsel Feldman, a partner in Perlman Bajandas Yevoli & Albright’s litigation practice. “Now that liability has been established, it’s now just a mathematical calculation as to what is owed.”
Read the ruling: