The Pennsylvania Superior Court has reinstated a $500 million malpractice suit against K&L Gates and accounting firm Pascarella & Wiker for their alleged failure to detect fraudulent activity at the now bankrupt Le-Nature’s when the firms conducted an internal investigation of the company years before the bankruptcy.
A three-judge panel led by Judge John L. Musmanno overturned an Allegheny trial court’s ruling in Kirschner v. K&L Gates and instead found K&L Gates did have an attorney-client relationship with Le-Nature’s and not just the special committee that hired the firm to investigate allegations of fraud. The court also found Le-Nature’s suffered actual damages and that they, as according to the facts pled in the complaint, were proximately caused by K&L Gates’ actions.
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