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February 17, 2012 5:55 PM

Ex-Partners Argue Against Arbitration in Edwards Wildman Suit

Posted by Brian Baxter

Attorneys for former Edwards Wildman Palmer partners Lawrence Cohen and Jay Rosenbaum have responded to the firm's motion to dismiss a scandalous suit filed last month in Delaware Chancery Court.

In a 25-page brief filed Wednesday, Cohen and Rosenbaum's counsel from Eckert Seamans Cherin & Mellott argue that Edwards Wildman has no grounds to dismiss the suit and move it to arbitration, which the firm sought to do in 17-page motion filed in late January.

Cohen and Rosenbaum, who took a private client and estate-planning team with them to Nixon Peabody in November, accuse former Edwards Wildman managing partner Walter Reed of having an affair with Cohen's estranged wife, current Edwards Wildman private client partner Laurie Hall. Hall previously cochaired the firm's private client practice, but partner A. Max Kohlenberg in Boston is now listed as sole chair of the department.

The two former partners claim that Reed's affair with Hall had an adverse effect on their standing at Edwards Wildman, which was formed on October 1 via a merger between Chicago-based Wildman, Harrold, Allen & Dixon and Boston-based Edwards Angell Palmer & Dodge.

The two plaintiffs claim Reed's conduct cost them clients, money, and status at their former firm, and that Hall was allegedly put in a key negotiating role for the merger not for her legal skills, but on Reed's desire to further his relationship with her. 

Reed announced in December that he would step down as head of the 650-lawyer combined firm for personal and health reasons. Edwards Wildman confirmed in late January that strategic planning committee chair Robert Shuftan, the former head of Wildman Harrold, would take over management of the firm, along with two new deputy managing partners experienced in law firm administration, according to our previous reports.

Eckert Seamans litigation partners Francis Pileggi in Wilmington and John Talvacchia in Boston, counsel to Cohen and Rosenbaum, note that development in their response.

"Just weeks after Plaintiffs filed their Complaint, [Edwards Wildman] replaced Reed as a managing partner," the response states. "However, [Edwards Wildman], and its new managing triumvirate, continue to ratify Reed's breaches—specifically by failing to repudiate Reed's actions in [Edwards Wildman]'s response to the Complaint (which [the firm] filed jointly with Reed)."

Cohen and Rosenbaum's lawyers also claim that Reed was acting "solely for his own personal benefit," not as an agent for Edwards Wildman, when he had the purported affair with Cohen's wife.

"Not only did Defendant Reed, the managing partner of [Edwards Wildman], have an affair with Cohen's wife, but Reed also abused his power as a fiduciary in a controlling position, to advance his personal romantic interests, instead of advancing the interests of the firm," the plaintiffs' response states.

As a result, the plaintiffs argue, Edwards Wildman cannot force Cohen and Rosenbaum to air their grievances against their ex-firm in an arbitration proceeding mandated by the firm's partnership agreement.

Cohen and Rosenbaum also now claim that in his leadership role at Edwards Wildman, Reed forced the two to resign before the end of the firm's fiscal year so they wouldn't be able to collect "their share of the firm’s profits."

Terminating an employee on the basis of denying them benefits is a "violation of public policy and a breach of the employer's duty of good faith and fair dealing," according to the plaintiffs' response.

Cohen and Rosenbaum are seeking equitable relief—not contractual damages—from Reed and Edwards Wildman, which would fall outside the partnership agreement and thus beyond an arbitrator's jurisdiction, according to the pair's filing.

Edwards Wildman, which is represented by attorneys from Proskauer Rose and Delaware's Young Conaway Stargatt & Taylor, is expected to file a response of its own by February 29. Proskauer labor and employment partner Gregory Rasin did not immediately respond to a request for comment.


Related Stories:

Under New Management: Edwards Wildman Announces Leadership Change, 1/30/12

Edwards Wildman Hits Back at Allegations Over Managing Partner’s Affair, 1/27/12

Edwards Wildman Taps Proskauer to Fight Claim Managing Partner Put Fling Before Firm’s Interests, 1/18/12

 

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