NEW YORK, May 11 (Reuters) - A former client of Jackson
Walker has filed a $6.26 million malpractice action against the
In a suit filed in the District Court of Harris County,
Texas, businessman Larry Hargrave alleged that Jackson Lewis
attorneys put their own financial interests first while
representing him in a 2007 business deal that went awry.
Hargrave also claimed that Jackson Walker left him to represent
the interests of a business rival in the same matter.
The lawsuit further asserted that Jackson Walker partners
Lawrence Waks and Steven Jacobs and former Jackson Walker
attorney Jeffrey Johnson pushed Hargrave out of his own company
and switched allegiances to a client with deeper pockets.
"They left him hanging," said Hargrave's lawyer Robert
Jackson Walker partner Patrick Cowlishaw said in an
e-mailed statement that Hargrave's claims were "meritless."
Hargrave was the chief executive officer and sole
shareholder of American Rig Housing, which provided temporary
housing for workers on land-based oil rigs. The company hired
Jackson Walker, a 300-lawyer firm, to help it acquire smaller
companies in preparation for an initial public offering that
would require about $12 million in financing.
In an attempt to get the financing, American Rig entered
into a funding agreement with investment company Acer Inc.
According to the lawsuit, Acer was unable to raise the
necessary capital. On the advice of a consultant, Mark
Harrington, American Rig then reached an agreement with another
investment firm, Andrew Garrett, to obtain funding.
Under the IPO plan a new company called Best Energy
Services, headed by Hargrave, purchased the assets of American
Rig and two smaller companies.
After Best was formed, Acer sued Best, American Rig and
Hargrave for allegedly breaching the first financing agreement
and for using Andrew Garrett, the other financing firm, in the
deal instead. Jackson Walker was retained to represent Best
Energy, Hargrave and American Rig in defending the action.
Hargrave's lawsuit, filed on Wednesday, alleged that as the
Acer litigation loomed and as Best Energy's finances suffered
in 2009, Jackson Walker began working in concert with
Harrington to remove Hargrave and two others from the Best
Hargrave alleged that Jackson Walker breached its
fiduciary duty by making him and American Rig liable in a
settlement with Acer and by representing Harrington and Best
Energy at the same time.
"By conspiring behind the scenes with Harrington to have
Hargrave removed as CEO of Best, the Jackson Walker lawyers
failed to act with absolute perfect candor, openness, and
honesty, and without any concealment or deception towards
Hargrave," he claimed.
The case is Hargrave v. Jackson Walker, Harris County
District Court, No. 2011-28056.
(Reporting by Leigh Jones)