By Nate Raymond
Oct 3 (Reuters) - The law firm of Willie Gary, the
flamboyant Florida lawyer known for winning several
multimillion-dollar verdicts, has been ordered to pay a
litigation finance company $12.5 million.
The ruling by U.S. District Judge David Hurd in Albany, New
York, on Friday in favor of an affiliate of LawFinance Group Inc
adds to the financial difficulties facing Gary and his law firm,
Gary, Williams, Lewis & Watson. The judgment is against the law
firm, Gary and one of his partners.
Over the last two years, seven partners have departed the
small firm amid lawsuits by several creditors, including the
affiliate of LawFinance, which makes loans to plaintiffs' firms
pursuing cases on a contingency-fee basis.
The affiliate, LFG National Capital, sued Gary Williams in
2011, claiming that since 2009 it was in default on loans
intended to help finance the firm's contingency-fee cases. Gary
and his partner, Lorenzo Williams, personally guaranteed the
loans.
Gary and his law firm had countered that the loans carried
excessively high interest rates. But after Hurd dismissed those
counterclaims on July 12, Gary in court papers said he was left
with "no good faith defense" against LFG's arguments that his
firm breached the loan agreements.
Scott Balber, a lawyer for LFG at Chadbourne & Parke, did
not respond to a request for comment.
A spokeswoman and lawyer for Gary did not respond to a
requests for comment. Gary did not respond to an email seeking
comment.
Gary, who lives in Stuart, Florida, won several large
verdicts over the years, including a $500 million verdict
against the funeral chain The Loewen Group in 1996 and a $240
million verdict against Walt Disney in 2000.
In 2010, he was co-counsel on a $55 million settlement with
a unit of Amway Corp in a class action accusing it of operating
a pyramid scheme. He is one of several plaintiffs' lawyers
pursuing lawsuits against the National Football League alleging
that it failed to inform players of the risks associated with
head traumas.
Gary, known for a lavish lifestyle that includes luxury cars
and jets, has said his firm got itself heavily in debt during
the boom years and fell into hard times during the recession.
Lawsuits by creditors including LFG followed.
"The last two to three years have been just tough economic
times for the world, and our law firm is no exception," Gary
told Reuters in July. "We've been working our butts off to
weather the storm."
A separate lawsuit by General Electric Capital against Gary
and his firm over the default of a loan to finance a Boeing 737
owned by Gary is pending in Manhattan federal district court.
The plane, called the "Wings of Justice II," is depicted on
Gary's website as having a bedroom, kitchen, leather seats and
an 18-karat-gold sink. GE is seeking $3.59 million.
The LawFinance affiliate appears to be the biggest creditor
to sue Gary. LawFinance, an alternative litigation finance
company, advertises that it provides loans ranging from $25,000
to $25 million to attorneys and their clients.
In a motion filed Aug. 24, LFG said past audits of Gary
Williams had shown efforts to hide the law firm's financial
condition.
Financial records also showed that since falling into
default, the law firm had transferred more than $2.3 million to
Gary and $1.47 million to Williams between January 2010 and May
2011, the motion said.
Amid the lawsuits, partners have been departing Gary's law
firm, falling from 11 at the start of 2011 to four today.
The firm shortened its name in May after the departure of
two name partners. Another name partner, Michael Lewis, recently
left the firm following the July decision by Hurd in the
LawFinance case.
Lewis did not return a call seeking comment.
The case is LFG National Capital v. Gary, Williams, Finney,
Lewis, Watson, and Sperando P.L., et al, U.S. District Court for
the Northern District of New York, No. 12-cv-00446
For LFG National: Scott Balber, Chadbourne & Parke.
For Gary Williams: Michael Sussman, Sussman & Watkins.
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