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We told you this was bound to happen. Way back in September of 2019, when former Biglaw firm LeClairRyan’s process of dissolution turned to Chapter 11 bankruptcy after reports the firm was having issues paying monies owed, we noted that bumps in the road were likely. And that’s what has happened.

Earlier this week, a lawsuit was filed by a trustee for the now defunct firm, Lynn Tavenner, against UnitedLex and ULX Partners. UnitedLex, an alternative legal service provider, and LeClairRyan teamed up in 2019 to create ULX Partners which they claimed was “law firm 2.0” aimed at providing nonlegal operations for law firms. However, that partnership was unable to change the downward spiral, and, indeed, the lawsuit claims the venture “only served to plunge LeClairRyan further into insolvency.”

As reported by Bloomberg Law, the complaint alleges they misused funds:

But, according to the complaint, UnitedLex and ULX Partners, along with LeClairRyan officers and directors, “prioritized their own desires for financial gain and prolonged the Debtor’s lifespan, enabling the Defendants and others to improperly and unfairly extract millions of dollars from the Estate, to the detriment of LeClairRyan’s creditors.”

The trustee claims that ULX Partners has insider status in the bankruptcy proceedings due to its heavy ownership share in the joint venture, amounting to 99%, as well as the joint venture’s control over many essential functions at LeClairRyan, including marketing, accounting, conflict management, and business development.

The complaint alleges damages of no less than ~$42.8 million, saying they delayed the wind down process and also alleging damages from the liquidation of the retirement plan, the conversion from a professional corporation to a professional limited liability corporation (as part of the joint venture), and an increase in trade payables and accounts receivable. It further alleges more than $1 million in damages based on ULX’s “misappropriation of funds tendered by clients for specific expenses, which were used by the ULX Entities for improper purposes.”

The complaint also says there were legal maneuvers designed to elevate ULX’s claims in LeClairRyan’s bankruptcy:

Last September as LeClairRyan filed for bankruptcy, Bloomberg Law reported the firm had entered into an outstanding deferred loan promissory note by which it agreed to pay ULX Partners $8 million for outstanding fees owed under the joint venture agreement. As of the firm’s bankruptcy filing, that loan had not been paid back.

However, according to the complaint, ULX Entities sought to elevate ULX Partners’ priority over other unsecured creditors through the promissory note, which they claim was “an equity infusion.”

Stacey Yonkus, director of communications at UnitedLex, said this about the complaint:

“We believe the allegations being raised through the bankruptcy of LeClairRyan have no merit. As a major creditor of LeClairRyan, we fully expect the bankruptcy process to fairly resolve this matter. We eagerly await the resolution process and the opportunity to highlight our client commitment.”

We’ll be following along, whatever happens.

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Since the liberal Warren Court gave way to the conservative Burger Court well over four decades ago, conservatives have maintained a working majority over the federal judiciary. More recently, this conservative movement has come to achieve sheer dominance over the judicial branch. Having maintained so much power for almost five decades likely means there are discernable long-term conservative legal trends we can examine over this time. Moreover, these trends could indicate what a super majority conservative control is now going to do. Therefore, some might hope that because there has been an undeniable expansion of free speech and Second Amendment protection in the last 50 years, our future with a super conservative control is bright. Unfortunately, trends reveal that free speech expansion is under serious threat from a growing conservative movement that includes member(s) on the Supreme Court and the current president, who have plainly expressed their desire to see this expansion reversed. Furthermore, while undeniable expansions of individual liberty have indeed taken place over the last 50 years, with very few exceptions what has dominated conservative time in power is a steady restriction of individual liberty.

One of the most egregious, and deadly, examples of destructive conservative influence in the last five decades is upon the rights guaranteed by the Fourth Amendment – although much has been made of a relatively recent line of cases where conservative majorities have disagreed with the government over what is an acceptable warrantless search. As I have said before, these line of cases do nothing to address the much larger and deadlier problem of the absurdly abused standard by which violent warrants are regularly signed off on.

Making things oppressively worse, conservative influence has been the driving force behind the almost five-decades-long trend of restricting a straightforward law that permits citizens to hold bad government actors accountable when they violate their constitutional guarantees. In fact, I have personally seen this trend in action. Indeed, a citizen’s right to hold bad government actors responsible for unlawfully and violently breaking into their homes has been effectively abolished — abolished through a court-concocted immunity that has no basis in textualist or originalist understanding.

Currently, during an election conservatives are conceding they are likely to lose, the conservative political movement has replaced one of the few justices who was openly skeptical of this court fabricated immunity. Of course, even prior to Barrett’s ascension, the Supreme Court already had a working conservative majority that has furthered the trend of concocting atextual, ahistorical preconditions or defenses to a straightforward statute which plainly states that every state official who violates a citizen’s rights “shall be liable to the party injured.” All throughout Barrett’s hearing though, I had to keep hearing the claim that originalist conservatives simply follow the law. They simply don’t, and the long-term conservative trend of utter destruction to our individual liberties via made-up immunities says so.

Another conservative trend that can be discerned within the last 50 years is within the religious liberty landscape. Indeed it seems plain to say that religious liberty cases over the last four decades have trended towards expanding the religious right to dissent, not just through a First Amendment lens but also through a “super statute.” Meanwhile, however, the nonbeliever right to dissent over this same time period has been tightly restricted and openly disdained. For example, the “super statute” that grants conservative religious views broad exemption from all other laws has been denied to the deeply held beliefs of nonbelievers. Denying nonbelievers the same rights under this “super statute” has the effect of creating government castes that favor religious citizens in the law to the exclusion of nonbelievers.

The fast growing nonbeliever population is not only harmed by conservative favoritism granted to religion and by their exclusion from this government favor, but any law that seemingly could protect the right of the nonbeliever to dissent or be exempt from laws is also being struck down by conservative majorities. The result is a “free conscience” doctrine where only certain types of conservative religious and political views are being protected against government compulsion. All while conservatives endlessly repeat the bigoted and demonstrably untrue drivel that this country is intended and suitable only for them.

Similar to other libertarian-minded folks, I am unabashedly opposed to any movement, right or left, that produces these types of enemies to freedom. Being forced to financially subsidize religious beliefs I disagree with is not acceptable. It is also not acceptable that demonstrating racial discrimination is virtually impossible in our current court system whereas proving religious discrimination does not require proof of discriminatory treatment or intent. I submit that a judiciary unilaterally crafting defenses and preconditions to laws because they don’t like the policy choice of subjecting cops to liability goes against everything an independent judiciary stands for. So, whatever the constitution allows — up to and including adding members to SCOTUS — to stop this assault on individual liberty, I fully support.

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Tyler Broker is a practicing attorney whose work has been published in the Gonzaga Law Review, the Albany Law Review, and the University of Memphis Law Review. Feel free to email him or follow him on Twitter to discuss his column.

Readers, we have some exciting news: As of just under a month ago, Bill Ackman’s portfolio, uh, looked almost exactly the same as it did four months ago. No new names, a little less Lowe’s, a slight adjustment to Agilent, a hint of Hilton sold off.

Incredible, right? The sort of thing that makes you break for a moment of your busy day and take notice. Well, we’ve got even better news for you: This kind of breaking—and frankly groundbreaking—reporting won’t be going away anytime soon.

U.S. regulators are shelving a controversial plan to allow most hedge funds to keep their stock investments secret after public companies and other critics blasted the proposal as a major blow to market transparency…. While the SEC hasn’t publicly announced its decision to scrap the overhaul, some within the agency have been notified it’s dead, said the people who asked not to be named in discussing internal communications.

The names of everyone involved in this story aren’t necessarily important. It involves prestigious clerkships and powerful D.C. firms. Nor does it even matter if you believe Justice Kavanaugh tried to sexually assault Christine Blasey Ford. The conversation that one former clerk describes could unfortunately happen at any number of gatherings where powerful lawyers chum around.

To set the stage, a well-known female attorney who spoke publicly in defense of Kavanaugh throughout his confirmation process was reportedly confronted at a party by a young lawyer and sexual assault survivor about the damage it causes when prominent women lend their voices to support men accused of assault. Specifically, as in this case, when the defense went beyond generic platitudes and included counseling a cautious senator to not believe Dr. Blasey Ford’s testimony. And then this quote…

she brought up his hiring of female clerks as some kind of defense, and said verbatim “I don’t care if he raped five women, as long as he promoted one.” Which was quite the choice of rhetorical flourish!

If people are still confused about what rape culture is, this is a pretty textbook definition.

Because there was a — still problematic, but at least marginally defensible — response that boiled down to “I listened to all the evidence and while her testimony was powerful, it just didn’t persuade me.” But instead, she thought a better answer was “I don’t care if he raped five women, as long as he promoted one.” When powerful people in the profession promote a culture that assault is not only to be dismissed but downplayed it sends a message to every predator in the circle that they have no need to worry as long as they keep their professional resume clean and tells every victim that they will not only not be believed, but will be openly mocked for coming forward.

That’s also an insulting exchange rate. And I’m not being entirely glib. Sexual assault is not transactional like that, but if someone were to make such a disgusting suggestion, the idea that serial rapists are off the hook if they toss out one promotion is basically underlining how little respect you have for victims.

There are other outlets naming everyone involved. We’re not going to, not because we don’t think it’s important but because we don’t want to give the people who routinely contribute to this culture every day a scapegoat to exorcise them of their sins. Most folks aren’t making statements as egregious as this, but that doesn’t mean they aren’t disempowering victims by subtly adding to the already hostile environment in the legal profession.

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

* The U.S. government is demanding in a new lawsuit filed against a California museum that two relics allegedly stolen from Thailand be returned. This sounds like a good plot for an Indiana Jones sequel… [ABC News]

* A New Jersey lawyer has been disbarred after pleading guilty to committing securities fraud. [New Jersey Law Journal]

* A well-known St. Louis attorney fell to his death from his high-rise office building yesterday. Sending our condolences to the family of the deceased. [St. Louis Post-Dispatch]

* A former police officer is running as a reformer to unseat the first black District Attorney of Los Angeles. [Mother Jones]

* A Colorado public defender was found in contempt of court for refusing to show up for a trial amid heightened concerns over COVID-19. [Gazette]

* A group of California restaurants has filed a lawsuit seeking to recover liquor, health, and tourism fees that are still being collected during the COVID-19 pandemic. Kind of seems like these restaurants are asking for “crumbs.” [Eater LA]

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Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

Ed. Note: Welcome to our daily feature Trivia Question of the Day!

Amy Covid Barrett earned the ignominious distinction of being confirmed to the Supreme Court without a single — not even Joe Manchin! — vote to confirm from a Democrat. When was the last time a Supreme Court nominee was confirmed without any bipartisan support?

Hint: Though he was confirmed along strict party lines, he never heard a case on the Court, as he died only a few days after being confirmed.

See the answer on the next page.

Unfortunately for investors in Odey Asset Management, founder Crispin Odey said this weekend that he’s “having a great time at the moment.” That’s admittedly an odd thing for a person about to face trial on sexual assault charges to say, and most especially a person who’s proven so bad at his job in recent years, but Crispin Odey is nothing if not a font of odd and off-putting statements.

But Odey does have a plan, in addition to one to maybe and just possibly scamper back to the henhouse should those two days in February in Hendon magistrate’s court not go well: If he’s not going to stop losing investors money, maybe he can at least try to make them forget that he’s the one doing it.

The rushed and unprecedented confirmation of Amy Coney Barrett as Associate Justice to the Supreme Court, in the middle of an ongoing election, should be a stark reminder to every American that your vote matters. …

[V]ote for the legacy of the late Justice Ruth Bader Ginsburg. She was proof that courage, conviction, and moral clarity can change not just the law, but also the world. Let us continue to be voices for justice in her name.

Vote.

— Democratic presidential nominee Joe Biden, in a message imploring people to vote in the 2020 election in the wake of the partisan confirmation of Justice Amy Coney Barrett to the Supreme Court. Barrett is the first justice in modern history to be confirmed without bipartisan support.

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Samuel Charkham, 68, is a partner at the British law firm of Simkins LLP. Well. He was. At the time of the allegations, Charkham was a partner at the firm; now, he’s been fined £30,000 and ordered to pay costs of £21,000 by the Solicitors Disciplinary Tribunal. According to reports, the tribunal found Charkham made racially insensitive “jokes” and repeatedly touched the rear end of a secretary.

As RollOnFriday notes, the charges against Charkham include play dressing as a member of the Ku Klux Klan:

In one of the charges brought by the SRA, Charkham “joked” that he had joined the Ku Klux Klan to Person A (who is black), while wearing a white A4 envelope as a hat. Person A, a secretary at the time, said she was shocked by Charkham’s behaviour and wanted to quickly finish the task she was working on, so she could go outside and get herself together.

A former colleague who had witnessed the incident told Charkham that it wasn’t funny, to which he responded it was only a joke, the tribunal heard.

That’s right, Charkham trotted out the ol’ joke excuse “I was being playful,” saying, “I know it sounds ridiculous in retrospect.” Indeed. He also said he didn’t really know what the KKK represented at the time (though apparently he knew enough to think simulating a white hood was “funny”), adding, “I wish I had known what it represented at that time.”

Charkham also blamed his “old fashioned” sense of humor for a separate incident:

In another incident, Person A, was at the firm’s Christmas dinner when the partner make a racist joke in her vicinity. The secretary said she caught the “odd word” including “c*on.” She said the joke caused her colleagues to gasp and turn to look at her.

A colleague at the time told the tribunal that the joke by Charkham was a play on the word “tycoon.” Another former Simkins employee and witness said the punchline was “the kind of joke I have not heard for 25 years.”

But the tribunal rejected this excuse, saying, “We do not accept for one moment these were jokes.” Adding that describing the incidents as “banter” would be “a grotesque misnomer and should be rejected in the strongest possible terms.”

At least Charkham seems to recognize now that this behavior is inappropriate:

“I have told racist jokes in the past in a very different political climate than we are now, and I would never dream to do the same thing again.” He said, “the Black Lives Matter movement did not exist four years ago”.

That recognition is in contrast to the allegations of touching a secretary’s bottom, which he denies. However, the tribunal found he inappropriately touched a secretary at least 18 times:

The tribunal also found allegations of misconduct against Charkham proven that he had inappropriately touched the secretary’s bottom at least 18 times on various occasions in the office or at work events, over a period of four years. However, Charkham denied touching Person A, and told the tribunal that the allegations were false.

The tribunal also found that Charkham touched another female colleague’s bottom, although Charkham said in his defence that it was a “playful kick”.

After leaving Simkins LLP, Charkham joined Portner Law. However, that firm says “we removed Sam as a consultant as soon as we were aware of the allegations of his conduct prior to joining us.”

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).