|
|
| November 05, 2009 |
By: Julie Kay and Jordana Mishory |
|
hile Stuart Rosenfeldt is intent on keeping the beleaguered Fort Lauderdale law firm formerly led by Scott Rothstein together with a core group, many lawyers at Rothstein Rosenfeldt Adler are looking for other jobs while their ousted boss faces a fraud probe into alleged losses of $400 million or more.
“Quite a lot of talent at the firm have come to me and said we want our core group to stay together, let’s reconstitute and change the name,” Rosenfeldt said in an interview. “We want to practice law together. Whatever was RRA and whatever name it surfaces as in the near future, it will still have that great, solid talent base that made us a great law firm.”
But about 10 of the firm’s 70 lawyers have resigned since the Rothstein revelations came out, and most of those remaining are sending out résumés and going on job interviews. Carlos Reyes, a partner for 18 months, said he has been talking with potential employers.
“I’m weighing my options, like everyone here is,” said Reyes, a Republican heavyweight who was formerly a partner at Akerman Senterfitt and Greenberg Traurig.
Rothstein is accused by investors of leading an alleged scam using structured settlements. A Broward judge Tuesday appointed a receiver to assume control of the firm’s finances and remove Rothstein as CEO. An initial review found only about $500,000 in the firm’s coffers.
Rothstein and Rosenfeldt were the firm’s only equity partners, holding 50 percent each. Rosenfeldt insisted Rothstein maintained exclusive control over firm finances, keeping him in the dark until last weekend.
Many of the firm’s lawyers have agreed to give up their paychecks for the immediate future.
Rosenfeldt acknowledged bankruptcy is on the table as an option. Also under consideration: breaking practice groups into small firms and forming a new firm. He said large national firms also have approached the firm about an acquisition. He declined to comment on the firms except to say they’re not based in Florida.
Friedrich Blase, a law firm consultant with Kerma Partners of New York, didn’t give RRA much hope of surviving. While the mega firm Milberg Weiss shortened its name to Milberg after two name partners were indicted and survived, a small firm has a much smaller chance, he said.
“Once trust disappears, it’s damn hard to recover,” Blase said. “Smaller firms are in deeper trouble because so much hinges on very few players. It’s tough because often these businesses depend on few relationships, and when they walk out the door it becomes a race against time.”
More details are beginning to emerge about the firm from current and former partners. Some complained Rothstein owed money to lawyers and investigators who worked for him through the years.
At least two lawyers, who asked that their names not be used, and investigator Ron Cacciatore say they parted with Rothstein over money he owed them.
Cacciatore, a private investigator and now a fraud investigator with Broward County Property Appraiser Lori Parrish, in 2003 ran his own company, Worldwide Investigations. He said Rothstein owed him $3,000 and refused to pay.
“When I saw him driving around in a Bentley, I said, ‘The heck with this,’ and filed suit,” Cacciatore said. Rothstein, who said he was trying to get a mortgage at the time, settled with Cacciatore, who refused to work for Rothstein again.
Another former partner who declined to be identified said Rothstein owed him $30,000 when he left. “I guess I won’t be getting it now,” he said.
Numerous lawyers resigned this week, including Palm Beach County Commissioner Steven Abrams and Richard Wolfe, who ran the Miami office.
Speaking of Abrams’ departure, Rosenfeldt said: “It’s the best thing he could do for himself. He’s in politics and doesn’t need the aggravation.”
Ken Padowitz, a former Broward homicide prosecutor who joined the firm three years ago as a partner and later became of counsel, said he found new office space two weeks ago with family lawyer Gary Mizell. Padowitz insists it was a lucky coincidence that he moved out of the Fort Lauderdale office Friday, just before the news broke.
“I had no prior information about what went on at the law firm,” Padowitz said. “I swear. I had taken my name off the Web site. I had changed my address on The Florida Bar Web site. I had told all my clients I was moving.”
Part of his decision to leave was fueled by conflicts between his criminal defense practice and RRA’s practice.
Office Closings
Rosenfeldt, who has been named chief executive officer of the reconstituting firm, said its Miami, Boca Raton, New York and Washington offices were all hastily closed. The Washington office was run by former U.S. Rep. Larry Smith, and Rosenfeldt said Tuesday that he had not had a chance to inform Smith of the office closing yet.
“It was an honor to have him associate with us, but the plan when [Smith] joined us was to run a Washington office that focused on federal government lobbying,” Rosenfeldt said. “We have to go with our strength in a situation like this, which isn’t federal lobbying.”
In 1992, Smith served three months in a federal prison for tax evasion and failing to report his use of campaign funds to pay a gambling debt.
Former Broward County Court Judge Julio Gonzalez, who joined the firm after losing a reelection bid last year, is exploring other options, but Rosenfeldt said former 4th District Court of Appeal Judge Barry Stone has “expressed a willingness to remain.”
Russell Adler, a name partner at the firm, declined comment about his plans.
When asked how the new firm would continue with no money, Rosenfeldt was vague. “I’m not a finance guy. I’m not an accounting person,” he said, adding he put two-thirds of his life savings into the firm Tuesday.
He said he would like to run the new firm as a democracy — rather than the previous autocracy — with all partners sharing equity. That would be in sharp contrast to the way things were before.
One lawyer who left the firm and did not want to be identified said his antenna was up for a long time about Rothstein. His concerns escalated when Rothstein installed a security door at his office last year requiring people to be buzzed in.
“In law firms, there are checks and balances, there are partner votes,” he said. “Here, I saw a boss and employees, that’s it. There were so many fake titles, people called partners who were shareholders of nothing. There was no oversight.”
Rothstein famously announced he would have “open-door Tuesdays,” but “they were a joke,” Rosenfeldt said. “Getting face time with Scott was like getting to see the pope. It just didn’t happen.” And few felt comfortable speaking up at partner meetings.
The lawyer speculated the entire firm could be on the hook for investor debt.
“There are going to be tons of lawsuits flying,” he said.
Fort Lauderdale lawyer Richard Zaden said he had many friends interview at RRA. They were asked how much they earned last year and how much they expected to produce this year and were told, “This is what we’ll give you next year.”
“Who has ever heard of paying a lawyer like that?” he asked. “Usually, there is a base salary for meeting certain requirements and then bonuses. Where is the incentive to work harder?”
One lawyer who is feeling relieved these days is Miami criminal defense lawyer Brian Tannebaum. He said he was asked to have lunch with Rothstein a couple years ago so the two could meet and explore business opportunities. He showed up for the lunch at Jackson’s Restaurant on Las Olas Boulevard, across the street from RRA. Rothstein did not show up, he said.
“He never even called to apologize,” Tannebaum said. “I thought, ‘Wow, this guy is arrogant.’ ”
Jordana Mishory can be reached at (954) 468-2616. |
Search the archive for more stories.
|
