Shook Hardy To Pay $5 Million To Settle Bankruptcy Suit
Shook, Hardy & Bacon will pay $5 million to settle a bankruptcy lawsuit brought on behalf of the victims of a grocery trading scam run by infamous University of Miami athletic booster Nevin Shapiro.
Trustee Joel Tabas filed a 92-page negligence lawsuit against the Kansas City, Missouri-based law firm in January, alleging the law firm facilitated Shapiro's scam, which collapsed in 2010, and describing illegal gambling and parties attended by prostitutes.
The lawsuit sought more than $50 million in damages and stated Shook Hardy tobacco litigator Marc Levinson, a childhood friend of Shapiro's, advised him on his business dealings and "aided and abetted" the Ponzi scheme.
The lawsuit also claimed Ponzi money was used to buy the sports agency Axcess Sports & Entertainment in 2003 with advice from the law firm. Levinson, who is no longer with the law firm, said in a deposition he did little or nothing to research state law on the sports agency purchase.
Tabas, a partner at Tabas, Freedman, Soloff, Brown & Rigali in Miami, disclosed the proposed settlement in a court filing Friday. Shook Hardy denies any wrongdoing under the terms of the agreement.
Tabas said the settlement was reached to avoid further expenses pursuing a lawsuit against the 500-attorney litigation firm with plenty of resources.
"In view of the cost of trying this matter to conclusion and the risks associated with trial, the trustee believes that the settlement as described in the settlement agreement is in the best interest of the estates, debtors' creditors and all parties in interest," Tabas said in a motion seeking settlement approval.
The law firm's chief marketing officer Chris Carter reiterated Monday that Shook Hardy denies any and all liability.
"To avoid further expense and protracted litigation we entered into a settlement agreement, which must be approved by the court," he said. "If approved, the settlement agreement will conclude this matter."
U.S. Bankruptcy Judge Laurel Isicoff has scheduled a hearing Oct. 21 to consider the settlement.