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February 9, 2010 |
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| June 12, 2007 |
By: Daniel Ostrovsky |
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quire Sanders & Dempsey is seeking to recover nearly $73,000 from the estate of the late Steel Hector & Davis partner Sherwin P. Simmons, a prominent tax lawyer who died of leukemia last May at age 75.
In a February lawsuit in Miami-Dade Circuit Court, Squire Sanders said the amount represents the unpaid balance on a $230,000 loan made to Simmons in 2001 to help him stave off personal bankruptcy.
Squire Sanders acquired Steel Hector in 2005. Simmons, a non-equity partner, chaired Steel Hector’s tax group for more than 10 years before moving to Buchanan Ingersoll in 2005. Then-Steel Hector managing partner Joseph P. Klock Jr. signed off on the loan.
Alvin Davis, managing partner of Squire Sanders Miami office, declined to comment on his firm’s actions in the Simmons matter. Squire is represented by Tina M. Talarchyk, who is an of counsel attorney in Squire’s West Palm Beach office.
The attorney for the Simmons estate, Eric J. “Tate” Taylor, of Trenam Kemker in Tampa, denied Simmons owed his former firm any money. “We believe he did not owe anything back to them,” Taylor said. Simmons founded and formerly managed the Trenam Kemker firm. 
Taylor said the Squire Sanders complaint was “disappointing” to his clients and said “they did not expect this” from Simmons’ former firm.
Simmons’ survivors include his wife Mary Anne Simmons, son Sherwin Palmer Simmons and stepson Stephen A. Leal. Simmons’ son and stepson are both lawyers in the Tampa area.
In its claim against Simmons’ estate, Squire Sanders is demanding $72,917, which it contends is the remaining balance on the loan. Court filings reveal that Simmons borrowed money from his firm because of serious financial problems.
According to a May 11, 2001 letter about the loan attached to Squire Sanders’ complaint, Simmons asked to borrow the $230,000 from Steel Hector.
“The loan is being made by the firm based upon the understanding that Sherwin’s financial position may, if Sherwin is not able to reach agreement with his creditors, require Sherwin to file a voluntary bankruptcy petition,” stated the letter, which was signed by Klock.
“The proceeds of the loan are to be used in their entirety to pay debts incurred by Sherwin [and his wife],” the letter stated.
Simmons collateralized the loan with an interest in his life insurance policy, the letter stated.
According to the letter, Simmons was paid a salary of $275,000 in 2001 and had no capital account with the firm because he was not an equity partner. Squire Sanders’ accounting records on Simmons’ progress in paying off the loan reveal that Simmons’ salary increased to $325,000 by 2005.
Taylor declined to comment on why Simmons faced bankruptcy despite his high salary and bonuses that he earned.
Several former Steel Hector partners, who did not want to be identified, said that if the Squire Sanders’ accounting records filed with the complaint are accurate the firm has the legal right to collect the money from Simmons’ estate.
But they also said that 800-lawyer Squire Sanders, which reported $465.5 million in gross revenue last year, is wrong in not forgiving the alleged $73,000 debt.
“I thought it was awful that the firm filed a claim — the guy was there for 10 years, served the firm well and was the leader of the tax group,” one former Steel Hector partner said. “This isn’t going against Sherwin — this is going against his widow.”
The leader of another large South Florida law office, however, said it’s difficult for outsiders to judge the merits or morality of this type of claim.
Alan Becker, the managing partner of Becker & Poliakoff in Fort Lauderdale, said his firm occasionally has made loans to firm partners. In some circumstances, he said, the firm collected on the loans, while in other cases the debts were forgiven.
“It comes down entirely to the business arrangement and the personal relationship and nobody on the outside has a right to judge either of those things without having all the facts,” Becker said.
In addition to raising questions about Simmons’ financial situation, the case raises questions about the management style of longtime Steel Hector managing partner Klock. Critics have said poor management and excessive spending by Klock contributed to the financial problems at Steel Hector that forced it to merge with Squire Sanders.
Some former Steel Hector partners suggested it may have been unwise to make a large loan to a partner allegedly on the brink of bankruptcy.
Klock was ousted as the managing partner of Steel Hector in November 2004 and from the board of the firm several months later. Klock, who left Squire Sanders to join the Miami office of Epstein Becker & Green earlier this year, did not return a call seeking comment.
Simmons received his law degree from Columbia University. He started out as an attorney for the U.S. Tax Court in Washington, D.C. Prior to joining Steel Hector, he served on the U.S. Department of Justice Advisory Committee on Tax Litigation, and was a member of the Advisory Group for the Commissioner of Internal Revenue.
Simmons wrote hundreds of articles and several books on tax law. He chaired the American Bar Association’s Section of Taxation and the American College of Tax Counsel — the only Florida attorney to have chaired both associations of tax lawyers. He also he served on the Council of the American Law Institute.
Simmons also chaired the ABA’s commission on multidisciplinary practice and served as an adjunct professor at the University of Miami law school.
Daniel Ostrovsky can be reached at dostrovsky@alm.com or at (305) 347-6648.
Joseph P. Klock Jr. photo by A.M. Holt
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