LeClairRyan and HDL Agreement Gets Approval by Bankruptcy Court

by San Antonio Attorney

The settlement was approved by a federal bankruptcy judge after a grueling four hour hearing last Sept. 22.  The settlement that was filed recently will absolve LeClairRyan from all complaints by HDL, according to court documents.

HDL paid unnecessary fees during its peak prior to its bankruptcy filing last June 2015.  This practice had its own repercussions, as it violated state and anti-kickback laws.  The action is under investigation and former employees of HDL are now facing lawsuits.

Richard Arrowsmith, a liquidating trustee for HDL, orchestrated the settlement.  Arrowsmith’s legal representative, Richard Kanowitz, argued that the settlement was the best choice for HDL.

Kanowitz added that LeClairRyan was not definite on whether they can pay for damages after the litigation.  A settlement was the best choice for all these problems.

Legal representatives working under former executives of HDL such as Tonya Mallory, Russell Warnick, Joe McConnell and Satyanarain Rangarajan are against the agreement due to the fact that it gave the impression that HDL would also release claims against LeClairRyan.

Kanowitz described last week’s hearing in federal bankruptcy as ‘the executives’ day of reckoning’ as Arrowsmith’s lawsuit worth $600 million was filed against the company’s former employees.

The mass lawsuit involving approximately 100 defendants describes the misdemeanors committed by HDL’s kickback scheme such as process-and-handling fees.

Dennis Ryan, a LeClairRyan’s founder, was named as a defendant in the high-profile case.  The founder left his own firm and joined forces with HDL with the position of executive vice president in 2012.

According to Arrowsmith lawsuit, Ryan left LeClairRyan with a cash bonus costing $850,000.  HDL allegedly paid Ryan $1.1 million in 2012.

The LeClairRyan settlement was also approved by Huennekens, providing clarification that Arrowsmith only has the power to file claims belonging to the bankruptcy estate.

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