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Chris T., JD
Chris T., JD, Attorney
Category: Legal
Satisfied Customers: 4823
Experience:  Experienced in both state and federal court.
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The situation- Three equal share members/owners establish

Customer Question

The situation-
Three equal share members/owners establish multiple new entities, one of the members recommends his existing attorney to formulate and establish the incorporation paperwork, partners agreements, review financial documents and create stock sale agreements. They all agree verbally to use the attorneys' services, based on the existing rates that the member had been paying, but don't have a formal retainer set up for the other two members and for the next two years pay all his fees from the various companies. Then the member that introduced the attorney to the other two members, embezzles all the monies and leaves the company. The attorney then represents the one member that embezzled the monies and sues the other members and the companies he set up.
For the next four years the attorney and embezzler institute multiple lawsuits, in which they perjured themselves several times, to destroy companies and tie up the other partners in court.
1. Is that legal?
2. What is the attorneys responsibility to the companies that he set up?
3. If the attorney agrees to do all the work for the company and then subsequently does work and gets paid by the company and its members does that constitute any attorney-client privilege for the company or its members?
4. Is it proper legal protocol for an attorney who is hired by a company that has three owners who are members of the LLC is a proper for him to then sue the other owners on behalf of one of the owners
5. If said attorney had created operating agreements to deal with any issues of the partners why was the operating agreement never utilized to resolve these issues?
6. If the lawyer has formally represented the company in a matter shall not there after represent another person in the same or substantially related matter where that person's interests is materially adverse to the interest of the company
7. What specific violations has the attorney committed?
8. Can the attorney be sued for his actions in this situation
Submitted: 1 year ago.
Category: Legal
Expert:  Chris T., JD replied 1 year ago.
Hello. I'll be happy to assist you.1. Clearly, perjury or filing lawsuits one knows to not have merit are not legal.2. If the attorney simply helped the owners set up the legal entities, he has no legal duty to the companies themselves. 3. If the attorney is eventually retained by the compny itself, he owes that company the same duties he would any other client. He should give that company his undivided loyalty and he's covered by the attorney-client privlidge. 4. It would be a conflict of interest for an attorney to represent a company, and then turn around and sue that same company, since the company is his former client5. The question of operating agreements is really a question for the partners in the company to answer. They should follow it, but they can also ignore it so long as none of them challenge the actions of the others based on the operating agreement.6. Correct. That would be a conflict of interst and a judge could kick him off the case if the issue were raised.7. Conflict of interest8. He can be sued for perjury, but not for the conflict of interest. That said, I'm sure the state bar association would be interested to know about this situation. He could face bar dicipline issues.
Customer: replied 1 year ago.
Thank you for your prompt response.
Expert:  Chris T., JD replied 1 year ago.
Glad to help. If there isn't anything else I can do for you, please remember to "Rate" my asnwer before you go. Good luck.
Customer: replied 1 year ago.
Your answer to question # ***** was somewhat vague. This attorney was paid over 20,000.00 for a period over 2 years filing all business paperwork, drafting stockholder agre
Expert:  Chris T., JD replied 1 year ago.
There are really two phases. If the attorney just set up the company by filing the paperwork, he would not have a duty to the company later since he didn't represent the legal entity at the time (because it didn't exist yet). However, once it is up and running, he can then be retained by the company itself. So, it depends on at which point he was retained.
Expert:  Chris T., JD replied 1 year ago.
Does that answer your question? If not, feel free to ask follow up questions. If so, please remember to "rate" my answer before you go (that's how I get credit for my work).
Expert:  Chris T., JD replied 1 year ago.
Is there something else I can do for you?
Expert:  Chris T., JD replied 1 year ago.
Do you have any questions? If so, feel free to ask. If not, please remember to "Rate" my answer before you go. Good luck.