Client pulls Squire Sanders from case

By Lawyers Weekly|04 March 2012

Some clients just don't want to share the love they have with their law firm.The Texas Foreclosure Defense Network reports that last month, JP Morgan Chase Bank successfully took court action to…

Some clients just don't want to share the love they have with their law firm.

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The Texas Foreclosure Defense Network reports that last month, JP Morgan Chase Bank successfully took court action to stop Squire Sanders & Dempsey (SSD) acting for a development company.

JP Morgan Chase are a client of Squire Sanders in the United States - a rather important client for the latest global entrant on Australia's shores - and to say they were not happy that the firm was acting for Meritage Homes Corp in bankruptcy proceedings over a Nevada housing development project gone wrong, would be an understatement.

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JP Morgan's beef was that Squire Sanders had a conflict of interest in acting for Meritage Homes and JP Morgan itself, given the companies had been involved in multi-million dollar lawsuits related to the same housing development.

Initially, JP Morgan was a real gentleman about this dilemma, asking Squire Sanders very nicely if it would withdraw from the case. Squire Sanders listened, nodded its head and said it would. It then went to Meritage to ask it to be relieved of its duties, and Meritage refused and said it would ask JP Morgan to drop its request to take Squire Sanders off the case.

JP Morgan was angry. So angry, the company went to the Federal Court.

"JP Morgan now has the problem every client fears - Meritage demands that JP Morgan choose between proceedings to a long-standing, scheduled confirmation hearing on a joint plan the leaders want confirmed, or bless its lawyers' disloyalty," said JP Morgan, according to the Texas Foreclosure Defense Network.

The Federal Court agreed with JP Morgan's argument and ruled there was a conflict with the firm acting for both parties, and ordered that Squire Sanders disqualify itself from the bankruptcy proceedings.

Folklaw can't wait to see which law firm JP Morgan appoints when it next puts its legal panel to tender.

Client pulls Squire Sanders from case
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