$128 Million Suit Against UnitedLex Over LeClairRyan Demise Shows Outsourcing No Cure for Dying Firm

As a growing number of law firms look to contract with third-party vendors to outsource business operations, a $128 million lawsuit filed by LeClairRyan’s bankruptcy trustee against UnitedLex makes it clear that the risks to both sides can be high. LeClairRyan’s trustee alleged that the terms of the deal with UnitedLex, which resulted in the creation of a joint venture to handle support services, served only to push the cash-strapped firm “further into insolvency.” Now UnitedLex itself faces substantial liability for allegedly sucking money out of the firm, at the expense of LeClairRyan’s other creditors. In June 2018, the two entities unveiled the launch of ULX Partners LLC, a joint venture that was intended to allow LeClairRyan and other law firms to outsource back-office operations and receive equity stakes in the new company. “If we don’t reach 10,000 employees in the next five years, then I’m not doing something right,” UnitedLex founder Dan Reed told The American Lawyer at the time. “Some people would view that as heretical, but it’s not.” But little over a year later, in August 2019, LeClairRyan announced its dissolution, following months of partner defections that had begun before the UnitedLex deal. The firm filed for bankruptcy five weeks later. And as its fate became increasingly apparent over the course of that summer, UnitedLex had nothing to say about the status of ULX.

Struggling financially? Please contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , , | Leave a comment

Iconic Restaurant Chain Friendly’s Files for Bankruptcy

Friendly’s Restaurants LLC, an iconic chain on the East Coast of the U.S. known for its sundaes, became the latest dining institution to go bankrupt amid the pandemic. The company filed for chapter 11 bankruptcy protection in Delaware. It listed estimated liabilities of $50 million to $100 million, and estimated assets of $1 million to $10 million. FIC Restaurants Inc., which operates the Friendly’s brand, will sell almost all of its assets to Amici Partners Group. Nearly all of Friendly’s 130 corporate-owned and franchised restaurant locations are likely to remain open subject to pandemic limitations.

Contemplating bankruptcy? Contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , , | Leave a comment

CFPB Settles with Ninth Mortgage Company to Address Deceptive Loan Advertisements Sent to Servicemembers and Veterans

The CFPB issued a consent order against Low VA Rates LLC to address the Bureau’s finding that Low VA Rates sent consumers mailers for mortgage loans guaranteed by the U.S. Department of Veterans Affairs that contained false, misleading, and inaccurate statements.  Low VA Rates’ conduct violated the Consumer Financial Protection Act’s prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule, and Regulation Z. Low VA Rates, a Utah-based mortgage lender and broker incorporated in Colorado and licensed in 48 states and DC, advertised their loans through direct-mail primarily to U.S. military servicemembers and veterans. The consent order requires Low VA Rates to pay a penalty of $1,800,000 to the Bureau and imposes requirements to prevent future violations.

Are you a victim of a similar fraudulent matter? Contact our office at 816-524-4949, or you can visit our website at hoorfarlaw.com to see what our attorneys can assist you with.

Posted in General | Tagged , | Leave a comment

Ex-‘Arsenio Hall Show’ Musical Director Sentenced to over 2 Years in Prison for Embezzling Nearly $1 Million Intended for Charity Concert

The former musical director of “The Arsenio Hall Show” was sentenced to 27 months in federal prison for embezzling nearly $1 million from a charity concert intended to raise money for children made homeless by wars. A restitution hearing in this case will be scheduled in the coming months. Di’Maggio helped raise funds for children who had lost their homes due to global conflicts. Based on his promises, the foundation’s financial sponsor sent nearly $1 million dollars to Di’Maggio who squandered the money on his personal assets and paying his personal debts.

Struggling financially? Please contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , | Leave a comment

Pizza Hut Drivers Claim $320 Million Mileage Underpayment

Pizza Hut delivery drivers say that the bankrupt company’s largest franchisee shortchanged them on payments for using their own vehicles, adding to the list of cases from former employees. NPC International Inc. reimbursed the drivers for miles at such a low rate that they were allegedly underpaid by $4 to $12 per hour. With the claims totaling more than $4,000 each from 80,000 drivers, the total could exceed $320 million. A bankruptcy judge ruled yesterday that their claims must stay on hold for now while NPC’s reorganization proceeds. The dispute concerns the difference between the mileage reimbursement rate of 57.5 cents a mile set by the IRS and the 25 to 35 cents typically paid by NPC. Drivers typically worked 7 hour shifts bearing all the costs of operating their personal vehicles from gasoline to insurance. On top of that, the drivers said, the number of miles they drove was undercounted. They claim top executives were aware of the alleged short-changing and have sought in legal filings to hold them personally liable.

Struggling financially? Please contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , | Leave a comment

All taxpayers have the right to privacy – it’s the law

One of the IRS’s top priorities is protecting the privacy rights of America’s taxpayers. The agency takes this so seriously that the right to privacy is one of ten rights the Taxpayer bill of rights gives all taxpayers.

Taxpayers have the right to expect that any IRS inquiry, audit or enforcement action will comply with the law and be no more intrusive than necessary. Taxpayers can also expect that the IRS will respect all due process rights, including search and seizure protections and provide a collection due process hearing when appropriate.

 Inquiring about taxes? Contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , | Leave a comment

New Jersey Sues Student Loan Servicer Navient, Alleging ‘Deceptive, Misleading’ Tactics

The state of New Jersey sued Navient on Tuesday, alleging that the student loan servicing company forced borrowers to pay and owe more money than necessary through misleading and deceptive practices. In a lawsuit Navient is accused of steering borrowers into loan forbearance and away from income-driven repayment plans, which typically extend the term and reduce the monthly payment owed. New Jersey also says that Navient failed to inform borrowers about their requirement to recertify that they are eligible for an income-driven repayment plan and gave them inaccurate information about balances due and other information.

In a tight spot financially? Contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com

Posted in General | Tagged , | Leave a comment

Workers’ Compensation Is Exclusive Remedy for Co-Worker Assault

In a contractor’s action for damages from on-the-job-injuries, defendant raised the defense of plaintiff’s status as a statutory employee, for whom workers’ compensation statutes provide the exclusive remedy. Statutory employee status depends in part on whether the contractor was doing work in the usual course of the defendant’s business. Defendant’s business was “to distribute and deliver its products to its customers [,]” for which it would have used its own employees, if it were not using contractors.
Robby Sebacher, Appellant, vs. Midland Paper Company, Respondent.
Missouri Court of Appeals, Eastern District – ED108615

Struggling financially? Please contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , | Leave a comment

Co-Working Company Regus Puts More Locations into Bankruptcy

Co-working company Regus Corp., which provides furnished workspace on short-term deals, has placed more of its assets into chapter 11 bankruptcy as office markets deal with the effects of the coronavirus pandemic on the economy. Regus has put more than a half-dozen lease holding affiliates from New York to California into chapter 11 in U.S. Bankruptcy Court. Among the latest filings, were affiliates managing workspaces in New York City, Los Angeles and Denver. The chapter 11 filings represent a small share of Regus’s overall portfolio. Regus offers on-demand workspace in more than 1,000 locations in the U.S. and Canada.

Contemplating bankruptcy? Contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged , , | Leave a comment

Former city administrator pleads guilty to money laundering

A former administrator for a Mississippi city has pleaded guilty to money laundering and making false statements on a federal tax return. Randy James, 56, who was once city clerk of Bay Springs in Jasper County, entered the plea Wednesday.

James faces up to 10 years in prison and a $250,000 fine for money laundering. He also faces up to three years in prison and a $250,000 fine for making a false statement on an income tax return. Sentencing is set for Jan. 12.

Struggling financially? Please contact our office at 816-524-4949 or you can visit our website at hoorfarlaw.com to schedule an appointment.

Posted in General | Tagged | Leave a comment