On February 13, 2020, the D.C. Court of Appeals unanimously ruled in favor of Jones Day in the years-long lawsuit brought by the bankruptcy estate of Howrey LLP asserting claims for so-called “unfinished business.”
This is a complete victory for Jones Day, our clients, and the profession as a whole. The D.C. Court of Appeals joined the unanimous California Supreme Court and the unanimous New York Court of Appeals in rejecting these types of claims. Jones Day is the only firm involved in all three lawsuits. And while most firms settled these claims, Jones Day litigated them as a matter of principle. This brings to a close these law firm bankruptcy cases, which the Jones Day has been litigating for nearly a decade.
Following the 2008 financial crisis, several major law firms failed. Howrey was one of them. Some partners from Howrey chose to join Jones Day, both before and after Howrey collapsed. Clients made their own choices about which firms would represent them going forward. But the bankruptcy estate of Howrey wanted to reach from the grave and claim a property interest in the work Jones Day was performing on the matters Howrey once handled.
This decision is an important victory. It not only swells the growing chorus rejecting these claims, but it also creates a broader rule than previous decisions. In the California and New York cases, the trustees sought fees only on matters that left the firms after they collapsed. Howrey’s trustee, however, sought fees on matters that left even before Howrey dissolved. The D.C. Court of Appeals’ firm rejection of that rule is crucial to putting these unfinished-business claims to bed.
The Jones Day team was led by Shay Dvoretzky (Picture).
Involved fees earner: Shay Dvoretzky – Jones Day;
Law Firms: Jones Day;
Clients: Jones Day;