Law firm sued for $20M
Colin Pope
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Austin Business Journal Staff
The parent company of defunct mortgage lender Empire Funding Corp. has slapped bankruptcy attorneys at Munsch Hardt Kopf & Harr PC with a $20 million lawsuit, alleging the law firm botched Empire Funding's bankruptcy case.
Austin-based Empire Funding went out of business three years ago under $75 million of debt. The parent company's lawsuit was filed June 19 in Travis County District Court.
In the suit, Empire Funding Holding Corp. claims attorneys in the Dallas office of Munsch Hardt failed to assert various claims in the bankruptcy case of another mortgage lender, ContiFinancial Corp., which filed for bankruptcy protection at about the same time as Empire Funding.
By allegedly doing so, Empire Funding claims it lost its chance to collect at least $20 million from ContiFinancial, which since has gone out of business.
Empire Funding is suing for actual damages of $20 million and seeks millions more in exemplary damages from the Dallas-based firm. Munsch Hardt attorneys listed individually in the suit are Russell Munsch, Paul Seiler and Joe Marshall.
Speaking on behalf of the firm and the attorneys being sued, Munsch Hardt partner Steven Harr in Dallas dismisses Empire Funding's claim.
"We believe that the lawsuit is meritless, in particular because we never represented the party making the claim," Harr says. "We have hired counsel and intend to aggressively defend ourselves."
Harr says Munsch Hardt represented subsidiary Empire Funding Corp., not parent company Empire Funding Holding Corp., which is making the current claim.
The holding company's suit claims Munsch Hardt was "engaged and retained" by the holding company and subsidiary.
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