The Business Litigation Blog

Federal Appeals Court Reverses Case Where Lawyer Allegedly Withheld Evidence

The Federal Eleventh Court of Appeals in Atlanta has reversed a decision regarding a 2010 bankruptcy decision based on “allegations of collusion by business partners and accusations that a bankruptcy lawyer failed to turn over emails about the plan.”  The suspicious emails were dated from June 2010 and were discovered in March 2012. The emails show that two partners in a company hatched a scheme to force out a third partner through a bankruptcy proceeding.

Plan to Take Over a Company

The court found that the emails that were recently discovered, and apparently held secretly by Fort Lauderdale attorney Chad Pugatch, detailed a secret plan to take over a company called Global Energies.  The plan, according to the court’s decision, was that two of the partners in Global Energies would file an involuntary bankruptcy petition which would force out a third partner, leaving them in control of the company.  

The two scheming partners apparently lied in depositions during the initial litigation in order to deceive the trial court about their plan.  

The Bankruptcy Attorney’s Position

The bankruptcy attorney who represented one of the allegedly colluding partners back in 2010 denies that he did anything wrong.  The appeals court found that the attorney, Mr. Pugatch, was aware that his client was hiding information and did nothing about it and possibly even colluded in doing so. The court first notes that Mr. Pugatch represented one of the alleged conspiring partners in a 2010 deposition in which the business partner claimed that nothing had been discussed regarding filing bankruptcy with anyone. The court then argues that since Pugatch was involved in email correspondence that predated the deposition, he knew that there was at least some discussion of bankruptcy between his client and others.  The fact that he let his client allegedly lie under oath about a material matter in the case was objectionable.  

However, Pugatch alleges that all of the documents (including the emails discovered after the trial) were, or should have been, produced. Pugatch states that he directed another attorney at the firm, Steven Lippman, to produce the emails in question.  Lippman worked briefly for Pugatch.  But, Lippman has since been disbarred.  He was disbarred in September 2013 after pleading guilty in May 2013 for helping a Ponzi scheme manager make illegal political campaign contributions. 

Pugatch has distanced himself from former colleague, Lippman.  Pugatch has noted his 37-year career and strong reputation in the legal community.  Finding the circuit court’s decision improper, Pugatch plans to file a petition for rehearing.  He feels that the trial record which the appeals court relied on in this case was not fair to him in that it did not provide him ample opportunity to defend himself or provide additional relevant information regarding the production of the emails in question.

For Additional Questions About Legal Malpractice, Contact Knowledgeable Attorneys

If you have more questions about legal malpractice or lawyer ethics, call or email the attorneys at the Patterson Law Firm for guidance. 

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