Houston Lawyer Alleges Kasowitz Fired Him Amid Compensation Dispute
Former Kasowitz Benson & Torres bankruptcy partner Kyung S. Lee alleges that the firm fired him after he complained about unpaid compensation, after agreeing to pay him $550,000 a year.
January 08, 2020 at 03:18 PM
4 minute read
The original version of this story was published on Texas Lawyer
Houston lawyer Kyung S. Lee has sued his former firm, Kasowitz Benson Torres, alleging it failed to pay him all of the $550,000 it promised after he joined as a partner in Houston in 2018 and then fired him after he complained.
Lee, a bankruptcy lawyer who moved to Kasowitz Benson in September 2018, alleged in a suit filed Tuesday that the firm owes him at least $185,000 in unpaid compensation for his first year there, and also has failed to return his capital account to him.
Now practicing as a solo in Houston, Lee alleged in his petition, filed in State District Court in Harris County, that he was wrongfully excluded from the partnership.
The petition alleges that Kasowitz Benson solicited Lee in 2017 as a potential lateral hire while he was "happily and gainfully" working at midsize firm Diamond McCarthy in Houston. At the firm's request, Lee provided information that he had "forward-looking portable business" for the next 12 months worth at least $750,000, but optimistically as much as $2.5 million.
In June 2018, Kasowitz Benson made Lee an offer calling for annualized base compensation of $550,000 for the balance of 2018. He accepted the offer in August and started at the firm in September, the petition alleged.
However, in early 2019 Lee raised issues about his compensation, and as a result the firm modified the employment agreement to provide for $550,000 in compensation over the first 365 days of his employment, the petition alleged.
"Despite this agreement, defendant paid Lee only $20,000 per month, or $240,000, during the first 365 days of his employment. As of September 5, 2019, defendant still owed Lee the sum of $310,000," the petition alleged.
After Lee repeatedly made requests about the unpaid balance, the firm's executive director Alan Capilupi notified him that he had consulted with partner Marc Kasowitz and the firm would pay him $125,000. Lee alleged that Capilupi offered no explanation for the shortfall, except that the firm took an offset of $51,000 for an auto allowance, LTD insurance and a profit-sharing contribution.
Lee again emailed Capilupi and Kasowitz, expressing his "deep frustration" with the situation, noting that without the full payment he would not be able to pay taxes for 2018 and 2019. Kasowitz responded, the petition alleged, by making "false allegations" about Lee.
Lee's attorney, Andrew Golub of Dow Golub Remels & Gilbreath in Houston, declined to characterize those allegations in an interview Wednesday.
On Oct. 16, 2019, Lee discovered that the firm had not paid his draw for October, and when he questioned Capilupi, the executive director responded that it was done at Kasowitz's instruction, the petition said.
Lee complained again via email, and on Oct. 18, Capilupi notified Lee that he was fired immediately.
Kasowitz did not immediately return a call seeking comment Wednesday. In response to an emailed request for comment, a spokesperson for the firm wrote: "Kyung Lee's allegations are false, and his claims are unfounded."
Lee's suit alleges breach of contract and seeks an accounting of his partnership interest. He alleged he made a $50,000 capital contribution in early 2019 and was assigned a 0.0895118% interest in the firm's profits and a 0.0006157% interest in the firm's capital.
Additionally, Lee alleged that the firm's executive committee did not properly vote to involuntarily remove him from the partnership.
The story has been updated to include a comment from Kasowitz Benson.
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