LeClairRyan Founder and Officers Reach $10M Insurance Settlement With Bankruptcy Trustee
The settlement, if approved, will free the former officials at the firm from conspiracy, breach of fiduciary responsibility and trade secrets claims. But other claims are still pending.
November 22, 2021 at 01:55 PM
2 minute read
Law Firm Bankruptcy and Dissolution
Twenty-six former high-level figures at LeClairRyan, including firm founder Gary LeClair, CEO Eric Gustafson and former general counsel Lori Thompson, have reached an agreement with their insurer and the bankruptcy trustee for the defunct firm to settle a set of pending claims against them for $10 million.
Trustee Lynn L. Tavenner, the 26 defendants, and Columbia Casualty, which issued the firm's management liability policy, participated in an all-day settlement conference Nov. 16 in which Columbia agreed to pay the trustee $9.425 million to resolve claims including conspiracy, breach of fiduciary duty, and trade secrets against the defendants, and an additional $575,000 to satisfy claim expenses. Together, this sum equals the $10 million liability limit on the Columbia policy.
The settlement does not address additional "garden variety" bankruptcy claims against the defendants under Chapter 5 of the bankruptcy code, nor does it address claims under Virginia state law for unjust enrichment, conversion or unlawful distribution.
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