A federal appeals court has reinstated a fraud lawsuit against K&L Gates and two of its former partners alleging that the attorneys exploited their past representation of a publishing executive to undermine his efforts to acquire assets from a bankruptcy sale.

Roy Brown, CEO of Brown Publishing Co., retained K&L while making a bid to take control of the company's assets by Chapter 11 through another company, Brown Media.

Edward Fox and Eric Moser, then partners at K&L, represented Brown in the lead up to the bankruptcy, but the firm told Brown to obtain new counsel before the sale, according to court papers.