David Bershad, Milberg.

The onetime securities class action powerhouse Milberg and its successor Milberg Tadler Phillips Grossman have been hit with another lawsuit by a former partner who claims he is being denied millions he is owed even as he suspects the firms have been raking it in.

David Bershad, a onetime partner at Milberg, said in a complaint filed last month that he is still owed almost $10 million by his former firm, which he said reorganized so it could avoid paying him. He said the only person owed more than him is Steven Schulman, another former partner who sued earlier this year for more than $15 million.

Discovery is underway in Schulman's case. The defendants filed answers earlier this month that denied nearly all of the allegations against them.

Bershad and Schulman both left Milberg during a criminal investigation into payments the firm made to the plaintiffs who led its class actions. They ended up pleading guilty to conspiracy and being sentenced to six months in federal prison. They also agreed to forfeit millions of dollars, but their disputes with their former firm didn't end with their stints behind bars.

Bershad's suit largely echoes, and in some cases lifts entire paragraphs from, Schulman's. Both men accuse Milberg, Milberg Tadler and partners Ariana Tadler, Peggy Wedgworth, R. Glenn Phillips and Marc Grossman of using the 2018 combination of Milberg and the mass torts firm Sanders Phillips Grossman to transfer assets in a move designed to frustrate judgment creditors like them.

While both men say they ended up having to arbitrate against Milberg to get what was owed to them, and both say in their complaints that they got those arbitration awards confirmed as judgments, they said the payout period has dragged on for far longer than it should have because of caps in the Milberg partnership agreement.

Bershad said the payments stopped flowing last September with a letter from Tadler that explained that Milberg lacked “the operating cash or profits to continue.” According to Bershad, Schulman received three more months' worth of payments than he did. Schulman said in his complaint that he received payment for those months after taking “certain actions to enforce his rights” last year.

According to Bershad's complaint, he sought more information from Tadler and attended a presentation where he learned more about Milberg's finances and the relationship between the two firms, but didn't receive a reply to his request for more information after some two months of waiting. He said he agreed not to disclose information from that presentation.

Leslie Corwin of the law firm Eisner, who represents Schulman, said his client is still trying to get what he's owed from Milberg and its successor under the aegis of a 2009 case that was filed to confirm the arbitral award. Asked whether he would seek to force the firms into bankruptcy, he said, “bankruptcy is always an option. In my opinion, bankruptcy is the court of last resort.”

“Every month that goes by, they owe him money,” he said. “We've served restraining notices and we're trying to find assets.”

Clifford Robert of Robert & Robert, who represents Milberg Tadler and its partners Phillips and Grossman, said in an email, “these baseless lawsuits are the epitome of chutzpah and hypocrisy.”

Morrison Cohen's David Piedra, who represents the legacy Milberg firm, declined to comment.

Lawyers for Bershad, including Samuel Portnoy and Daniel Weinberger of Gibbons, didn't respond to requests for comment.