Morrison Cohen has settled a long-running legal malpractice suit brought by several entrepreneurs who claimed the firm allegedly bungled a complex transaction, costing them $45 million.

The plaintiffs, including restaurateur Jon Bloostein and several owners of the apparel company Blue Cast Denim Co., said in their 2012-filed suit that they struck deals in 2007 with the Japanese bank Nomura and a financial services company called Stonebridge Capital that were supposed to help them transfer their companies to an employee stock ownership plan, or ESOP, and reap the benefits of the sale, in the form of loans from Nomura, while avoiding capital gains taxes.

But Morrison Cohen and partner Brian Snarr, who were advising them, missed a change in the final deal documents that made it easier for Nomura to declare a default and call in its loans, the plaintiffs alleged. Once a default was declared, the plaintiffs said they went to court to fight it, but Morrison Cohen “conceded” its unforced error. Nomura was allowed to sell the collateral backing its loans, triggering huge tax liabilities for most of the plaintiffs and dire economic circumstances for Bloostein, he and other plaintiffs alleged.

In February, Manhattan Supreme Court Justice Andrew Borrok ruled that Morrison Cohen could not shift blame to Brown Rudnick, which had authored a tax opinion as part of the deal. The judge wrote that the tax opinion is “simply not what caused the harm/loss here,” and let the plaintiffs' claims against Morrison Cohen move forward. Morrison Cohen appealed that decision.

Most recently, Borrok signed a June 24 document that simply states the case has been “settled.” The document also indicates “case disposed.”

In an email to ALM, David Piedra, Morrison Cohen's general counsel, confirmed that the 7-year-old case was settled but indicated that he couldn't comment on the settlement terms. “The matter has been amicably resolved by mutual agreement,” he said. “We are not at liberty to comment further.”

The plaintiffs' attorney, James O'Brien, a partner at Pryor Cashman, didn't respond to a request for comment on Tuesday.

At one point, the malpractice case had entangled three law firms, including Morrison Cohen, Brown Rudnick and Stroock & Stroock & Lavan. But two years ago, Stroock, which Brown Rudnick had sought to hold liable for whatever it might be found to owe Morrison Cohen, freed itself from the case. Stroock had argued that it was released from claims as part of a settlement with Stonebridge.