Budd Larner logo. Courtesy image.

Rocked by significant shareholder defections, Budd Larner is expected to close this summer, according to six people close to the prominent New Jersey law firm.

The Short Hills-based firm has made no public announcement of the closing plans. Firm leaders stated last month that they were "evaluating next steps for the firm."

The firm's remaining executive committee members, Susan Reach Winters and Peter Frazza, did not return messages seeking comment last week and Tuesday. The firm's chief operating officer, Mitchell Rait, declined to comment May 22 and did not return subsequent email messages.

Budd Larner, now in its 85th year, had as many as 75 lawyers about four years ago. But in recent years, the firm's head count has dwindled and it has seen several rainmakers exit just in the last year. The firm currently lists 31 lawyers on its website and offices in four locations: Short Hills and Cherry Hill, New Jersey, as well as New York and Philadelphia.

Just last month, the firm lost at least 18 lawyers, including two members of its executive committee, to other firms.

The recent exits include executive committee member Andrew Miller, who led a group of 15 intellectual property lawyers to the Madison office of Windels Marx Lane & Mittendorf, and another executive committee member, James Fitzsimmons, who joined Drinker Biddle & Reath.

After those exits, Frazza and Winters said in a statement that they were "evaluating next steps for the firm."

The sources who told ALM about the firm's closing plans all spoke on condition of anonymity as they were not authorized to discuss it. The exact timing of the closing is unclear, but all sources pointed to this summer.

Shareholder exits haven't been Budd Larner's only problems in the last year. Its former chief technology officer, Rocco Romeo, was charged by federal prosecutors in late January for allegedly seeking to defraud the firm. Manhattan federal prosecutors allege Romeo and a co-defendant, Jacqueline Galler, created a shell company to bill nearly $900,000 of expenses to Romeo's employer using false charges and invoices over three years.

Prosecutors say the two used the funds to pay personal expenses. Romeo and Galler were charged with four criminal counts, including wire fraud and money laundering-related charges.

(A judge on May 29 dismissed the charges against Galler without prejudice.)

Shortly after Romeo was arrested, Budd Larner filed a civil RICO lawsuit against Romeo and Galler. "The firm suffered significant financial losses as a result of defendants' ongoing pattern of theft, unlawful receipt and conversion of the firm's money," Budd Larner said in its Feb. 25 lawsuit, claiming losses of at least $902,147. (Galler has filed a cross-claim against Romeo in that case, alleging the alleged transactions were performed by Romeo without her knowledge or consent.)

Budd Larner's attorneys in the RICO case, shareholder Philip Clarke Chronakis and associate Adam Hoffman, did not respond to a message seeking comment on Romeo or the firm's closing plans.

Romeo's defense attorney, Jason Ser, of Federal Defenders of New York, did not respond to a request for comment. Galler's attorneys, Benjamin Ostrer and David Darwin of Ostrer & Associates, also did not respond to a message.

The firm that would become known simply as Budd Larner in recent years started in 1934 as a small firm in Newark and grew to roughly 110 lawyers in the 1980s, though its head count would fluctuate over the years with rounds of defections and new hires.

The firm transformed from an insurance defense firm to one offering a range of services, and came to be fueled by a national mass toxic tort litigation practice. Budd Larner became known for its involvement representing plaintiffs in the 1980s and 1990s in civil litigation against tobacco companies over their products' link to cancer in users.

Editor's Note: This article has been updated to reflect that a judge dismissed the charges against  Jacqueline Galler on May 29, 2019, a day after this article was published.