A $214 million malpractice lawsuit lodged this week by billionaire Ira Rennert served up a reminder that a merged law firm—in this case, Arnold & Porter Kaye Scholer—can't always avoid fallout from events that trace back to one of the firm's predecessors.

Rennert's investment company, The Renco Group Inc., filed suit on Tuesday in New York state court, alleging malpractice against his former lawyers from Kaye Scholer, now part of Arnold & Porter Kaye Scholer after a 2016 merger. The malpractice claim arises out of Kaye Scholer's defense work for Renco in a case brought by the bankruptcy trustee for Magnesium Corp. of America, a company that Rennert controlled for several years before it went bankrupt in 2001.

In that underlying case, MagCorp's bankruptcy trustee accused Rennert of siphoning more than $118 million from the magnesium company's coffers and alleged that the billionaire put at least some of that amount toward building a palatial, beachfront estate in the Hamptons on New York's Long Island. Ultimately, a federal jury sided with MagCorp's trustee and put Renco on the hook for damages of more than $117 million, an amount that, thanks to interest, later increased in a final judgment to about $214 million.

Although most of Renco's allegations in the malpractice suit filed Tuesday relate specifically to work that happened when Kaye Scholer was still an independent firm, the complaint does name Arnold & Porter Kaye Scholer as a defendant. In that respect, Arnold & Porter Kaye Scholer is hardly alone among large law firms that have merged, only to later see the combined firm face claims that related specifically back to one of the predecessor firms.

As another recent example, Norton Rose Fulbright has found itself in a similar situation after combining with Chadbourne & Parke at a time when that firm faced gender bias allegations from former female partners. Not long after the Norton Rose Fulbright deal took effect in June, the female former Chadbourne partners leading the gender bias suit added the combined law firm as a defendant.

Rennert has denied that he looted MagCorp and has maintained that, at the time he transferred money out of the company, it was financially sound. The malpractice suit accuses Kaye Scholer of missteps that led to what Renco considers an “inexplicably inconsistent” verdict in the looting case, that resulted because the jury effectively conflated federal and state law.

Renco alleges that Kaye Scholer—led by former partner Peter Haveles, who has since moved to Pepper Hamilton—could have done more to avoid such an inconsistent verdict. Specifically, Renco said that the Kaye Scholer team could have objected to jury instructions before the trial, or it could have sought a mistrial immediately after the verdict came down. Instead, the defense team asked for a mistrial later, prompting a judicial ruling that found Renco's lawyers should have raised their objection earlier.

“After the verdict was read, the judge repeatedly asked counsel whether they had any objections or issues to raise before the jury was dismissed,” wrote Rennert's lawyers in the malpractice suit, led by Steven Kaufman of Kaufman & Company. “Rather than raising an appropriate objection at that time, defendants … responded that counsel saw no reason why the jury should not be dismissed, which resulted in a waiver of the … objection.”

A spokeswoman for Arnold & Porter Kaye Scholer said in an email on Wednesday that the firm doesn't comment on pending litigation, but added, “We will vigorously defend these allegations and we are confident that we have fulfilled our professional obligations.”