David Stern David Stern

David Stern, a founding partner of the Philadelphia workers' compensation and Social Security disability law firm previously known as Pond Lehocky Stern Giordano who sued the firm last week to dissolve the partnership, is now seeking an emergency injunction, alleging that he's been unlawfully expelled from the partnership and that the firm is now taking steps to "steal" his clients and cases.

On Dec. 3, Stern filed a complaint in the Philadelphia Court of Common Pleas against the firm, as well as against managing partner Samuel Pond and the firm's two other equity partners, Jerry Lehocky and Thomas Giordano, alleging Pond had engaged in "continued efforts to coerce Stern into forfeiting his partnership interest" while the other partners stood idly by.

On Wednesday, the defendants fired back with preliminary objections, arguing that the matter must be sent to arbitration under the partnership agreement.

On Thursday, Stern followed up with the injunction request, alleging that the partners have begun to retaliate against him because of the lawsuit.

"On December 10, 2019, in furtherance of the Pond defendants' wrongful conduct, oppression and freezing out of Stern, and in retaliation against him for having exercised his statutory right to seek dissolution, the Pond defendants have purportedly caused Stern to be 'expelled' from the partnership, without any legitimate basis for doing so," Stern said in his memorandum in support of the injunction petition. "The 'expulsion' is null and void as a result of the Pond defendants' unlawful conduct."

The memorandum continued, "The Pond defendants have and continue to interfere with Stern's relationships with his clients having delivered to them, within minutes of his alleged 'expulsion,' emails or letters (the 'client Selection notices') pressuring them into deciding whether to sever their relationship with Stern in favor of their new venture, 'Pond Lehocky.'"

An outside press contact for the firm sent out an email Tuesday night announcing the firm had rebranded as simply Pond Lehocky. The firm's website has since been updated to reflect the name change, and Stern's profile has been removed.

On Friday morning, Judge Gary Glazer of the Philadelphia Court of Common Pleas ordered the parties to appear for a conference Dec. 20.

Stern's memorandum alleged the firm has locked Stern out of its computers and phones, cut off communication between him and his clients and staff, and barred him from entering the firm's offices or attending its events. The memorandum further alleged that Pond has informed Stern that Stern owes the firm "approximately $311,000″ but has failed to provide any basis for that figure.

The memorandum also alleged the firm is continuing to unlawfully cut Stern out of a new venture in Washington, D.C., and a transaction with the Philadelphia 76ers professional basketball team.

"The Pond defendants have thus executed on a plan to usurp the opportunities of the partnership in favor of a new venture, a plan which, upon information and belief, the Pond defendants have had in the works since as early as June of 2019," the memorandum said.

In Thursday's petition for an injunction, Stern reiterated the position he took in last week's complaint that a receiver or special master must be appointed to oversee the wind-up of the firm's partnership.

"Here, the Pond defendants are attempting to steal Stern's and the partnership's assets— i.e., clients and cases—tortiously, and in violation of his fiduciary duties and ethical obligations," Thursday's memorandum said.

Thursday's memorandum came one day after the defendants filed preliminary objections.

In their filing Wednesday, the defendants said Stern's "lawsuit demonstrates a shameless and reckless disregard for the lives of the tens of thousands of clients and hundreds of employees of Pond Lehocky and their families."

"Stern is seeking the dissolution of a leading law firm in an illegitimate attempt to extract more money than he would be entitled to under the partnership agreement he signed," the defendants argued.

They also said they "vehemently denied" what they called Stern's "grandiose allegations."

In addition, the defendants argued that Stern's claims must be arbitrated per the partnership agreement.

"The parties, and David Stern in particular, agreed on multiple occasions in signed writings that any disputes among them would be resolved through private binding arbitration," the defendants said in their objections.

Stern's lawsuit was filed last week following failed negotiations for the firm to either buy Stern out of his ownership stake or allow him to stay on as a partner, according to the complaint.

The complaint alleged those talks were precipitated by a revised partnership agreement originally circulated to Stern and the other partners by Pond in the winter of 2018-19. Stern and the other partners expressed concerns over certain aspects of the agreement, including a provision that Pond would remain the managing partner until either his death or retirement, rather than upon turning age 72, as the previous agreement had called for, the suit claims.

According to the complaint, the matter was put on hold until June of this year, when a similar partnership agreement was circulated, which Pond allegedly "demanded" his fellow partners sign. Eventually, they did.

The complaint alleged that Pond believed Stern had told him to retire and had questioned the monthly management fee Pond collected in addition to his partnership draws and distributions. Stern said in the complaint that neither allegation was true.

"Based upon these two imaginary grievances, the relationship between Pond and Stern has become irreconcilable, even though months later, Pond ultimately admitted to Stern that Stern never told him to retire, nor questioned his management fee," the complaint alleged.

Following the signing of the June agreement, the complaint alleged, Pond "has attempted to freeze Stern out of the partnership and force him to leave without fair compensation for his ownership interest in the firm."

 

The defendants are being represented by Abraham Reich of Fox Rothschild in Philadelphia. Reached Friday for comment on Stern's preliminary injunction petition, Reich said, "We regret that Mr. Stern saw the need to take this private dispute public. The focus of the firm is on the well-being of the hundreds of employees and thousands of clients, and the partners will not deviate from that mission."

Stern is represented in the suit by Benjamin Garber of Braverman Kaskey in Philadelphia. Garber did not immediately respond to a request for comment on the injunction petition.

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