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This two-part article describes recent developments with respect to unfinished business claims, including a thorough review of recent decisions in New York and California; discusses the implications that those cases may have on law firm partnerships; and provides some suggestions as to what law firms may do to avoid unfinished business claim litigation. We begin with a review of recent decisions.
Background
Litigation surrounding unfinished business claims has been actively pursued by bankruptcy trustees to recover the profits generated by the work of law firms hired by former clients of a dissolved law firm. The theory of recovery is predicated on an alleged fraudulent transfer made by a dissolving law firm by reason of its waiving any claims that it may have against departing partners for profits from future work performed on behalf of former clients of the firm.
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