A closely watched legal battle is set to unfold in a Florida courtroom next week as U.S. law firm Simpson Thacher & Bartlett prepares to defend itself against malpractice allegations tied to a stock transaction that preceded the collapse of insurance services company Patriot National.
The dispute traces back more than a decade to a deal in which the Fort Lauderdale-based company sold a portion of its publicly traded shares to a group of hedge funds. Former Patriot National chief executive Steven Mariano contends the law firm failed to include safeguards in the transaction that would have prevented the investors from engaging in short-selling of the company’s stock.
According to Mariano, the absence of those protections triggered sustained downward pressure on Patriot National’s share price beginning in late 2015, creating a financial spiral from which the company never recovered. Patriot National ultimately sought bankruptcy protection in early 2018.
Mariano’s legal team argues the law firm’s handling of the transaction directly contributed to the company’s downfall. His attorney has indicated that damages exceeding $200 million will be sought during the proceedings.
Simpson Thacher has firmly rejected the accusations, maintaining that its legal advice and representation met professional standards. The firm argues the claims are unsupported and that Mariano cannot establish either causation or financial harm resulting from its work. It has said it intends to contest the allegations vigorously at trial.
Opening statements are scheduled to begin on Wednesday before the 17th Judicial Circuit Court in Broward County, Florida.
The litigation originally included claims against another law firm, Kasowitz LLP. Mariano alleged that Kasowitz, which he later retained to pursue litigation against the hedge funds, failed to alert him to what he describes as Simpson Thacher’s earlier professional negligence.
That portion of the case has been placed on hold, with its future likely to depend on the outcome of the malpractice claims now heading to trial. Representatives for Kasowitz have not publicly commented on the matter.
Simpson Thacher previously sought to end the case before trial, arguing that Mariano lacked evidence to support allegations of manipulative short-selling or to show that the firm’s work caused Patriot National’s eventual bankruptcy. However, the court declined to grant summary judgment, allowing the dispute to proceed before a jury.
Legal malpractice claims rarely advance this far. Such cases often face significant legal hurdles because plaintiffs must prove not only that an attorney breached professional duties, but also that the alleged misconduct directly caused measurable losses. Many are resolved before reaching a courtroom due to the substantial costs and litigation risks involved for both sides.
### Quinn Emanuel Ends Fee Fight in 3M Earplugs Settlement
In a separate legal industry development, Quinn Emanuel Urquhart & Sullivan has withdrawn its objection to the distribution of attorneys’ fees arising from the $6 billion settlement involving 3M combat earplugs litigation.
The firm had argued it deserved a larger share of the legal fees, citing its extensive involvement in the long-running litigation. However, the challenge was dropped after a federal judge signaled support for a court-appointed special master’s proposed allocation.
Under the current plan, Quinn Emanuel has been awarded interim compensation of $11.2 million, with the possibility of additional payments once the final fee pool is approved.
The proposed distribution allocates the largest share of fees to Aylstock, Witkin, Kreis & Overholtz, followed by Seeger Weiss and Ciresi Conlin. None of those firms objected to the recommended allocations. The underlying litigation concluded with one of the largest mass tort settlements in U.S. history, while 3M has consistently denied wrongdoing.
### Former Clifford Chance Partners Challenge Compensation Clawback
Meanwhile, two former partners of Clifford Chance have filed suit in New York after the international law firm sought to reclaim millions of dollars in compensation paid before the pair departed for rival firm Sidley Austin.
The case is expected to draw attention within the legal industry because it could provide an unusual public examination of the partnership agreements that govern compensation and departures at major global law firms.
