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An 8-Year Legal Battle Comes to an End, Creditors Awarded Millions

Posted on April 27, 2015 by Victoria Davis

By Robert S. Bernstein, Esq., Co-Managing Partner

It’s a small fee by bankruptcy mega-case standards, but it was huge for us.  Recently, we were awarded the biggest fee in our firm’s history, $2.5 million, as a result of our eight-year battle for creditors against the former officers and directors of the failed Lemington Home for the Aged in Pittsburgh.

The Home went into Chapter 11 in 2005 and the officers and directors determined to close it, we think, due to some mismanagement (which may have resulted in the tragic death of a resident).  The case had a great deal of intrigue, including a number of broken and disappearing computer hard drives which, when reconstructed, contained damaging evidence.

After five years of pretrial wrangling and discovery, and two trips to the Circuit Court of Appeals, a jury trial was held in 2013.  The jury awarded the creditors $5.75 million against the officers and directors, including punitive damages! After another appeal to the Circuit Court, we collected a reduced verdict of $4 million.

The Bankruptcy Judge agreed that our firm had done a stellar job of dogging these people for eight years, and funding the costs and expenses on our own with only the result to compensate us.  He was right.  The result did compensate us (in money).  But it also compensated us in pride.  We stood up against a group of politically connected directors and a powerful insurance company, refusing to cave in and refusing their meager settlement offers.  We stood up to this group of people that ruined the oldest African-American nursing home in the country, and that destroyed the value in the Home, without a care about the many people and companies who kept that Home in business by extending credit.

We are proud to have been able to stand up to them and carry this litigation to its long and successful conclusion.  Yes, it was a big fee for our firm.  Yes, that feels good.  But it also feels good to have succeeded and provided a recovery for creditors, where none would have otherwise been available.

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One thought on “An 8-Year Legal Battle Comes to an End, Creditors Awarded Millions”

  1. Terry Brown says:
    April 28, 2015 at 12:15 pm

    Congratulations, it was a hard fought battle. I am proud to have been a small part.

    Reply

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