Saturday, March 1, 2014

Loans To Lawyer Against Settlement Proceeds Not Covered By Client Protection Fund

The Maryland Court of Special Appeals rejected the appeal of a New Jersey company that was denied compensation from the Bar's Client Protection Fund.

The court held that the claim had properly been rejected by the fund's trustees.

American Asset Finance LLC is in the business of purchasing from attorneys proceeds of settlements that have not yet come to fruition. The attorney receives a lump sum in exchange for the promise to pay the company when funds are received.

The company made four loans to attorney Bradley Schwartz. He was later disbarred by consent for misappropriation. The company turned to the fund for payment of the loans.

The court here agreed with the trustees that the company's interest was not the product of an attorney-client relationship with Schwartz. Nor was the situation the type of fiduciary relationship governed by Rule 1.15.

Thus, there was no basis to award compensation. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2014/03/loans-to-lawyer-against-settlement-proceeds-not-covered-by-client-protection-fund.html

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