Medley Management Inc. is accusing law firm Lowenstein Sandler LLP of malpractice and professional negligence, alleging the investment business was poorly served when a subsidiary filed for bankruptcy and its longtime attorneys became “intoxicated” by fees, WSJ Pro Bankruptcy reported. Lowenstein had been representing Medley Management in corporate and securities matters for years, and said the law firm could also counsel subsidiary Medley LLC on its 2021 bankruptcy, according to a complaint filed Friday in New York state court. Medley Management said the potential conflicts “should have been apparent to any reasonable and prudent lawyer.” The lawsuit said Lowenstein should have told Medley Management that the parent and its bankrupt subsidiary needed separate independent directors and counsel, not just a restructuring subcommittee of the Medley Management board. The restructuring subcommittee’s fiduciary duties were to Medley Management shareholders, whose interests conflicted with those of Medley LLC creditors, according to the complaint. Lowenstein said yesterday that the lawsuit is without merit.
