Attorney Accused of Malpractice After Selling Company

Case Overview

This case takes place in Virginia and involves an unauthorized change of the terms of sale and payment between a company and its shareholders. The defendant, an attorney, took a small ownership stake in the company in exchange for legal fees. The defendant then amended the purchase agreement for the pending sale of the company, which significantly reduced the previously agreed purchase price. As a result, the company was sold for substantially less than the previously agreed upon purchasing price. The plaintiff alleges that the defendant breached his fiduciary duty and duty of loyalty, as a shareholder of the company, to both the company and the plaintiff. In addition, the plaintiff alleges that the defendant failed to advise the plaintiff and the company about the changes that were made and having failed to properly advise the plaintiff, acting contrary to the plaintiff’s interests. The plaintiff further argued that the defendant negligently acted to deprive plaintiff, as the majority shareholder, of the opportunity to sell the business in a manner that would have benefited him.

Questions to the Law expert and their responses

Based on the brief case summary, did the defendant’s acts fall below accepted standards?

It would seem that the defendant went way out of bounds based on the contours of the state's agency law. That being said, I would have to know the agreed distribution of authority between them before saying definitively.

Have you ever served as an expert witness on a case similar to the one described above? If so, please explain.

Attorneys have hired me to render an opinion as an economist on economic matters. Perhaps similar issues are at stake in this case.

Please tell us why you’re qualified to serve as an expert reviewer of this case.

As a professor of corporate law, I am qualified to review whether the defendant's acts fall below accepted standards and examine this case as an issue on agency and corporation law. Additionally, I have both a Ph.D. in Economics and a Law degree.

About the expert

This highly qualified and tenured professor of corporate law received his J.D. from Emory University School of Law and PhD in Economics from the University of Washington. He has extensive experience reviewing cases of legal malpractice through his past positions as a Financial Economist with the U.S. Securities & Exchange Commission and as an Assistant Professor at The Wharton School, University of Pennsylvania. Currently, he is a tenured professor of law at a major law school and has authored 60+ articles in peer-reviewed publications on legal and economic methods, financial theory, business associations, and the law of investment management.