Mayer Brown has been hit with another lawsuit regarding its role in the collapse of defunct futures and commodities broker Refco.
The new action was filed earlier this week (21 August) by Refco trustee Marc Kirschner and aims to recoup $2bn (£1bn) for creditors from a number of the company’s advisers.
The claim alleges that Refco insiders managed to maintain the illusion of operational strength and stability long enough to line their own pockets with the “active assistance of the company’s legal and financial advisers”.
Mayer Brown, formerly Refco's main legal adviser, is named alongside accountancy groups Grant Thornton, Ernst & Young and PricewaterhouseCoopers. Bank of America, Deutsche Bank and Credit Suisse Group are also named in the suit.
In a statement, Mayer Brown said: "We are... disappointed that the litigation trustee chose to name our firm in this suit. This suit is premised upon the bankruptcy examiner's report which acknowledged that 'several significant factual and legal defenses are potentially available to all parties against whom claims may be asserted'. We intend to assert all available defenses and defend ourselves with vigor."
The news comes after the Chicago-based law firm was hit with a $245m (£119.5m) lawsuit by a former creditor of Refco last month. Thomas H Lee Partners – which acquired a controlling stake in Refco in 2004 – filed a claim in New York alleging that Mayer Brown had failed to inform it of the true state of Refco’s finances.
Refco filed for Chapter 11 bankruptcy in 2005 after it emerged that the company had hidden millions of dollars worth of bad debt. It later liquidated its operations.
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