HOUSTON – A kidney specialist and his practice have brought a legal malpractice lawsuit against a Richmond, Va.-based law firm, alleging the defendant forced them to accept lesser amounts in monetary benefits.
Nephrology Leaders and Associates, PLLC and founder Dr. Mohammed Atiq Dada sued McGuireWoods, LLP late last month regarding allegedly poor representation in negotiating and effectuating various joint venture agreements with American Renal Associates.
The suit explains that the contracts contained redemption rights or “put rights” clauses, which stated that in the event ARA undertook an initial public offering, the plaintiffs had the right to put, or sell, the shares back into the company and ARA was required to repurchase the shares.
The complainants reportedly had the right to sell up to 11 per cent of their membership in each joint venture in the first year in which the IPO occurs, and up to six per cent in each of the second, third, and fourth years, at public market valuation determined in the IPO.
McGuireWoods, the original petition says, assured the plaintiffs that the Put Right Formula complied with any state and federal law, as well as advised ARA on the legal compliance of its physician joint venture arrangements in connection with the sale of $165 million of stock to the public in its IPO.
Court papers assert that the defendant and ARA devised a new method which would result in less millions being paid to the plaintiff, labeling the move an “inherent and active conflict of interest.” McGuireWoods advising ARA purportedly harmed the complainants.
Per the suit, the respondent attempted to hide any wrongdoing and notified the litigants that the formula they were following was invalid. Such advice was supposedly a front to force the plaintiffs to accept little money than agreed upon and enrich ARA.
“Through a series of breaches of fiduciary duty and unconscionable conduct McGuire Woods held to its other client and despised the plaintiffs, ultimately causing the plaintiffs millions,” the suit says.
The plaintiffs insist that they lost approximately $5 million because of the defendant’s actions for which they sue.
A jury trial is requested.
Attorneys Lance Christopher Kassab and David Eric Kassab of The Kassab Law Firm in Houston are representing the complainants.
Harris County 190th District Court Case No. 2017-21479