The New York Court of Appeals has ruled that bankrupt law firms cannot claw back unfinished-business profits on hourly fee matters. stockelements
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The court was ruling on a question from the 2nd US Circuit Court of Appeals which arose from litigation involving the failed firms Thelen and Coudert Brothers. The Court of Appeals for New York said in its judgement: ‘We hold that pending hourly fee matters are not partnership ‘property’ or ‘unfinished business’ within the meaning of New York's Partnership Law. A law firm does not own a client or an engagement, and is only entitled to be paid for services actually rendered.’ Bankruptcy trustees had been seeking the allowance of the concept so that they could recover more money for creditors. Source: ABA
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