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Recourse for Conflicts of InterestWhat is the name of your state? IL Two Partner Corporation. Cummulative Voting A=49% B=51% Partner A frozen out after discovering embezzlement by Partner B and reporting misconduct to Corporate attorneys. Partner A files Derivative complaint individually and on behalf of Corporation naming Corporation and Partner B individually. Corporate lawyer files appearance jointly representing Corporation and Partner B and answers complaint. Corporate lawyer next files counterclaim on behalf of partner B and corporation against Partner A and 4 additional parties. Lawyer proceeds to milk the corporation dry in fees as he was previously an accomplice aiding and abetting in the failed freeze out and usurpation by Partner B. Lawyer failed to identify cumulative voting rights and dead lock issue. Lawyer also represented Partner B in various personal matters involving usurpation and conversion of corporate opportunities and assets. Partner B provided a waiver of all conflicts on his behalf and on behalf of the corporation. 1. conflict is because the derivative action required the corporation to investigate and respond to each allegation against Partner B. The attorney represented both the corp and partner B and had conflicting duties. RPC states disclosure requirements and waiver was required to be executed by Partner A prior to participating in settlement. 2. A settlement was made by partner A on the counterclaim with the attorney representing the corporation. Lawyer next aggregately settled all claims between the corporation and Partner B. 3. A Trustee was appointed to effectuate the settlement. Attorney proceeded to next represent the Trustee and obtained his full release from the trustee. Trust agreement states only the trustee has the right to bring action on behalf of the corporation. What recourse and remedies are available? |
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