NEW JERSEY LAW JOURNAL - APRIL 26, 1993
'SELF-INSURANCE' HAS ITS RISKS
By Tim O'Brien
Is Lampf, Lipkind, Prupis, Petigrow & LaBue on its last leg? According to the head of the West Orange firm, maybe so. Facing a judgment of close to $538,000 from a malpractice verdict on April 6, senior partner Neil Prupis is pleading with the judge in the case for "a stay of execution" of the judgment.
"My firm will be shut down if plaintiff is permitted to execute and levy against the firm's limited assets and cash receipts while an appeal is pending," pleads Prupis in an April 16 certification to the court.
Prupis reminds Superior Court Judge Donald Goldman that the firm has no malpractice insurance covering the judgment, adding, "The firm does not presently have sufficient cash reserves to pay the judgment or to post a bond or other security pending appeal>'
A six-member Essex County jury found the 17-lawyer tax boutique guilty of negligence in its legal representation of the profit-sharing plan of Marprowear Corp., a Fairfield clothing wholesaler, when its partners talked their client into investing almost $450,000 in a Florida surety bond company in 1986. The surety, Southeastern Insurance Group Inc., was controlled by Lampf, Lipkind's top partners, who raised most of the funds in 1986 for SIG's $30.1 million private placement by touting the stock units to their clients.
The certification accompanied several post-judgment motions filed by the firm's lawyer, James Keegan of West Orange's Bendit, Weinstock & Sharba. Keegan is asking Goldman to either dismiss the complaint, issue a judgment for Lampf, Lipkind notwithstanding the verdict, or order a new trial. Keegan argues, among other things, that the case belongs in federal court because the plaintiff profit-sharing plan falls under the jurisdiction of the federal ERISA statute.
If Goldman doesn't throw out the judgment---representing Marprowear's $450,000 investment plus interest---or order a new trial, Keegan is asking him to stay execution of the judgment, which was signed last Wednesday. Keegan says that Lampf, Lipkind is so cash poor that it can't even afford to buy a bond pending the appeal. There is no explanation about why the firm, which is self-insured, has not set up an escrow fund during the last three years in anticipation of a possible judgment.
Keegan did not return phone calls. But in his certification he throws his firm on the mercy of the court, asking Goldman not to think simply of the handful of equity partners who must shell out the $538,000, but the "45 people who will lose their jobs if the firm is closed." Prupis then asks the judge to think of the "substantial client base of longstanding clients who will suffer undue hardship if the firm is closed in the face of plaintiff's execution of any judgment."
Plaintiff attorney Glenn Bergenfield, a Princeton solo, says he's "surprised" by Lampf, Lipkind's representation saying, "I don't think that they would actually close up their practice---it's been a successful practice, and I can't imagine that this lawsuit would be...