Miami Herald Reports on Lawsuit by BAC Client Lourdes Castillo Against Dori Foster-Morales

November 1, 2024 – The Miami Herald reports today on a lawsuit by Brewer client Lourdes Castillo against former Florida Bar President Dori Foster-Morales and her law firm. As reported, Castillo alleges that the firm’s legal malpractice, breach of contract and breach of fiduciary duty in connection with her divorce proceedings cost her more than $1 million.

“The complaint says it all: when our client’s divorce proceedings became complex and contentious, she retained defendants to protect her interests,” said Brewer partner William A. Brewer III. “Unfortunately, defendants were regularly unprepared for key court and arbitration events, caused Ms. Castillo to unwittingly waive substantial rights, and abandoned her during the most important time of her life.”

Brewer told the Herald, “defendants do not appear to dispute any of the claims and allegations against them – choosing instead to peddle a false narrative about fee arrangements involving a former client. Ms. Castillo is shocked by the conduct and the notion that a law firm would so blatantly disregard its professional obligations.”

Law360 Reports on Lawsuit Against Former Florida Bar President

October 21, 2024 — Law360 reports on a lawsuit by Brewer client Lourdes M. Castillo against Dori Foster-Morales and her law firm in an article titled, "Ex-Florida Bar Prez Accused of Malpractice in Divorce Case." As reported, Castillo is a former Foster-Morales' client who alleges Foster-Morales "breached her duty by dragging out the proceeding and causing damages stemming from a disagreement over a marital residence."

Filed in Miami-Dade County Civil Court, the four-count complaint accuses Ms. Foster-Morales, a former Florida Bar president of breach of contract, breach of duty, malpractice, and breach of implied covenant of good faith and fair dealing. 

Brewer Managing Partner William A. Brewer III told Law360 that the defendants failed to protect his client's rights.

"The complaint says it all: when our client's divorce proceedings became increasingly complex and contentious, she retained defendants to protect her interests," Brewer said. "Unfortunately, they were regularly unprepared for key court and arbitration events, caused Ms. Castillo to unwittingly waive substantial rights, and abandoned her during the most important time of her life."

To read the full report (subscription required), click here. 

Daily Business Review Reports on Lawsuit Against Ex-Florida Bar President

October 18, 2024 — The Daily Business Review reports on a lawsuit filed by Brewer, Attorneys & Counselors client Lourdes Maria Castillo against the law firm Foster-Morales and its founder, former Florida Bar President Dori Foster-Morales. According to the report, Castillo claims that, "despite Foster-Morales assuring Castillo of her skills, the defendant failed to exercise a reasonable standard of care and competence and breached fiduciary duties while representing her." 

"The complaint says it all: when our client's divorce proceedings became increasingly complex and contentious, she retained the defendants to protect her interests," says William A. Brewer III, partner at Brewer and counsel to Castillo. "Unfortunately, they were regularly unprepared for key court and arbitration events, caused Castillo to unwillingly waive substantial rights, and abandoned her during the most critical time of her life."

Among other things, the report states that Castillo claims Foster-Morales "pressured her to accept a buyout of the marital residence from her ex-husband for half the property's value, threatening to withdraw as counsel if Castillo refused to accept an immediate settlement."

The report notes that Castillo rejected the offer. Castillo retained new counsel and secured a global settlement of all claims for nearly $1 million more than the defendants had urged her to accept. 

Castilllo is seeking damages in excess of $1.1 million. Read more here.

Famed Texas Company AmeriTex Faces Lawsuit for Allegedly Falsifying Projections and Breaching Its Obligations to Equity Holder

Dallas, TX … October 3, 2024 – Brewer, Attorneys & Counselors announced today that its client, a former C-Suite executive of AmeriTex Holding, LLC (“AmeriTex”), the parent of AmeriTex Pipe & Products, filed claims against the company, its CEO Kevin Thompson, and director Thomas Murphy, alleging that key executives conspired to contrive financial information to avoid paying him “fair value” for his stake in the company. The filing also names the national accounting firm Marcum LLP and the law firm Kelly Hart & Hallman – both of which allegedly played a role in the claimed conspiracy.

Filed in the 456th Judicial District of Guadalupe County, Texas, on October 3, 2024, the claims lay bare the inner workings of a scheme to deny the executive, Christopher Podlasek, financial benefits to which he is entitled by creating phony projections which understate the multi-billion value of AmeriTex. According to the filing, defendants “manufactured a set of false financial projections (that wildly diverged from the projections AmeriTex recently used in the ordinary course of its business) to avoid paying Podlasek for his 1.5% equity interest.”

Founded in 2009, AmeriTex manufacturers water drainage products used in commercial construction and public works projects. The company rose to prominence as the largest player in Texas’ reinforced concrete pipe industry – which is key to the state’s exploding infrastructure needs and accounts for more than $1.2 billion in economic output.  According to the company, its three campus operations are larger than all its competitors’ storage areas combined.

The lawsuit claims that the phony financial projections were created at the same time AmeriTex presented differing, bullish forecasts to the most significant credit rating agencies in the world, including S&P and Moody’s, multinational financial institutions Bank of America and U.S. Bancorp, and institutional investors when it raised $530 million in an October 2023 high yield bond offering.  Months later, AmeriTex used the same bullish outlook to secure a new $155 million credit facility from Bank of America.

“Our client believes he was victimized by a scheme to avoid paying him ‘fair value’ for his stake in the company he helped build,” says William A. Brewer III, partner at Brewer and counsel to Mr. Podlasek. “Apparently, AmeriTex and its principals seek to keep financial benefits to which they are not entitled. Lost in the story of this Texas company is the way it attempted to devalue its worth and what it owes a former member of the company. It’s a disturbing tale for those in Texas who have witnessed AmeriTex secure state-funded projects, dominate key markets, and realize astronomical growth.”

The legal claims allege that AmeriTex recruited Podlasek to be Chief Financial Officer during a time of fiscal turmoil – to help it stabilize its back office and finance function, raise capital, and open new facilities. He did so successfully. During Podlasek’s tenure, AmeriTex grew its annual revenue from approximately $100 million to over $320 million. It also secured massive projects and embarked upon new markets – earning a glowing endorsement from Texas Governor Greg Abbott.

Seniors Scammed: Dallas CBS Affiliate Produces Story About Brewer Storefront Client

September 25, 2024 – CBS News Texas reports on how Brewer Storefront assisted client Shirley Ison–Newsome, 77, after she was the victim of a predatory financial scam like many seniors face. 

The investigation, “Caught in the Scam,” reports Ms. Ison-Newsome lost more than $50,000 after her bank, Chase, allegedly failed to warn her of fraudulent activity. She also said a bank employee at her local Chase branch promised her that her wire transfer to China had been caught and stopped in time, but days later she learned the financial transaction had gone through.  

With the help of the Brewer Storefront, the community service affiliate of Brewer, Attorneys & Counselors, Ison-Newsome resolved a legal action with Chase to the satisfaction of the parties.  

"It can't be that at the end of the day that it is just too bad, especially when, importantly, [Ison-Newsome] was extremely vigilant,” said Brewer Partner Will Brewer IV. “She immediately alerted her trusted financial institution. That's everything that you would expect someone to do to fix the situation." 

New York Sun Editorial Highlights NRA Legal Success

August 1, 2024 – The New York Sun published an editorial today, “New York’s Gift to the NRA,” that chronicles the “volley of victories” achieved by Brewer client, the NRA. The editorial reports that a New York judge “rebuffed the effort by Attorney General Letitia James to impose a ‘monitor’ on the NRA, which she’d earlier sought to dissolve.”

The editorial also comments on the NRA’s recent unanimous victory before the U.S. Supreme Court – in response to a financial “blacklisting campaign” undertaken by former New York state financial regulator Maria Vullo.

The Sun writes, “These victories couldn’t be more timely” as America nears the upcoming election.

Third Lawsuit Claims Biote CEO, Chairman, Aided by Law Firm, Conspired to Direct BioTE Holdings, LLC into SPAC Transaction to Enrich Themselves

July 16, 2024 – A third lawsuit filed by Brewer, Attorneys & Counselors alleges that company executives from Irving-based Biote Corp. – aided by the Cooley LLP law firm – breached their duties to plaintiffs by channeling the hormone therapy company into a value-destructive special purpose acquisition company (“SPAC”) transaction.

The lawsuit was filed by co-trustees of The Yosaki Trust and The Mioko Trust, Russell J. Miller and Mary Miller, on July 12, 2024, in the Court of Chancery of the State of Delaware.

The suit was brought against Biote CEO Teresa “Terry” Weber, Executive Chairman Marc Beer, Mary Elizabeth Conlon, Haymaker Sponsor III LLC, Steven J. Heyer, and Cooley LLP. Haymaker was the SPAC company that acted as the sponsor of the transaction and Cooley acted as outside counsel. The complaint states that the Cooley firm acted in aiding and abetting defendants’ breaches of their fiduciary duties.

The lawsuit alleges that “The Insider Defendants conspired to close this disastrous transaction to divert approximately $70 million of merger consideration to themselves and gain control of an enterprise they did not build. Plaintiffs respectfully request that the Court order Defendants to disgorge their ill-gotten gains.”

The filing follows a recent settlement with shareholder Marci Donovitz over similar issues.

As explained in the filing, a SPAC – also known as a “blank check company”—is a shell company set up by a sponsor that goes public without an operating business to raise funds, but with a plan to find a target private company with an operating business with which it would merge within a fixed period, usually two years.

“Our clients believe this case reveals a startling fact – company insiders worked with a blank check company and a law firm to enrich themselves and dilute the ownership interest of others,” says William A. Brewer III, partner at Brewer, Attorneys & Counselors, and counsel to plaintiffs.

The lawsuit alleges that plaintiffs’ ownership was diluted and devalued by the transaction, which enriched defendants at the expense of the legacy owners – plaintiffs bring the action to recover damages caused by the “disloyal fiduciaries, and those who aided them.”

As  publicly reported, Biote was a recent defendant in a separate lawsuit filed by Biote founder and Brewer client Dr. Gary Donovitz regarding the SPAC deal. As reported, in February 2024, Biote disclosed it agreed to buy back nearly $77 million of Dr. Donovitz’s stock to settle the matter. In July 2024, it was reported that Biote reached a $60 million settlement with another shareholder Marci Donovitz, also a Brewer client.

Bloomberg Law and The Dallas Morning News Report on $60 Million Shareholder Settlement with Biote

July 8, 2024 – Bloomberg Law and The Dallas Morning News report that Biote reached a $60 million settlement with Brewer, Attorneys & Counselors client and Biote shareholder Marci Donovitz in a lawsuit over its merger with a special purpose acquisition company, also known as a “SPAC” or “blank check company.”

Bloomberg Law reported that Donovitz alleged her shares in the hormone therapy company were diluted by the deal. The article reported that the company will buy back her shares over a three-year period, with $30 million paid upfront. Bloomberg reports that the lawsuit filed in Delaware Chancery Court alleged that Biote company insiders benefited from the transaction with Haymaker Acquisition Corp. III that delivered almost no cash to the company.

“This settlement validates our client’s claim that the transaction was a scheme to enrich a few company ‘insiders’ – and reward them with financial and managerial benefits to which they were not entitled,” William A. Brewer III, a partner at the Brewer firm, said in a statement quoted in the media reports.

The Morning News report noted that as part of the settlement, Biote will be forced to repurchase all 8.3 million of Donovitz’s shares at $7.23 each.

The Morning News article observes that SPACs were once a very popular way for companies to go public but have faced scrutiny from the Securities and Exchange Commission in recent years.

Read the Bloomberg Law report here and The Dallas Morning News report here.