Pryor Cashman has settled a legal malpractice suit alleging $37 million in damages, nearly seven months after an appeals court revived a claim in the litigation.
Lawyers in the case filed a stipulation of discontinuance with prejudice last week, in Deep Woods Holdings LLC v. Pryor Cashman, 652886/2015.
Court papers did not reveal settlement terms.
In the underlying matter, Pryor Cashman and partner Pinchus Raice, represented nonparty David Lichtenstein in a deal in which he was to buy $10 million worth of stock in Park Avenue Bank. According to the malpractice allegations, Pryor Cashman missed a deadline for a call option that existed for 45 days to buy stock in the bank.
Pryor Cashman then recommended to Lichtenstein that he, together with other nonparties, form Deep Woods Holdings, and that Lichtenstein assign the call option to Deep Woods, which would sue to exercise the call option.
The assignment language became a source of a dispute in the malpractice suit, filed by Deep Woods. In the suit, Deep Woods alleged Raice missed the deadline and urged Deep Woods to sue the other party, "without disclosing his negligence."
Manhattan Supreme Court Justice Saliann Scarpulla dismissed part of the malpractice complaint in February 2016, finding that Deep Woods did not have standing to sue the law firm.
But the Appellate Division, First Department, reversed in December, finding that Pryor Cashman couldn't argue the assignment-of-rights language it drafted for Deep Woods "did not assign tort claims," including malpractice claims. (NYLJ Dec. 6, 2016)
Ronald Shechtman, Pryor Cashman's managing partner, declined to comment, as did Douglas Capuder of Capuder Fazio Giacoia, attorney for Deep Woods.
Pryor Cashman was represented by Frederick Warder III, a partner at Patterson Belknap Webb & Tyler.