Saying it wanted to avoid costly litigation, Minneapolis law firm Fredrikson & Byron agreed to pay $13.5 million to the bankruptcy estate of Tom Petters yesterday.
The firm reached the settlement with Doug Kelley, the bankruptcy trustee in the case. Fredrikson & Byron represented Petters for 15-years. Kelley is trying to clawback money from businesses, charities and individuals who profited during Petters’ Ponzi scheme.
Kelley said he found no evidence that Fredrikson had any knowledge of Petters’ $3.65 million fraud, but there “were a number of red flags that should have alerted F&B to the possibility that the business allegedly conducted by Petters was fraudulent.”
Fredrikson & Byron denied any wrongdoing in its representation of Petters and said the settlement would be fully covered by insurance.
“The settlement affirms our position that our representation of Mr. Petters and his companies was, in every respect, honest, ethical and consistent with our professional duties and responsibility,” the firm said in a statement.