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Client Won't Pay its Fees? Too Bad, Judge Tells Larkin Hoffman


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Talk about adding insult to injury: A federal judge last week denied Larkin Hoffman’s motion to withdraw as counsel for its franchisor client, Maid-Rite Corp., even though the firm says Maid-Rite has not paid its legal fees.

“Defendants have failed to pay a substantial amount in past due attorneys’ fees and costs,” said the motion by Larkin Hoffman Daly & Lindgren, a Minneapolis law firm, and “missed several deadlines to pay such fees and make suitable arrangements to assure payment of future invoices.”

Too bad, U.S. Magistrate Judge Leo Brisbois said. “The court finds it ill-advised to allow defense counsel to withdraw simply because the firm may have made an ill-advised business decision with respect to representing defendants. To allow defense counsel to withdraw at this juncture would stall progress in the present case, in the middle of discovery.”

The judge noted Maid-Rite appeared not to have found substitute counsel, a major factor in his decision. Chuck Modell, head of the franchise and distribution practice at Larkin Hoffman, declined to comment.  

Plaintiffs in Don Sanford v. Maid-Rite Corp. allege numerous claims against defendants Maid-Rite, CEO Bradley Burt and officer Tania Burt, including fraud, negligent misrepresentation, violations of state franchise and consumer protection laws and breach of contract.

Plaintiffs allege they relied on fraudulent franchise disclosure documents and business plans from Maid-Rite, and that MRC knew it “grossly overstated its profitability projections and income potential along the way.”

Michael Garner, with Garner & Ginsburg in Minneapolis and the plaintiffs’ attorney, said “I’ve never seen it before,” that a judge would deny a motion to withdraw if not paid.  

 

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

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