Portland Press Herald/Maine Sunday Telegram, April 4, 2009
http://pressherald.mainetoday.com/st...48845&ac=PHnws
Fleetwood group sues lawyer, firm over legal advice
They say they were given flawed advice in the suit they lost against the BBC.
By TREVOR MAXWELL, Staff Writer
PORTLAND — Legendary rock drummer Mick Fleetwood, Cape Elizabeth accountant Joseph McNulty and three of their business partners have sued a Portland lawyer and his firm in a dispute over legal advice given to the group.
In the suit filed last week in U.S. District Court, the partners allege their former attorney, Paul McDonald of the firm Bernstein Shur, failed to give them proper advice during their drawn-out battle with the British Broadcasting Corp.
During that litigation, Fleetwood and McNulty had claimed they were entitled to distribution rights for hundreds of rare music recordings in the BBC archives – including unreleased material by The Beatles, Bruce Springsteen and Elton John. But they lost the case in U.S. Bankruptcy Court last year.
The new lawsuit claims McDonald never warned the group that they could be personally liable for $4.5 million in legal fees sought by the BBC under British law. In order to get the BBC to back off, Fleetwood and his partners agreed not to appeal the bankruptcy court decision. They now seek unspecified damages from McDonald and Bernstein Shur for negligence and other claims.
The general counsel for Bernstein Shur, however, said there was no negligence or misrepresentation by McDonald.
Peter J. Rubin said Fleetwood, McNulty, Arman Mouhibian, Robert Lieb and Carl Stubner are trying to avoid paying a $910,000 bill they owe Bernstein Shur.
"These are five individuals who lost their case, they owe us a lot of money, and they don't want to pay," Rubin said. "I believe that the documents and other evidence will clearly prove that their claim has no merit."
Back in 2001, Fleetwood and McNulty struck a deal with a division of the BBC. The idea was for Fleetwood, the drummer for the rock group Fleetwood Mac, to get permission from top musicians and bands to compile and release their material from the archives. McNulty, a business manager and accountant, would handle the fine print. The deal was for their company, Bee Load Ltd., to split profits with the BBC.
But the agreement unraveled over the next few years, with each side blaming the other.
Bee Load sued the BBC in 2003 for breach of contract, and McDonald was the lead lawyer on the case. At the time, he estimated the archived material was worth more than $100 million, and Fleetwood and McNulty were entitled to tens of millions in losses.
According to the new lawsuit filed against McDonald, Fleetwood and his partners had racked up $250,000 in legal fees by 2005.
They then signed a new agreement with Bernstein Shur, in which the firm agreed to cut its hourly rates in exchange for a percentage of any damages, if Bee Load were to win. Fleetwood and the others signed on as "guarantors," meaning they promised to pay the fees under the contract.
Michael Waxman, the lawyer now representing Fleetwood and his partners, said all five of his clients specifically asked McDonald one key question: If they signed as guarantors and then lost, could they be held liable for the BBC legal fees?
McDonald told them there was no chance of that happening, Waxman said.
"They all would have said, forget it, shut down litigation, if there was even the remote chance they could be held liable for those fees," Waxman said. Bernstein Shur, he said, misrepresented the guarantees "in order to get my clients to sign."
Staff Writer Trevor Maxwell can be contacted at 791-6451 or at:
tmaxwell@pressherald.com