Before Fortress Investment Group bought a note Marc Dreier was arranging to sell, it says it wanted an independent legal opinion from an “internationally recognised law firm.”
Dreier proposed Dechert LLP. Dechert issued an opinion saying the deal was legitimate, and Fortress made a $50 million loan it now says was a sham. The private investment firm is now suing the law firm.
Peter Lattman for The Wall Street Journal: Dechert in a legal opinion letter assured Fortress that one transaction—a $50 million loan Fortress would make to property owner Solow Realty & Development Co.—was legitimate, the suit says. The letter said Dechert represented Solow in the deal, the suit alleges.
“In fact, the loan was an utter sham, the proceeds of which Dreier misappropriated for his own use,” says the complaint, which was filed by Kasowitz, Benson, Torres & Friedman LLP.
Dechert never confirmed its relationship with Solow with a telephone call or email to anyone at Solow, the lawsuit alleges. The opinion letter also stated that the loan documents had been “duly executed and delivered” by Solow, when they were actually forged by Dreier, the suit says.
Read Lattman’s full report here.
Fortress has said it lost a total of $125 million bying fake promissory notes from Dreier. Dreier is currently serving a 20 year sentence for stealing client funds; he was also alleged to have sold fake notes to investors.
Dechert told the WSJ that it has not yet seen the complaint, but that the suit is baseless and they will “defend the case vigorously.” The partner who worked on the letter, Bruce Wood, left the firm shortly after Dreier’s arrest and is now at a smaller firm in Stamford.
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