The Saga Continues

Fortunately for the law firm, the Winnebago County Illinois Circuit Judge took their motion to dismiss seriously. Unfortunately for the firm the Judge also took his job seriously. He stated that after looking at all the documents, he could find no basis for the claim that the bank owned the lawsuit and denied the motion to dismiss.
The law firm has now filed an answer in which it has, in addition to strange and contradictory denials of various allegations, raised a number of defenses as strange as its previous motion to dismiss. Let us take these defenses one at a time. Let us first note the areas of practice for the law firm (from their page on lawyers.com),
"Oliver, Close, Worden, Winkler & Greenwald practices in the following areas of law: Business Transactions, Corporate and Commercial Real Estate, Banking, Labor and Employment, Probate and Estate Planning, Civil Trial and Appellate Practice in all State, Federal, and Bankruptcy Courts, and General Practice."
Clearly, this is a firm with an advertised expertise in business law. Now on to the defenses.
The first affirmative defense is that the corporation was dissolved in 2004. This defense ignores the Illinois Statutes concerning the dissolution of corporations. Illinois Statute number 805 ILCS 5/12.30 provides that dissolved corporations can wrap up its affairs and sue and be sued. The defense, promulgated on behalf of the law firm, seems to be unaware of this Statute. And, oh by the way, isn’t the law firm which represents the corporation supposed to tell them that it has to be reinstated? The law firm which is supposed to supply that information is Oliver, Close, Worden, Winkler & Greenwald.
The second affirmative defense asserts that the since the Bank had a lien, FTI could not pursue the claim until the banks lien was resolved. This is simply nonsense. The lien gave the Bank rights to monies recovered by the corporation, but the right to pursue the claim against the insurance company belonged to FTI. Suggesting otherwise simply demonstrates a remarkable lack of comprehension of debtor-creditor relationships, a key part of business law.
The third affirmative defense is merely a restatement of the second, this time pointing out that there was a receiver appointed, an irrelevant fact.
The fourth defense is that once the corporation was dissolved, the asset became the asset of Julie and James Schanstra. Aside from the conflict with the previous two defenses, the real problem is that again it ignores the Statute which specifically provides that dissolution does not transfer title to any corporate asset.
The fifth affirmative defense is that once the bankruptcy was filed, only the trustee could pursue the claim against the insurance company. The problem is that the Schanstras, not the corporation, filed the bankruptcy so this defense is one more piece of nonsense. It is odd that a law firm, priding itself on its business law acumen, doesn’t know the difference between an individual and corporate bankruptcy.
So let us review. The law firm represents the Schanstras and FTI for many years. The firm takes hundreds of thousands of dollars in fees from these clients. The law firm unceremoniously dumps FTI and Schanstra when a bigger fish comes along, without giving any warning to them. The law firm nevertheless continues to handle a case that puts is critical to the continued operation of the corporation. The law firm fails to promptly resolve the case, putting the law firm in severe financial straits. The law firm fails to pursue the lawsuit, causing it to be dismissed. The law firm fails to tell anybody that the suit is in jeopardy for failure to reinstate the case. The Schanstras pay over $200,000 to the bank for the right to pursue the lawsuit. The lawsuit is dismissed and now the law firm blames the Schanstras. I’m going to go out on a limb here and say that this is real loyalty to a client. I guess their loyalty only goes as deep as the client’s pocketbook.