Former Income Partner Sues Defunct Firm, Alleging Pension Scam By Equity Partners
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Historic Philadelphia firm Schnader Harrison Segal & Lewis had been around for nearly 100 years before announcing in August that it would be ceasing operations. Formerly ranked at No. 358 on the NLJ 500, the firm listed just 88 attorneys on its website when its dissolution plans were announced.
One of those former lawyers, a nonequity partner, recently filed a class-action suit against Schnader Harrison, claiming that the firm used pension contributions to pay equity partners and keep the firm afloat, to the detriment of other employees.
Plaintiff Jo Bennett is suing on behalf of all participants and beneficiaries of the firm’s retirement and savings plan, numbering in the hundreds, alleging violations under the federal Employee Retirement Income Security Act. Reuters has additional details:
According to the complaint, Schnader in 2022 and 2023 mishandled employee contributions to the plan and “commingled the withheld employee contributions with the firm’s general assets.”
Employee contributions were used to fund law firm operations and to make payment distributions to equity partners as the firm faltered, the lawsuit alleged.
“At the same time the equity partners were continuing to pay themselves, the firm was struggling to meet its other financial obligations,” Bennett’s lawsuit said.
Bennett worked as a partner at the firm for seven years. One of her lawyers in this case, Adam Garner, told Reuters that his client’s suit raises “important questions of fiduciary misconduct” against the once-prominent firm.
If true, these accusations will leave quite the stain on Schnader Harrison’s reputation, a firm that industry insiders had referred to as a “Philadelphia institution” prior to its demise.
Shuttered longtime Philadelphia law firm sued over pension plan [Reuters]
Earlier: ‘Historic’ Midsize Firm Decides To Close Its Doors For Good
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter and Threads or connect with her on LinkedIn.
