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Attorney’s Creative Use of Receivership and a Disgruntled Landlord

November 1, 2019 Posted in Case Law Review Share

To escape a commercial lease, a law firm dissolved and agreed to the appointment of a receiver. The law firm’s sole attorney then formed a new law firm and continued to provide legal services to the same client base. The commercial landlord sued the attorney and his new law firm for breach of the lease contending that the attorney and his new firm were liable as successors in interest. The landlord also asserted claims of fraudulent transfer and attempted to pierce the corporate veil. Division I of the Washington State Court of Appeals dismissed the lawsuit concluding that the appointment of the receiver shielded the attorney from such claims. It should be noted that the landlord could have protected itself by requiring the attorney to personally guarantee the lease. Northgate Ventures LLC v. Geoffrey H. Garrett PLLC, 10 Wn. App.2d. 850 (2019).