K-Mart executives can pursue second malpractice claim arising out of K-Mart bankruptcy
Mariana Keros and Paul Springthorpe sued their attorney, Frederick P. Bibik, alleging that he did not adequately represent them in suing their prior attorney. The executives argued that they should have been able to preserve their severance pay in the K-Mart bankruptcy case, but that mistakes by their original attorney resulted in the court not honoring their claim. They hired Bibik to sue the original attorney. The claim he filed was dismissed.
The executives then hired an attorney to sue Bibik and filed an Affidavit prepared by a bankruptcy expert who alleged that if the case against Bibik had been pursued properly, it would have been successful. Apparently because K-Mart had deliberately and grossly undervalued its leasehold properties, rendering an administrative claim more valuable than a general claim. The trial court didn't buy the claim and dismissed the lawsuit. On appeal, the appellate judges unanimously disagreed. After reviewing the expert's affidavit, the court held that the executives had presented a viable claim that must be decided by the jury.