Lakin malpractice suit in Oklahoma settles

Steve Korris Dec. 4, 2008, 9:42am

TULSA – Piles of money are changing hands again in the gradual reckoning of James Gibson's $80 million theft from litigants flush with cash.

Tom Lakin, who steered clients to Gibson's investment company, settled a malpractice suit of former client Stephen Williams of Chouteau, Okla., on Dec. 2.

The settlement cancels a $3,752,601.80 default judgment that U.S. District Judge Claire Eagan entered last year against Lakin and the firm he founded.

It discharges garnishments of Lloyd's London, Merrill Lynch, Regions Bank and the Chicago law firm of Freed and Weiss.

Lakin's former legal malpractice insurer, Illinois State Bar Association Mutual, had withdrawn a garnishment summons in October.

Williams lost a leg in 1991, when a Union Pacific train rolled over him.

David Herndon, then Lakin's partner, met Williams at the hospital and agreed to represent him.

Williams and Union Pacific settled in 1995.

The Lakins and Gibson structured a 20 year settlement paying almost $7 million.

Union Pacific paid $3 million to Gibson's company, SBU.

SBU stopped paying Williams in 2000, when Gibson absconded to Belize.

Lakin sued SBU in Madison County, on behalf of Williams and other clients.

Lakin and SBU settled in 2004 and Williams received a payment.

Williams considered it insufficient and sued Lakin in federal court at Tulsa.

The Lakins didn't respond.

Williams in Tulsa moved for default judgment and Eagan granted it.

The Lakins responded and moved to set it aside.

Tom Lakin's son, Brad Lakin, swore that he believed his insurance broker and carrier answered the suit.

He swore he first learned about the judgment when he was "informed of an article in a local Southern Illinois newspaper."

The judgment stood while the Lakins sought to vacate it, but now it vanishes.

Gibson languishes in prison while others sort through the damage.

In March, a Madison County jury awarded $3.7 million to Regions Bank on a legal malpractice claim against Thompson Coburn law firm of St. Louis.

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