More litigation follows Freed & Weiss dispute

Sarah Zavala Mar. 8, 2012, 2:50am

CHICAGO - An outside business litigation firm recently joined the mix of parties taking legal action against named partners at Freed & Weiss LLC.

The firm, Williams Montgomery & John LTD., (WMJ), filed a complaint March 1 against Eric D. Freed, co-manager of Freed & Weiss LLC, and his father Michael J. Freed, for allegedly failing to make payments owed to the firm for the legal services provided.

WMJ was representing Freed in a lawsuit against his former partner Paul M. Weiss, who is also suing Freed for breach of contract.

But according to WMJ's lawsuit, the firm dropped Freed as a client after he allegedly did not make payments on-time.

The suit claims that in September 2011, Freed agreed to pay an hourly rate and reimburse WMJ for all costs advanced on behalf of Freed, a price that has grown to nearly $130,000, according to the complaint.

WMJ claims it has performed legal services for Freed in two cases: one against Paul M. Weiss and his wife Jamie Saltzman Weiss, and the other against Larsen Marine Service Inc.

"Despite repeated demands made upon Freed, he has failed and refused to pay WMJ the amounts remaining due and has breached the agreement," the complaint states.

WMJ is asking the court to award the firm $129,893.91, plus $17.80 per day in interest.

The firm also is suing Eric Freed's father, Michael J. Freed, for breach of contract.

WMJ claims that in December 2011, Michael J. Freed agreed to pay WMJ for legal services in connection with the case of Eric D. Freed v. Paul M. Weiss and Jamie Saltzman Weiss, an amount that has totaled nearly $35,000.

According to the complaint, when WMJ asked for payments, Michael J. Freed even sent an email stating, "I will send my check promptly."

However, Barry Montgomery, with WMJ, said no payment was ever received.

WMJ is seeking $34,902.95, plus $4.78 per day in interest.

In December, Weiss also filed a suit with the American Arbitration Association against Freed for breach of contract.

Freed and Weiss began disputing their rights and obligations to Freed & Weiss LLC sometime in March, the complaint filed by Weiss states.

Later that month, Freed allegedly withdrew nearly all Freed & Weiss LLC funds by writing a check for himself for $1.5 million, the complaint said.

"Freed's check depleted nearly all the funds necessary for F&W (Freed & Weiss LLC) to run its business," the complaint said, adding that the account was overdrawn by nearly $1.4 million.

In turn, to keep the firm operating, Weiss deposited funds in an account in the name of Freed & Weiss LLC at a different bank. Freed then tried to withdraw all the funds from the firm's account, which resulted in the bank putting a hold on the account.

According to the complaint, Freed had voluntarily terminated his membership of Freed & Weiss LLC because he no longer provided the firm with legal services, removed all documents and personal belongings from the offices, solicited several attorneys from the firm to leave and start a new firm with him and communicated with the office landlord that Weiss was the only person responsible for Freed & Weiss LLC business.

The complaint also states that Freed voluntarily terminated his membership, and that an operating agreement between Freed and Weiss says Freed should be repaid for half of the advances that he previously made for the operations of the firm.

However, Weiss is claiming that no payment was due to Freed as a result of his termination because he was in possession of at least $1.2 million of the firm's funds, which exceeded the amount due to Freed.

Weiss is asking that no payment should be due to Freed for his termination and for Freed to pay the arbitrator's fees and administrative costs of the arbitration.

Last week, the Record reported on two other related lawsuits aimed at Weiss and Chase Bank.

In the suit against Weiss, former partner at Freed & Weiss, George K. Lang, sued over allegations of breach of fiduciary duties, breach of contract and unjust enrichment.

Lang claims he was fired by Weiss after refusing to assist Weiss in a scheme to take over Freed & Weiss LLC and turn the firm into his own.

Lang also claims Weiss was diverting the firm's assets and using them for his own ends, including personal expenses and defense costs related to sexual harassment charges filed against him by the Illinois Attorney Registration and Disciplinary Commission.

In the other lawsuit, Freed claims Chase Bank allegedly assisted Weiss in his attempt to take the firm's funds out of his reach.

The case of Freed &Weiss LLC and Paul Weiss v. Eric Freed was filed with the American Arbitration Association.

The case of Williams Montgomery & John LTD,. V. Eric D. Freed and Michael J. Freed, was filed in the Circuit Court of Cook County, Illinois.

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