Largest business fraud in the history of Western Pennsylvania
LeNature settles with accounting firm
Oct. 8, 2014 The trustee representing creditors of bankrupt LeNature’s Inc. filed notice in federal court in Pittsburgh Tuesday that an $895,000 settlement has been reached with an accounting firm hired in 2003 to investigate allegations of misconduct by executives of the former Latrobe beverage company.
According to court filings, attorneys for bankruptcy trustee Marc S. Kirschner of New York said the settlement with Pascarella & Wiker of Pittsburgh is fair because creditors would have spent an estimated $3 million in legal and expert testimony fees trying to recoup more money from the accounting firm for creditors.
“The Trustee believes … that the settlement for $895,000 is in the best interests of the estate and its creditors, given the continued risk, delay and expense involved in litigating claims against (Pascarella & Wiker), the limited insurance funds available and substantial risks of collecting on any substantial judgment,” James H. Joseph, a Sewickley attorney who represents Kirschner, wrote in a bankruptcy court filing.
Neither Joseph nor officials with Pascarella & Wiker returned telephone messages left seeking comment on the settlement.
Under the settlement, approved Sept. 23 by U.S. Bankruptcy Judge Thomas P. Agresti, Pascarella & Wiker admits no wrongdoing.
The settlement with the accounting firm was reached nine months after Kirschner filed paperwork for court approval of a $23.75 million settlement in a legal malpractice lawsuit he had filed in 2009 against Pittsburgh law firm K&L Gates and attorney Sanford Ferguson.
Kirschner, the court trustee charged with recovering money that CEO Gregory Podlucky looted from the company, maintained in a 2009 federal lawsuit on behalf of creditors that K&L Gates, Ferguson and Pascarella & Wiker were negligent for failing to discover Podlucky was siphoning money from the company for his own benefit.
According to the malpractice lawsuit, Ferguson had contracted Pascarelli & Wiker in 2003 to help with the law firm’s probe of Podlucky at the request of company directors.
The law firm’s probe subsequently found no wrongdoing by Podlucky.
By November 2006, LeNature’s was in bankruptcy and federal agents began a criminal investigation. That probe led to charges that Podlucky stole more than $800 million from banks and other financial institutions.
Podlucky, his wife, son and brother, along with three business associates, are serving federal prison terms for their roles in the fraud.
Originally posted by Paul Peirce for Trib Total Media.
Ball and Bonholtzer legal malpractice trial attorneys.