Global law firm Dentons has taken legal action against its former client, Steel Connect Inc, alleging the failure to pay outstanding legal fees exceeding $1.7 million. The lawsuit was filed in New York County Supreme Court, with Dentons’ U.S. branch seeking to recover the unpaid dues from the publicly traded supply management company.
The roots of this legal dispute trace back to a previous engagement when a board committee within Steel Connect hired Dentons. The committee’s mandate was to negotiate a potential take-private buyout of the company, with Steel Partners Holdings LP, an existing shareholder of Steel Connect, showing interest in the acquisition. Dentons commenced its representation in January, shortly after the merger plan had been terminated.
Amid the complex negotiations, four months later, Dentons played a pivotal role in crafting a deal that would grant Steel Partners an 85.12% equity interest in Steel Connect, in exchange for an infusion of $200 million in working capital. The legal team from Dentons diligently represented the board committee throughout the transaction, while White & Case acted on behalf of the company itself.
In the aftermath of their services, Dentons issued seven separate invoices to Steel Connect, covering the legal work performed during the negotiations and deal structuring. However, despite the timely delivery of the invoices, Steel Connect neglected to settle any of the outstanding bills. The most recent invoice was sent on July 10, yet the payment remained pending, and the company’s strategic planning committee refrained from raising any objections or disputes regarding the charges.
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The lawsuit filed by Dentons seeks to hold Steel Connect accountable for its non-payment and seeks full recovery of the unpaid legal fees, totaling over $1.7 million. The law firm maintains that its services were rendered diligently, and the outstanding dues are a legitimate claim for the value provided during the negotiation and execution of the pivotal deal.
As this legal battle unfolds, spokespersons for Dentons, Steel Connect, and White & Case have been approached for comments, but they have not responded to requests seeking clarification on the matter. Dentons’ U.S. branch will be represented by its General Counsel, Edward Reich, throughout the course of the lawsuit.
This lawsuit between Dentons and Steel Connect serves as a reminder of the importance of honoring contractual agreements and prompt payment for professional services rendered. Legal engagements of this magnitude often involve extensive effort, expertise, and resources from law firms, and non-payment of fees can have severe consequences for both parties involved.
Dentons’ legal pursuit against Steel Connect highlights the criticality of transparent and efficient payment practices in the legal industry. As the case progresses, legal experts and industry observers will be keenly watching the outcome and its potential implications on legal engagements and fee disputes in the corporate realm. For now, the dispute remains unresolved, and all eyes are on the courtroom, awaiting a verdict that will bring clarity to this intriguing legal saga.
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