IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

(Richmond Division)

In re:

LeClairRyan PLLC,1

 Debtor.

______________________________________

Lynn L. Tavenner, as Chapter 7 Trustee,

 Plaintiff,

v.

ULX Partners, LLC, UnitedLex Corporation, 

and ULX Manager LLC,

 Defendants.

Chapter 7

Case No. 19-34574 (KRH)

Adv. Proc. No. 20-03142 (KRH)

MOTION FOR LEAVE TO AMEND FIRST AMENDED COMPLAINT

Plaintiff, Lynn L. Tavenner, solely in her capacity as Chapter 7 Trustee (“Trustee”) of the 

bankruptcy estate (“Estate”) of LeClairRyan PLLC (“LeClairRyan” or “Debtor”) respectfully 

submits this motion (the “Motion” and/or “Motion to Amend”) for an order granting the Trustee 

1

 The principal address of the Debtor as of the petition date was 4405 Cox Road, Glen Allen, Virginia 

23060, and the last four digits of the Debtor’s federal tax identification number are 2451.

____________________________________

Erika L. Morabito (VSB No. 44369)

Brittany J. Nelson (VSB No. 81734)

QUINN EMANUEL URQUHART & SULLIVAN LLP

1300 I Street, N.W., Suite 900

Washington, DC 20005

(202) 538-8334 (telephone)

Email: erikamorabito@quinnemanuel.com

brittanynelson@quinnemanuel.com

Special Counsel to Lynn L. Tavenner, Chapter 7 Trustee

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leave to file a second amended complaint (a copy of which is attached hereto as Exhibit A and is 

simultaneously being requested to be filed under seal).2 In support of this Motion, the Trustee 

respectfully states as follows: 

PRELIMINARY STATEMENT

1. By this Motion the Trustee seeks to add a single count of fraudulent inducement 

against the defendants UnitedLex Corporation (“UnitedLex”) and ULX Manager LLC (“ULX 

Manager”).3 Evidence gathered during fact discovery which ended less than three weeks ago 

supports this additional claim against the defendants. Moreover, because the claim tracks a theory 

that the Trustee has already pleaded in her First Amended Complaint, allowing this amendment 

will cause no prejudice to defendants. The Trustee also seeks leave to make minor edits to several 

paragraphs, and to Exhibits 4 and 5 to the First Amended Complaint, to add a few pre-petition 

transfers and increase the dollar amounts of the ULX Transfers and the ULX Preferential Transfers 

by approximately $555,691 (from $19,357,282 to $19,912,972.66 and from $17,425,405.10 to 

$17,981,095.66, respectively). The Trustee uncovered these additional pre-petition transfers from 

the Debtor to ULXP during the course of discovery.4 

2. The Trustee’s proposed amendment is well within the guidelines of Federal Rule 

of Civil Procedure 15(a)(2) (made applicable to this proceeding by Federal Rule of Bankruptcy 

Procedure 7015). In particular, the Trustee’s new claim does not introduce a new legal theory that 

2

 Concurrently with this Motion, the Trustee is submitting a separate motion to permit her to file this paper in redacted 

form on the public docket, and without the referenced Exhibit A, and, correspondingly, to seal the redacted portions 

of this paper and Exhibit A in its entirety, pending further order of the Court.

4 While these transfers all occurred in August of 2019, the ULX Entities neither generated nor provided to 

LeClairRyan the relevant invoices until after the petition date in September of 2019. Further, in November of 2019, 

United Lex appears to have caused the Debtor’s books and records to be altered through a ULXP employee to (a) 

void the August payments and (b) reconcile to mirror how United Lex posted the payments received from 

LeClairRyan in August of 2019. Accordingly, these transfers initially appeared to be post-petition transfers in 

September of 2019. 

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would require defendants to gather or analyze additional facts. In fact, currently before this Court 

is the defendants’ motion for summary judgment, and defendants have devoted an entire section 

of its memorandum of law to addressing the very issue of fraudulent inducement that the Trustee 

seeks to add to her complaint. Similarly, the Trustee’s new transfers and additional amounts are 

based on theories that have been in the case for months. The Trustee has been diligent in 

conducting her investigation and reviewing the millions of pages of documents produced in this 

case and recent deposition testimony has made clear that that the proposed new claim is wellfounded. And because defendants would not be required to marshal new facts or conduct additional 

discovery, the Trustee believes that amending the complaint as proposed would not require a 

change to the Court’s Scheduling Order. In short, the Trustee’s Second Amended Complaint would 

cause no undue prejudice to defendants and would not otherwise inconvenience the Court. 

3. Accordingly, the Trustee respectfully submits that the Motion should be granted.5

JURISDICTION

4. The United States Bankruptcy Court for the Eastern District of Virginia has 

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Standing Order of 

Reference from the United States District Court for the Eastern District of Virginia, dated 

August 15, 1984.

5. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2).

6. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

5

 Although not required by Bankruptcy Rule 7015, on February 2, 2022, the Trustee’s counsel, as a professional 

courtesy, provided a draft of her proposed amended complaint to counsel for defendants asking if they would consent 

to the Trustee amending her First Amended Complaint. As of the time of this filing, none of the defendants has 

consented to the Trustee amending the initial complaint.

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BACKGROUND

7. The Trustee filed her initial complaint against defendants ULX Partners, LLC 

(“ULXP”) and UnitedLex on October 26, 2020. As alleged, LeClairRyan and UnitedLex entered 

a joint venture, ULXP, pursuant to which the joint venture, under UnitedLex’s control, took over 

the business operations of LeClairRyan and was paid based on the net profits of the law firm. See 

ECF No. 4 (Complaint). Accessing LeClairRyan’s financial and other confidential information, 

UnitedLex and ULXP effectively controlled LeClairRyan, making decisions about the firm’s 

personnel and using their status to, among other things, leapfrog over the firm’s other creditors. 

Among other claims, the complaint asserted fraudulent transfer and preference claims relating to 

the millions of dollars of purported fees and other payments that the ULX Entities siphoned from 

the Estate during this time. See id. The complaint also alleged statutory and common-law claims 

against UnitedLex and ULXP for their conspiracy with certain of the Debtor’s former officers and 

directors to engage in self-dealing acts that prioritized their financial interests to the detriment of 

the Estate. See id.

8. On July 20, 2021, the Court ruled on UnitedLex and ULXP’s motion to dismiss. 

See ECF Nos. 57-58. The Court sustained most of the Trustee’s claims but dismissed the claim 

for aiding and abetting breach of fiduciary duty (on the ground that Virginia law did not recognize 

the claim). See id. 

9. On August 5, 2021, the Trustee filed a motion for leave to amend her complaint 

and modify the scheduling order, adding Mr. Gary LeClair and ULX Manager as defendants and 

several additional claims based on the new defendants. On August 24, 2021, the Court granted the 

Trustee’s motion and so, on August 25, 2021, the Trustee filed her First Amended Complaint 

against UnitedLex, ULXP and ULX Manager (together, the “ULX Entities”) and Gary LeClair. 

See ECF No. 86. Included in the First Amended Complaint were claims of common law conspiracy 

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and statutory conspiracy against the ULX Entities. See id. One alleged unlawful basis for the 

conspiracy counts was the ULX Entities’ fraudulent inducement to enter into the joint venture 

agreement. See id.

10. On November 3, 2021, the Court denied the ULX Entities’ motion to dismiss the 

First Amended Complaint, retaining all of the Trustee’s claims against each defendant. See ECF 

No. 114.

11. On January 18, 2022, the Court approved the joint stipulation for dismissal of 

defendant Mr. Gary LeClair, leaving the ULX Entities as the sole defendants. See ECF No. 130. 

12. On February 4, 2022, following a status conference, the Court set a deadline of 

February 11, 2022 for the Trustee to file any new motion to amend the First Amended Complaint. 

See ECF No. 144.

13. Trial is currently scheduled to begin on April 18, 2022. See ECF No. 85.

14. Since filing the First Amended Complaint, the Trustee and her advisers6have 

continued to investigate the misconduct of the ULX Entities and certain of the Debtor’s former 

officers and directors, reviewing millions of pages of documents and conducting 13 depositions of 

fact witnesses, including testimony by the ULX Entities under Rule 30(b)(6). The documentary 

evidence combined with the recent depositions have yielded significant evidence that the 

UnitedLex and ULX Manager induced LeClairRyan to enter the joint venture agreement based on 

fraudulent representations.

15. In particular, UnitedLex and ULX Manager promised to LeClairRyan that, in 

exchange for entering into the ULXP joint venture, they would help LeClairRyan get substantial 

business from multiple specific Fortune 500 companies, including Ford Motor Company, DXC 

6

 On June 25, 2021, the Court approved the Trustee’s retention of Quinn Emanuel Urquhart & Sullivan, LLP, as 

special counsel, in place of prior special counsel, Foley & Lardner, LLP.

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Technologies and General Electric. Proposed 2d Am. Compl. ¶¶ 469-74. Once the transaction was 

complete and LeClairRyan had committed to transferring its valuable assets to ULXP, however, 

the ULX Entities (and their leader, Dan Reed) immediately and repeatedly undertook actions 

showing that they never intended to follow through on these promises, including pitching these 

same lucrative clients on behalf of a law firm that Reed and Defendant ULX owned, called 

Marshall Denning. Id ¶¶ 185-86, 189, 195, 471-72. LeClairRyan’s partners placed significant 

value on Mr. Reed’s misrepresentations regarding future business, which he knew and had reason 

to know would induce LeClairRyan to enter into the joint venture under false pretenses. But for 

UnitedLex’s false promises and representations, the Debtor would never have entered the ULXP 

transaction with UnitedLex and ULX Manager.

ARGUMENT

I. THE COURT SHOULD GRANT LEAVE TO AMEND

16. Under Federal Rule of Civil Procedure 15(a)(2), courts “should freely give leave 

[to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). “A liberal, pro-amendment ethos 

dominates the intent and judicial construction of Rule 15(a)(2).” Norfolk 302, LLC v. Vassar, 2009 

WL 10689618, at *1 (E.D. Va. Jan. 16, 2009) (omitting citation and quotation marks); see also 

Roncales v. Cty. of Henrico, 2019 WL 8112889, at *1 (E.D. Va. July 11, 2019) (granting motion 

for leave even though defendants had not yet responded). As the United States Supreme Court has 

held, “this mandate [of liberal amendment] is to be heeded.” Foman v. Davis, 371 U.S. 178, 182 

(1962).

17. Consequently, courts should deny leave only in rare cases. Specifically, in the 

Fourth Circuit, “[c]ourts should deny leave to amend in only three circumstances: (1) bad faith on 

the part of the moving party; (2) prejudice to the opposing party; or (3) futility.” Terrell v. Thor 

Motor Coach, Inc., 2018 WL 11241189, at *1 (E.D. Va. Apr. 10, 2018) (citing Johnson v. Oroweat 

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Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)). Indeed, “[t]he Federal rules allow liberal 

amendment of pleadings throughout the progress of a case,” even during summary judgment and 

trial. People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 367 (4th Cir. 2001) 

(affirming district court’s grant of summary judgment to conform to proof for claims not raised 

during pleadings), see also Fed. R. Civ. Pro. 15(b).

18. Here, the Trustee’s proposed amendment falls squarely within the liberal 

interpretation of Rule 15(a)(2). The Trustee is seeking to recover appropriate damages for the 

Estate and has been engaged in detailed fact finding in an extremely complicated matter for many 

months now. Justice would not be well served to deny the Trustee appropriate remedies simply 

because of a procedural matter that would not alter the Court’s schedule. See, e.g., Laber v. 

Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (“This liberal rule [Rule 15(a)(2)] gives effect to the 

federal policy in favor of resolving cases on their merits instead of disposing of them on 

technicalities.”). 

19. The defendants can point to no factor among the three that would argue for denial 

of the Trustee’s motion. First, the Trustee has prosecuted this case in the utmost good faith and is 

making this motion at the earliest possible time given that depositions by key members of 

UnitedLex management and others were conducted within the final two weeks of fact discovery, 

which itself ended on January 21, 2022. Indeed, the Fourth Circuit has recognized that a plaintiff 

is “entitled to a reasonable time to investigate through other sources the information [she has] 

secured from the deposition of defendant’s witnesses.” Island Creek Coal Co. v. Lake Shore, Inc., 

832 F.2d 274, 279 (4th Cir. 1987) (finding that district court abused its discretion in denying 

motion to amend three months after plaintiff uncovered relevant facts). During the past several 

months, the Trustee has prosecuted and settled cases against more than 100 parties—including one 

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of the previous defendants in this matter—collecting further support for her claims. Moreover, the 

Trustee’s motion seeks to add only the narrowest of additional claims with the intention that no 

delay to the Court’s schedule will be necessary. And with respect to the additional transfers, these 

too came to light only in recent months and so appending these changes here is the most efficient 

way for the Trustee to present all relevant evidence to the Court. In this absence of any delay or 

inconvenience to defendants, the Trustee’s good faith cannot colorably be challenged.

20. Second, no undue prejudice will be created by the Trustee’s amended complaint. 

Courts in the Fourth Circuit have recognized that "an amendment . . . [which] merely adds an 

additional theory of recovery to the facts already pled is not a proper basis to deny leave to amend.” 

In re Vulcan Constr. Materials, LLC, 433 F. Supp. 3d 909, 916 (E.D.Va. 2019) (citing Laber, 438 

F.3d at 437 (4th Cir. 2006) (internal quotations omitted)); see also Davis v. Piper Aircraft Corp., 

615 F.2d 606, 613 (4th Cir. 1980). (where a “defendant was from the outset made fully aware of 

the events giving rise to the action, an allowance of the amendment could not in any way prejudice 

the preparation of defendant's case.”). As noted earlier, adding the Trustee’s new claim of 

fraudulent inducement with still nearly three months left before the scheduled trial date will create 

no delay to the Court’s schedule and will require no need for further discovery by any party. 

Indeed, the defendants’ pending summary judgment motion shows that they will suffer no 

prejudice from permitting amendment, as that motion devotes several pages to arguing against 

fraudulent inducement, which is already pled in the existing complaint as a predicate for the 

conspiracy claims. ECF 130 at 50-53. Defendants have already focused discovery and briefing 

efforts on the theory to be added; there can be no colorable claim of prejudice. Further, Defendants 

(a) knew amounts were received in August of 2019, (b) appear to have caused the Debtor’s books 

and records to be altered to mirror how United Lex posted these amounts, and (c) have undertaken 

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no significant targeted discovery to date with respect to the transfers listed in Exhibits 4 and 5, so 

any suggestion of prejudice to Defendants would ring hollow.

21. Finally, the Trustee’s proposed additional claim can in no way be characterized as 

futile. Parker v. Berryhill, 2018 WL 5255233, at *1 (E.D. Va. Oct. 22, 2018) (M.J. Krask); see 

also Wilkins v. Wells Fargo Bank, N.A., 320 F.R.D. 125, 127 (E.D. Va. 2017) (“[A] court should 

deny a motion to amend a complaint as futile if it is apparent that the proposed amendments could 

not withstand a motion to dismiss.”) (omitting citation and quotation marks). As noted above, the 

Trustee’s additional claim is based primarily on facts and allegations which the Court has already 

upheld in the face of the defendants’ motion to dismiss. See ECF 113 at 26-27. Similarly, the 

additional transfers do not require any new claims, but simply augment the current pleadings, and 

therefore present no risk of futility.

CONCLUSION

22. For the foregoing reasons and based on the extensive additional investigation 

uncovering the new and viable cause of action related to the scheme the Trustee described in her 

First Amended Complaint, the Trustee respectfully requests that the Motion be granted.

[SPACE INTENTIONALLY LEFT BLANK]

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Dated: February 11, 2022 Respectfully submitted,

/s/ Erika L. Morabito

Erika L. Morabito (VSB No. 44369)

Brittany J. Nelson (VSB No. 81734)

QUINN EMANUEL URQUHART 

 & SULLIVAN LLP

1300 I Street, N.W., Suite 900

Washington, DC 20005

Telephone: (202) 538-8334 

Email: erikamorabito@quinnemanuel.com

brittanynelson@quinnemanuel.com

Special Counsel to Lynn L. Tavenner, the Chapter 7 

Trustee of the Estate of LeClairRyan PLLC

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99998-76910/13191985.1

CERTIFICATE OF SERVICE

Pursuant to the Local Rules of this Court, I certify that on this 11th day of February 2022, I 

served the Defendants with a copy of the Motion and electronically filed the foregoing with the Clerk 

of the Court using the CM/ECF system which will send notification of such filing to all ECF registrants 

in this case.

/s/ Erika L. Morabito

Erika L. Morabito (VSB No. 44369)

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