Opinion ID: 4360915
Heading Depth: 2
Heading Rank: 2

Heading: Florida Matter

Text: The second unrelated complaint against the respondent was received by the ADO in October 2014 from an attorney at a law firm in Florida who filed on behalf of HPC U.S. Fund 1, L.P. and HPC U.S. Fund 2, L.P. and its authorized representative, Mr. Brinke. This matter involves the respondent’s representation of Blackport Investment Group, LLC, which was created and retained by HPC U.S. Fund 1, L.P. and HPC U.S. Fund 2, L.P. The HPC entities are holding companies of German-based investment vehicles that hold real estate interests throughout the United States. Blackport managed these interests for HPC. Wood was Blackport’s asset manager representative. The respondent previously represented Wood individually and has represented companies, including Blackport, of which Wood was an owner, member, or manager. Wood and the respondent had a lengthy personal and professional relationship. HPC initiated proceedings in the United States District Court for the Southern District of Florida concerning Wood’s mismanagement of HPC’s 3 funds, and alleged that Wood had misappropriated approximately $10,000,000. The federal court issued a temporary restraining order followed by a preliminary injunction, entered on September 4, 2013, against a number of defendants, including Wood. The preliminary injunction prohibited Wood or “any and all persons acting under Defendant’s direction or control” from taking any action with respect to any property interests held by HPC. The prohibition included transferring or secreting any property interests or liquid assets they held as a result of the transfer, sale, or conveyance of HPC’s property interests. During this time frame, the respondent began to represent Blackport in the sale of property in Idaho, which was largely owned by HPC. The respondent contacted North Idaho Title, the company that was handling the purchase and sale of the Idaho property, and conducted some preliminary work on behalf of Blackport. Wood was one of the respondent’s contacts for Blackport. However, as the parties moved towards a possible closing date, Wood informed the respondent via e-mail about the injunction issued by the federal court, which prohibited Wood from having any involvement in the conveyance of any property interests of HPC. In fact, Wood explicitly informed the respondent that, because of the injunction, Wood was not authorized to sign on behalf of Blackport for the sale of the property. Thereafter, the closing was dependent on determining who was authorized to sign on behalf of the seller. Despite his knowledge of the injunction, the respondent informed North Idaho Title that Wood could sign on behalf of Blackport, and the transaction closed in November 2013. The respondent testified that he advised North Idaho Title that Wood had authority because Wood had told him that Wood’s lawyer advised Wood to sign on behalf of Blackport, to protect the minority owner’s interest in the property. Following the sale of the property, the proceeds were deposited in the respondent’s escrow account. The respondent did not notify HPC or its counsel that he was holding funds governed by the preliminary injunction. Instead, the respondent disbursed those funds at the direction of Wood, including the payment of the respondent’s attorney’s fees. Approximately two weeks after the disbursement, $51,970 was returned to the respondent’s trust account and disbursed to a different entity under the direction of Wood. Wood authorized the respondent to keep an additional $3,000 in attorney’s fees. In January 2014, HPC, through their attorneys, discovered that the property in Idaho had been conveyed without their knowledge. HPC initiated contempt proceedings in federal court against Wood. The proceedings were ultimately broadened to include a third-party contemnor claim against the respondent, who received notice and appeared before the court on one occasion. The matter was continued, and the respondent did not subsequently appear at any further proceedings. 4 The federal court found that the respondent had violated the preliminary injunction. In a September 2014 order, the magistrate found that Wood and the respondent “were aware of the injunction and had the ability to comply with it, but chose not to do so.” After the federal court adopted the magistrate’s report, HPC filed a motion for judgment and an award of attorney’s fees. The respondent filed an objection. In June 2015, the court ordered that Wood and the respondent were jointly and severally liable to HPC for $301,874.70 in contempt damages, $135,739.50 in attorney’s fees, and $4,672.70 in costs. After receiving these two complaints ― regarding the Haase and Florida matters ― the ADO requested that the chair of the hearing committee appoint a hearing panel. See Sup. Ct. R. 37A(III)(b)(4). Following a hearing, the panel found that the respondent violated numerous rules of the New Hampshire Rules of Professional Conduct in both matters. The PCC agreed with the hearing panel and recommended that the respondent be disbarred.