“Albany, New York-based Whiteman Osterman & Hanna LLP is facing a lawsuit in New York federal court alleging it failed to properly structure the sale of a gas company and caused its owner to incur an avoidable tax liability.
In a complaint filed Wednesday, J. David Mahoney said that despite the law firm and its lawyer claiming to be experts in conducting business deals, they structured his transaction as an asset sale that left the client with an unnecessarily larger tax bill. The suit, which named Whiteman Osterman and its attorney Vincent Valenza as defendants, said the additional liability could have been avoided had the sale been treated as a stock transaction instead.
“Defendants held themselves out to be experts in and have sophisticated knowledge regarding structuring business mergers and acquisitions and the corresponding tax law, and agreed to properly structure the transaction and reduce and/or minimize the tax impact of the transaction to plaintiffs,” the complaint read.
Mahoney said that in 2021, he hired Whiteman Osterman to help navigate a deal with a prospective buyer for his company, JDM Enterprises, which went by Noble Gas Solutions Inc. At the time of the proposed deal, there were two possible buyers, with the second one offering a larger price with the condition that it had to be structured in a reorganization known as an F reorganization.
Read more at: https://www.law360.com/corporate/articles/1852530/ny-law-firm-botched-gas-co-sale-ex-client-says?copied=1″
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Cruz, Adrian. Law360 28 June 2024.