The law firm Holland & Knight said it will pay $25 million to settle claims related to its representing hedge funds controlled by Art Nadel, the Sarasota Ponzi schemer known as the "mini-Madoff."
Nadel, found guilty of defrauding investors of $168 million, died in prison in April at age 80. The settlement is expected to end a lawsuit filed two years ago seeking close to $170 million against Holland & Knight, alleging malpractice and complicity in Nadel's activities. The suit was brought by court appointed receiver Burt Wiand and his legal team at Tampa law firm Wiand Guerra King. Representing Wiand in the case was Guy M. Burns of Johnson Pope Bokor Ruppel and Burns, LLP.
Holland & Knight general counsel Michael Chapman issued a statement Tuesday saying the settlement represents a compromise by the firm that "reflects its consideration of various factors, including the substantial costs and investment of firm resources required to continue the litigation involving the funds."
The settlement, once approved by the U.S. District Court for the Middle District of Florida, will pay $25 million to the receivership estate in exchange for a broad release of claims. Just over $18 million of that sum is to be distributed to investors in the Nadel hedge funds.