Florida-based MV Realty is suing a law firm it hired to handle its corporate matters, alleging the firm’s work exposed the brokerage to a slew of consumer protection litigation and investigations.
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The brokerage alleges that Holland & Knight’s services and legal advice “destroyed” its business, which was valued at $350M as of December 2022, according to a malpractice complaint filed Tuesday in Miami state court. Law.com first reported the news.
H&K and MV Realty didn’t immediately respond to Bisnow’s requests for comment.
MV's legal troubles stem from its homeowner benefit agreement, its business practice of providing homeowners fast cash without repayment requirements in exchange for using MV as their exclusive broker. State attorneys general have alleged that MV concealed the terms of its contract, including that each HBA lasts 40 years.
Sixteen states have filed suits concerning the HBA program, and 30 opened investigations into it, MV Realty's complaint says. Since March, it has reached settlements with states including California, Massachusetts, Pennsylvania and Nevada. Maryland Attorney General Anthony Brown filed charges against the brokerage at the end of May.
MV Realty’s lawsuit blames H&K for these proceedings, claiming the law firm “failed to provide the critical expertise needed to protect the company” from the risk of consumer protection laws.
“H&K’s malpractice eviscerated the business, eliminated the value of its contracts, exposed the company and its officers to massive liability, damaged their personal reputations and earning capacity, and forced Plaintiffs to pay H&K for defective and conflicted legal work,” the brokerage said in the complaint.
MV Realty listed several of what it called “catastrophic” consequences for the business, including investing $156M based on what it says was guidance from H&K, selling equity at a $320M valuation and incurring $20M in defense costs.
It is seeking damages from the defendants — H&K and three of its attorneys based out of Miami — in an amount between $300M and $1.2B “and for such other and further relief, in law or in equity, to which Plaintiffs may be justly entitled.”
The brokerage filed for Chapter 11 bankruptcy protection in 2023. The U.S. Bankruptcy Court for the Southern District of Florida dismissed the case in May 2024.
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