Reuters
Dec 12 (Reuters) – U.S. law firm Baker & Hostetler must face part of a lawsuit in bankruptcy court in Texas accusing it of helping to facilitate a former client’s “blatant” insurance fraud scheme, a federal judge ruled.
U.S. Bankruptcy Judge Marvin Isgur in Houston on Wednesday rejected, opens new tab for now Baker Hostetler’s bid to dismiss civil racketeering claims linked to the firm’s work for bankrupt former client Alliance Health.
The liquidation trustee for Alliance sued Baker Hostetler in 2022, claiming the Cleveland-founded firm knew about and “provided cover” to Alliance as it operated and managed a sophisticated insurance fraud scheme that caused more than $100 million in damages.
The alleged scheme involved Alliance’s purchase of diabetes test strips for which it received oversized reimbursements, according to court records.
Isgur’s order on Wednesday dismissed some claims against Baker Hostetler, including fraud and legal malpractice.
Baker Hostetler, which employs more than 1,000 lawyers in the United States, did not immediately respond to a request for comment, and neither did its attorneys at Vinson & Elkins.
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