A group of lawyers known for celebrity divorces surprised the legal industry last spring when they announced they would leave the New York law firm led by Marc E. Kasowitz, a longtime lawyer for President Trump, after two decades at the firm.
Now, the lawyers say their departure resulted from an internal dispute over conflicts of interest.
They point to a ruling this month that disqualified the firm, Kasowitz Benson Torres & Friedman, from representing an opponent of the Georgetown Company in a $35 million real estate dispute because the law firm already represented one of Georgetown’s principals, Joseph B. Rose, in a divorce case.
In March 2016, Mr. Rose asked a state court to disqualify the Kasowitz firm from representing IAC/InterActiveCorp, Barry Diller’s internet conglomerate and Georgetown’s opponent.
Eleanor B. Alter, a matrimonial lawyer to celebrities like Robert De Niro and Madonna, represented Mr. Rose, a former chairman of the New York planning commission, in a yearslong divorce proceeding. She now heads the firm Alter, Wolff & Foley, whose lawyers left the Kasowitz firm.
At the time of the departure, Ms. Alter said it had not been about money but about “internal events” at the firm, but gave no details.
“Questions were asked at the time,” Ms. Alter said in a recent interview, “and now they are answered with the court’s decision. It affirms Mr. Rose’s position.”
The Kasowitz firm did not respond to a request for comment.
Ms. Alter’s practice was one of the few such family practices at a large law firm, where conflicts can occur between the business dealings and the private lives of the wealthy. Typically, a memo is circulated among all the partners of a firm to ensure there are no conflicts in taking on a new case. But, according to the legal papers, that was not done in Mr. Rose’s case, even though he had been a client for some time.
The position of the Kasowitz firm, according to legal documents, was that there was no conflict between representing Mr. Rose’s personal dealings and representing his adversary in the legal dispute over a fee for development rights for a property in Manhattan’s Chelsea neighborhood.
In the ruling this month detailing the disqualification efforts on both sides, Justice O. Peter Sherwood of the New York State Supreme Court sided with Mr. Rose, noting that his Kasowitz lawyers had “been privy to Rose’s personal and financial information, including information about Georgetown and the fees at issue in this litigation.”
The Kasowitz firm had argued that there was no disqualifying conflict because the matrimonial group had “effectively operated behind an ethical wall so no other attorneys are privy to their matters,” according to the ruling.
The judge also rejected the firm’s claims that any conflict was negated because the matrimonial lawyers were leaving the law firm and taking Mr. Rose’s case with them.
In siding with Mr. Rose, the judge found that “it is undisputed that Rose did not waive the conflict” and the money at issue in the conflict with IAC was also involved in the divorce proceedings.
Mr. Kasowitz is best known as a lawyer for Mr. Trump, representing him in such matters as a 2006 lawsuit challenging published assertions that Mr. Trump was not a billionaire as he claimed.
Last fall, Mr. Kasowitz threatened to sue The New York Times on Mr. Trump’s behalf over an article detailing accusations that Mr. Trump had groped and kissed women without their consent. The Times defended its reporting and told Mr. Kasowitz, “We welcome the opportunity to have a court set” Mr. Trump straight. To date, no lawsuit has been filed.
A version of this article appears in print on March 22, 2017, on Page B2 of the New York edition with the headline: Celebrity Divorce Lawyers Left Over Conflicts Dispute.
Source: The New York Times / Author: Elizabeth Olsen / Date: 3/21/2017