CLEVELAND (CN) – Baker & Hostetler LLP is accused of legal malpractice, breach of contract and breach of fiduciary duty: persuading the Ohio Carpenters’ Pension Fund to invest millions of dollars in an undercapitalized commercial read estate project, the LA Centre in Westlake.
Co-defendant U.S. Bank Home Mortgage fka The Leader Mortgage Co. is accused of extending additional loans on the pension fund’s behalf as the project collapsed. The pension fund claims Baker & Hostetler failed to complete due diligence, or did a shoddy job of it, as the projected construction price of the LA Centre mushroomed from $11.5 million to $26 million. Leader Mortgage is accused of loaning $8.9 million on the pension fund’s behalf, though it had authorized only $2.8 million. The pension fund claims it won a $31.3 million judgment against the borrowers in previous litigation. In succeeding litigation against Leader, the pension fund says, it learned of its claims against Baker & Hostetler, and fired it. The pension fund seeks millions in Cuyahoga County Court. It is represented by Rotatori Bender Gragel Stoper & Alexander. See complaint.