Judge Removes Greenberg After Finding Conflict

, New York Law Journal

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Justice Melvin L. Schweitzer

Editor's Note: This brief was originally published in The New York Law Journal on Oct. 16.

Citing "considerable evidence that a conflict of interest" exists, a Manhattan Supreme Court judge has disqualified Greenberg Traurig from a case in which it represented a corporation, its majority shareholder and a director.

The issue arose after Jeffrey Perlman, president of energy consulting firm Bright Power, approached software developer Jean Barmash with the idea of creating software allowing building owners to monitor and audit energy usage. Barmash began developing the software in 2009, and Perlman and Barmash started EnergyScoreCards Inc. (ESC).

Barmash and Perlman were ESC's two directors when it was incorporated, while its shareholders are Bright Power and Barmash. Barmash resigned as ESC's chief technology officer in 2011 and Perlman removed him from ESC's board of directors the next year. Barmash, in his lawsuit against Perlman, Bright Power and ESC, alleges ESC has been looted by its controlling shareholder, Bright Power, and Perlman, and the parties have misappropriated ESC's intellectual property, according to Barmash v. Perlman, 650417/2013.

Greenberg appeared as counsel for Perlman, Bright Power and ESC. Barmash moved to disqualify Greenberg from representing any of the defendants, which Justice Melvin Schweitzer (See Profile) granted. Citing Rule 1.7 of Rules of Professional Conduct, Schweitzer said, "Greenberg Traurig cannot represent the majority shareholder, BP, a director in the corporation, Perlman, and the corporation itself, ESC, as it owes separate duties of loyalty and confidentiality to each."

Roger Kaplan, the Greenberg shareholder who has represented the defendants, declined to comment. Stuart Kagen, of the Kagen Firm, who represents Barmash, said he was pleased with the ruling.

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