A prominent Atlanta real estate law firm that has been mired in litigation over millions of dollars in missing money has filed for bankruptcy protection.
Morris Schneider Wittstadt, formerly known as Morris Hardwick Schneider, on Sunday sought Chapter 11 protection from its creditors in U.S. Bankruptcy Court in Richmond, Va.
The filing follows a raft of legal action and an extraordinary lawsuit last year that included allegations that a founding partner embezzled money.
The firm has been embroiled in controversy since August 2014 when founding partner Nathan “Nat” Hardwick IV was accused by the firm in a lawsuit of embezzling $30 million from escrow and other accounts controlled by the firm and related title company LandCastle Title.
Hardwick’s attorney, Ed Garland, denied the allegations and said Hardwick is not responsible for any fraud. False charges against Hardwick, Garland said, led to clients leaving the firm and resulted in the litigation that’s crippled the company.
A message left for Mark Wittstadt, a partner in the law firm, was not immediately returned.
As Morris Hardwick Schneider, the firm grew to offices in 13 states with 150 lawyers and 700 staffers. The firm and LandCastle handled tens of thousands of transactions annually from Florida to Delaware.
At the time of the lawsuit against Hardwick, Fidelity National Title Group, a major title insurance firm, announced it acquired a 70 percent stake in Landcastle to keep it afloat.
The MSW firm now is a shadow of its former self, according to court filings, with only five lawyers and 31 staffers as of Sunday’s petition.
During a conference call Tuesday and in court documents, MSW attorneys said the firm has seen business fall off since the Hardwick lawsuit started. That has been followed by lawsuits around the country and negative publicity. One of the lawsuits was brought by professional golfer Dustin Johnson. Johnson is seeking repayment of $3 million allegedly loaned to the firm.
Johnson and another man loaned millions to the firm with a high interest rate on the advice of Hardwick, according to allegations contained in lawsuits, with the firm guaranteeing repayment of the loans. Mark and Gerard Wittstadt, brothers and partners in the firm, have denied the firm guaranteed the loans.
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