After having spent $17 million in legal fees, with another $19 million on the table, the DeKalb County School System is now in a legal battle to keep the firm representing it in a $100 million lawsuit against a leading construction management company.
DeKalb is accusing Heery International -- which oversaw hundreds of the system’s construction projects -- of moving money between projects, making changes to time sheets and billing the system for work that had not been done yet.
The practices are documented in a lawsuit filed by the school system against Heery, under the legal guidance of King & Spalding.
On Wednesday, Heery will ask DeKalb County Superior Court Judge Clarence Seeliger to remove King & Spalding as DeKalb’s legal representative. Heery claims the firm had prior knowledge of other criminal cases connected with this case, and has a financial stake in the outcome.
“Heery International is very proud of the work it completed on behalf of DeKalb County School System, and the company remains fully committed to this case,” said David Rubinger, a spokesman for Heery.
But according to the motion, Heery says that King & Spalding had prior knowledge of the alleged criminal enterprise that led to the indictments of former Superintendent Crawford Lewis and former Chief Operating Officer Patricia Reid. The two were indicted last year on charges of racketeering, theft and bribery, related to construction deals. A trial date has not been set for them yet.
“The motion to disqualify is groundless, without substance and nothing more than an improper litigation tactic,” said Ray Persons, a partner with King & Spalding. “We are eager to present our arguments to the court on Wednesday.”
Thomas E. Bowen, chairman of the DeKalb School Board, said the system is comfortable with King & Spalding and sees no conflict.
“It is very unusual to have this kind of motion, and we don’t see the basis for them to be removed,” Bowen said. “They have been with us on this case from the beginning. Prior to this case, they had no involvement in anything. They have been dedicated to just this matter going on five years.”
In those five years, Bowen said King & Spalding has been paid $17 million in legal fees. In 2008, with the fees continuing to escalate, the school system cut a deal with King & Spalding to pay the firm on a contingency.
“It was critical for us,” Bowen said. “We recognized that the case was expensive and we didn’t want to continue spending out of our general fund, so the system approached King & Spalding and asked them to take it on a contingent basis.”
If DeKalb loses the case, King & Spalding gets nothing. If DeKalb wins, the firm would get a percentage of the earnings, based on accrued work. Right now, that figure stands at $19 million.
In Heery’s motion, the contingency fees give King & Spalding a financial stake in the case, and should disqualify the firm.
“The loss of King & Spalding, five years into the case, would be financially devastating to the district,” Bowen said. “The cost to bring another law firm up to speed would be staggering."
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