Summary List Placement
A life sciences venture capitalist claims he was shut out of the meteoric rise of his former partner’s hedge fund because his ex-lawyers at Proskauer Rose bungled the deal.
Dr. Robert Adelman, the managing partner of venBio, says he missed out on the success of Avoro Capital, a hedge fund spun out of venBio in 2016. Lawyers at Proskauer made a drafting error in fund documents that forced him to sell his Avoro stake in 2019, Adelman alleges. His state-court lawsuit against the Big Law firm hasn’t previously been reported.
Avoro was up 19.5% for the year through last August and grew 60% in 2019, the year Adelman was pushed out, according to Institutional Investor. One of its top holdings was Immunomedics Inc., which was purchased by Gilead Sciences last year for $21 billion, generating huge profits for Avoro.
Proskauer’s terms gave Behzad Aghazadeh, the hedge fund’s managing partner, the authority to declare a “strategic transaction” that would result in the redemption of Adelman’s 27.5% stake in the fund, according to the March 2020 lawsuit. Adelman says Aghazadeh took advantage of that provision in a 2019 deal involving HealthQuest Capital.
“Proskauer’s legal malpractice obliterated Dr. Adelman’s interest in the very hedge fund that he co-founded,” the lawsuit said. It named Sarah Cherry as the Proskauer partner involved, though she’s not a defendant.
Adelman is seeking “hundreds of millions” of dollars from Proskauer, according to court documents. He’s represented by the Boston trial lawyer Lisa Arrowood and a team from Susman Godfrey.
Proskauer claims that Adelman knew what kind of concession he was making but made it anyway because Aghazadeh was a “star” employee. In a statement, Proskauer called Adelman “an experienced and sophisticated investor” who was directly involved in negotiations with Aghazadeh, and said his lawsuit was “unfortunate.”
“His remorse over a …read more