A biotech VC accuses his Proskauer lawyers of bungling a hedge fund deal, costing him ‘hundreds of millions’

Signage is seen on the exterior of the building where law firm Proskauer Rose LLP is located in Manhattan, New York City, U.S., August 17, 2020.

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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.

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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

Source:: Businessinsider

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