Richmond-based law firm McGuireWoods LLP remains the lone defendant in a securities fraud lawsuit in Kansas after its motion to dismiss was rejected by a federal judge last month.
The action was filed by the trustee in the bankruptcy case of Ethanex Energy Inc. The suit claims McGuireWoods partner Louis Zehil unlawfully profited on sales of Ethanex stock while working as counsel for the company.
Zehil pleaded guilty to fraud charges.
McGuireWoods argued the trustee’s allegations of business expectancy damages were implausible under the Twombly/Iqbal standard, but the court saw things differently: “Defendant attempts to stretch the Twombly/Iqbal standard beyond its limits,” wrote U.S. District Judge Carlos Murguia.
By Peter Vieth