One of the country’s most successful mass tort firms — that’s won $2.5 billion in verdicts and settlements from companies like Google and Yahoo — is on the verge of collapse, as its founding attorney fends off creditors, including a former partner with whose wife he is accused of carrying on an affair, according to court papers.
Manhattan-based litigation financier Hamilton Capital is asking a judge Wednesday to put Shawn Khorrami’s firm, Khorrami LLP, in receivership.
Hamilton’s suit to recoup $6.3 million in debt and $5.6 million in penalties says Khorrami, whose firm is based in Los Angeles, is “experiencing severe financial difficulties.”
The firm has been “hemorrhaging” cash and staff since 2013 when former law partner Danny Abir learned that Khorrami — his decades-long friend and business partner — was allegedly sleeping with his wife, according to a separate California court filing.
Abir filed two suits against Khorrami seeking nearly $1 million.
Khorrami was also sued by his landlord for $355,000 in back rent, saw three partners depart within a year and had to borrow $5 million from his dad, according to records.
In August, the 46-year-old attorney admitted in an affidavit that he owed Hamilton over $6 million plus interest but the financing firm’s attempt to collect was “thwarted by Mr. Khorrami’s evasiveness and dishonesty,” according to the suit.
Khorrami’s attorney, David Ratner, told The Post that Hamilton actually owes his client $3 million.
“Hamilton may have won the race to the courthouse. It will not, however, succeed on the merits of the case,” Ratner said.
He did not immediately respond to questions about the alleged affair and litigation brought by Khorrami’s former partner Abir.
Khorrami, who founded his firm in 1996, has “grown it from a solo practice to one of the largest plaintiff-only law firms in the nation,” according to Hamilton’s suit.
It’s not uncommon for firms like Khorrami’s, which operate on a contingency basis, to borrow money for high-cost, often class-action cases, involving multiple plaintiffs against one or more corporate defendants.