Napoli Shkolnik mesh cases originated at controversial mass torts marketing firm – ex firm employee

September 14, 2016

The prominent personal injury firm Napoli Shkolnik has just surfaced in the Chapter 11 bankruptcy of Excelium Management, a corporate sister of the controversial mass torts marketing company Law Firm Headquarters.

Law Firm HQ, as I’ve reported, is trying to stave off subpoenas by American Medical Systems, a defendant in the sprawling mesh litigation. AMS contends that Law Firm HQ improperly solicited women to file mesh claims and participated in a scheme to lure mesh clients into unnecessary surgery. The marketing company has said it helped women and that AMS is merely attempting to divert attention from its own wrongdoing in mesh cases, in which tens of thousands of women allege they were injured by medical devices implanted to treat urinary incontinence and pelvic organ prolapse. Law Firm HQ’s counsel in the subpoena fight has also said Excelium’s bankruptcy is not related to that dispute.

In a newly docketed letter to U.S. Bankruptcy Judge John Olson of Miami, who is overseeing the Excelium Chapter 11, former Law Firm HQ employee Stephanie Barraco alleges that Excelium may be engaged in potential bankruptcy fraud with funds the company expects to reap indirectly from Napoli Shkolnik via an intermediary law firm.

According to Barraco, who said she worked for the company and a predecessor for three years before resigning in August, Napoli Shkolnik is co-counsel with a firm called Bramzon & Associates Specialty Litigation Attorneys on hundreds of personal injury cases. I’ve previously reported that in 2015, Lonny Bramzon took over as the sole attorney of several Washington, D.C., law firms to which Law Firm HQ referred mesh cases it originated.

Barraco’s letter asserts that funds from the Napoli firm were previously transferred to Law Firm HQ’s corporate sister, Excelium, which filed for Chapter 11 bankruptcy on Aug. 24. But according to Barraco, on Aug. 25, Law Firm HQ exec Mitch Hammer informed employees in a meeting that “upwards of two million dollars” in fees coming from Napoli through Bramzon would be redirected to a new venture formed by Hammer and another Excelium principal. That venture, Key Legal Services, was registered in Washington, D.C., on Aug. 1.

Barraco, who said in her letter that she is owed more than $3,000 in back pay, also said she does not have documents to back her account of the meeting but told the court the session was recorded by Law Firm HQ’s security cameras. In a phone interview Wednesday, Barraco told me she decided to write to the bankruptcy judge because “I don’t like that they’re plotting to reroute the funds,” she said. “I felt like, ‘I’m telling on you because you are trying to screw me over.'”

Napoli Shkolnik founder Paul Napoli emphatically denied any relationship between his firm and Excelium or Law Firm HQ. He said Napoli Shkolnik began receiving referrals from Lonny Bramzon six or seven months ago. “I have no idea where his business comes from,” Napoli said. “My understanding is that he gets cases from Internet advertising.”

Napoli said emphatically that his firm does not owe any money to Excelium, let alone the millions of dollars Barraco mentioned in her letter. He also said that Napoli Shkolnik is in the early stages of litigating cases referred by Lonny Bramzon and that “in the scheme of things,” those cases are a “not significant” portion of his firm’s docket.

Excelium’s bankruptcy counsel Paul Decailly said in an email statement that Barraco alleges “some outlandish, though legally incorrect conclusions.” The lawyer said none of Barraco’s allegations “indicate any wrongdoing or fraud, or violate any rule or law” and that neither Excelium nor the other companies mentioned in Barraco’s letter has engaged in wrongdoing.

I left messages at two different telephone numbers for Bramzon but did not immediately hear back.

The bankruptcy judge in the Excelium case has scheduled an Oct. 4 hearing on Barraco’s letter.

(Reporting by Alison Frankel)

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