Luke Zouvas has a reputation for screwing over his clients. In one of many examples, PrimeGen Energy (PGNE) announced that it had retained a New York law firm to commence litigation against Zouvas and his then partner, Marc Applbaun, for dissemination of untruthful, false and misleading information to shareholders. If there was any information disseminated, truthful or not, publicly against acting their clients best interests was probably illegal and certainly unethical.
On May 24, 2013, Zouvas was sued by an insurance company who had been paid to indemnify his legal practice. Shortly after the acquisition of the policy, the insurance company agreed to provide a defense in a malpractice suit against him brought by a former client. After forking out about $250K in legal costs, the insurance company came to the realization that the actions for which Zouvas claimed coverage had at least partially occurred prior to the coverage period, thereby relieving them of responsibility to cover him. They sued Zouvas for recovery of the expended costs
In the underlying case, which was attached as Exhibit A to the insurance company's complaint, the former client had sued Zouvas for failing to act on the adverse party's discovery demands, and for failing to disclose a settlement proposal made by the adverse party. The former client alleged that Zouvas' negligence had cost him no less than $750K.
Now instead of only footing the bill for his defense in the litigation brought by the former client, Zouvas was faced with an action to recover a bunch of money from him by the insurance company. Suspiciously, on June 14, 2013, just two days before Zouvas filed for bankruptcy, an undisclosed settlement was entered in the case brought by the former client. One might suspect that the former client was held hostage under the threat of the pending bankruptcy, forcing him to capitulate to a discounted settlements.
The bankruptcy enabled Zouvas to get the litigation brought by the insurance company stayed. Zouvas, who lives a fancy shmancy lifestyle, driving hundred thousand dollar cars and living in multi-million dollar homes, while wearing designer suits, listed $63K in bank and credit card debt as the only other unsecured creditors. As the Zouvas brothers combine for thriving practices in law and accountancy, not to mention their deep connections to companies involved in pump and dump campaigns, we'll let you draw you own conclusions as to Luke's purpose in filing for bankruptcy.
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