A federal judge in Washington has stayed the malpractice lawsuit filed against Buchanan Ingersoll & Rooney by the two name partners of Arlington, Va.-based lobbying firm Alcalde & Fay.
Lawyers for Buchanan Ingersoll and for Hector Alcalde and Kevin Fay filed a joint motion to stay the suit, saying it was in the interest of "judicial economy" to await the findings of an Internal Revenue Service administrative proceeding that could render the malpractice suit moot.
The suit stems out of work done by former Buchanan partner Louis Diamond, who was hired by lobbyists Alcalde and Fay to set up an employee stock ownership plan and advise on related investments designed to defer capital gains taxes. Alcalde and Fay's complaint alleges that as a result of bad advice from Diamond, the IRS has concluded they owe $2 million in unpaid capital gains taxes, penalties and interest. Buchanan Ingersoll responded to the complaint late last month.
The joint motion to stay was filed in the U.S. District Court for the District of Columbia on Wednesday by John Prominski, a partner at Miles & Stockbridge representing Alcalde and Fay, and Pamela Breshanan, a partner at Vorys, Sater, Seymour and Pease who is representing Buchanan Ingersoll and Diamond.
The motion says, "The parties agree that, in the interest of judicial economy and to avoid the possibility of inconsistent results, it is preferable that the IRS issues be resolved prior to litigating this action on the merits."
On Thursday, Judge Gladys Kessler granted the motion and ordered that a status conference be held on Jan. 14.
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