Several BDO partners pleaded guilty to crimes related to similar tax strategies in 2009. The court said the Coes had not shown the deadline to sue should be delayed - or tolled - because they should have been "on notice" of their claims based in part on media reports about BDO's promotion of similar tax shelters that were found to be illegal. A spokesperson for BDO could not immediately be reached.Īn appeals court in 2021 affirmed a judgment for Proskauer in the case, holding the four-year statute of limitation applied to the claims and started running in 2002.
The Coes brought legal malpractice, negligent misrepresentation and other claims against Proskauer in 2015, alleging the law firm, BDO and investment advisor Gramercy conspired to promote such tax evasion schemes and split fees, and that Proskauer and BDO weren't independent.Ī representative for Gramercy declined to comment. The Coes relied on Proskauer's opinion for their 2001 tax return, which was later audited, leading the Coes to a 2012 settlement with the IRS. Proskauer advised the Coes that the strategy would likely survive an IRS audit without penalties, according to the decision. Wednesday's decision revives a lawsuit brought by the Coes, who at the suggestion of their accountants, BDO Seidman, got a legal opinion from Proskauer in 2002 about a strategy recommended by BDO to invest in distressed debt to offset tax obligations in connection with the sale of their company, according to the ruling. A group of Georgia-based accounting firms separately supported Proskauer's position. Other large law firms, including Alston & Bird, DLA Piper and King & Spalding, and group of seven former presidents of the Georgia state bar filed a brief in support of Proskauer.
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