Risk Update

Rackspace Risk — Continued Conflicts Allegations (Lawyer and Accountant) and Divorce Drama

Posted Dan Bressler

“Texas Justices Won’t Nix DQ In Rackspace Founder’s Divorce” —

  • “The Texas Supreme Court denied Friday a petition to overturn lower court rulings disqualifying a San Antonio attorney from representing the wife of cloud computing company Rackspace Technology Inc. founder Graham Weston in a contentious divorce case.”
  • “The court’s decision leaves in place a March order by Comal Cy District Judge Dib Waldrip disqualifying Jason Davis of Davis & Santos PC from representing Elizabeth Weston in the divorce case. As is usual with mandamus denials, the state Supreme Court didn’t offer an explanation of its reasoning behind the decision.”
  • “Elizabeth Weston petitioned the court for relief in July, arguing Judge Waldrip had wrongly lumped Graham Weston together with companies he manages in finding that he was a current client of Davis whom Davis owed a general duty of trust and loyalty to.”
  • “Graham Weston challenged Elizabeth Weston’s relief request, arguing she had waited months to file the request and hadn’t first sought relief from the trial court.”
  • “Elizabeth Weston filed for divorce in October 2020 and listed Davis, a longtime attorney and friend, as her counsel of record. Graham Weston quickly moved to disqualify Davis, arguing it would be a conflict of interest for Davis to represent Elizabeth Weston when he had represented Graham Weston in related matters and that it was a threat to disclosing confidential information, according to court documents. The parties held an evidentiary hearing on the matter in December, and Judge Waldrip granted Graham Weston’s request in March… the judge said he had found a conflict of interest arose when Davis learned Elizabeth Weston planned to proceed adversely against Graham Weston in the divorce.”

“Graham Weston’s wife accuses San Antonio accounting firm of fraud in lawsuit arising from divorce” —

  • “A San Antonio accounting firm has been caught up in the widening litigation arising from the contentious divorce of real estate developer Graham Weston and his wife Elizabeth.”
  • “She has accused Irwine Pruitt Associates and principal James Irwine of assisting her estranged husband in creating more than 150 business entities and trusts that were used to defraud her of property ownership rights in the various assets and their income. She estimates more than $1 billion in assets and income are involved.”
  • “‘Because Graham claims that all property acquired during the marriage is his separate property, that now reveals a long-running scheme to fraudulently conceal and remove property from Elizabeth’s rightful possession and joint community control,’ she alleges.”