Risk Update

“That’s just, like, your [Disqualification] opinion, man.” — Twisted Pot Matter Logic Deals Conflicts DQ

Attys DQ’d For Using ‘Twisted Logic’ In Calif. Pot Co. Dispute” —

  • “A California appeals court on Monday upheld a decision to disqualify a law firm involved in a multipronged dispute involving control of a cannabis cultivator, saying the lawyers used ‘twisted logic’ to justify representing multiple parties in the matter.”
  • “Specifically, the appeal focused on Catanzarite’s work as counsel for shareholders in a derivative action against CTI, as well as its representation — purportedly on behalf of the same company — in another lawsuit with a lender.”
  • “As described in the decision, a schism in CTI leadership led to one group of shareholders, called the Probst Faction, asserting power within the company. Attorneys from Catanzarite filed multiple lawsuits on behalf of the other group of CTI investors, called the O’Connor Faction, as well as other shareholders between 2018 and 2019.”
  • “Catanzarite, which was at the time representing various disgruntled CTI investors against the company and its principals, filed counterclaims against FinCanna, purporting to represent CTI itself. According to the decision, Catanzarite attorneys apparently copy-and-pasted material from one of their derivative shareholder actions into their cross-complaint against FinCanna.”
  • “‘Catanzarite appears to be arguing concurrent representation was possible because after the O’Connor Faction asserted control of the corporation, these shareholders effectively became insiders of the corporation,’ the court said. ‘This is twisted logic.'”
  • “The appellate panel found that Catanzarite’s representation of investors in a derivative shareholder action against CTI was untenable while the law firm also purported to represent the company in its dispute with FinCanna.”