After pointing a finger in the direction of his former associate in previous lawsuits over the alleged theft of his firm’s proprietary computer system, prominent Chicago area bankruptcy attorney Peter Francis Geraci has leveled a formal complaint against rival bankruptcy attorney Kevin Chern, demanding more than $1 million from Chern for his alleged role in the alleged conspiracy to use Geraci’s software to help build a rival business.
On July 21, Geraci filed suit in Cook County Circuit Court against Chern, alleging Chern, now managing partner of Upright Law in Chicago, helped the consumer bankruptcy firm known as Legal Helpers obtain and use the Geraci firm’s custom business software to grow their own business into what was one of the largest consumer bankruptcy practices in the country.
Geraci’s complaint alleges five counts against Chern, including violation of the Illinois Trade Secrets Act, breach of fiduciary duty, civil conspiracy and unjust enrichment.
Geraci is being represented in the action by attorneys Jonathan D. Parker, of Geraci Law, and Jeffrey O. Katz, of The Patterson Law Firm, both of Chicago.
Geraci has for years maintained he was the victim of a conspiracy involving several former employees of his firm to steal the proprietary software, known as GAPC, which the Geraci firm had paid to create in the 1990s to deal with many of the aspects and processes involved in filing and handling the large volume of bankruptcy cases Geraci and his attorneys litigate on an ongoing basis.
In 2010, Geraci sued R. William Amidon, a former Geraci employee who had played a large role in the creation and maintenance of the GAPC software from 1996-2006.
Geraci fired Amidon in 2006 when he allegedly discovered Amidon had copied GAPC software code and removed it from the law firm’s offices on numerous occasions. At the time, Amidon asserted “he had never done anything with the code,” thus avoiding prosecution, according to the most recent complaint against Chern.
But in subsequent civil litigation, Geraci said he learned Amidon had transferred the software to Geraci rival, attorney Thomas G. Macey. In other litigation still pending in federal court against Macey and others, Geraci indicated he believed Chern played a role in Amidon’s actions and may have served as the conduit by which the software allegedly made its way from Geraci’s firm to Macey’s.
In the July 21 lawsuit, Geraci makes those allegations formal, directly accusing Chern of the alleged actions harming his firm, and demanding the court award damages.
According to the complaint, Chern had worked for Geraci from 1993-1997, when he immediately took a position with Macey. According to the complaint, Geraci “caught Chern stealing client information and giving it” to Macey in 1997.
“Shortly afterward, in the early spring of 1997, Chern bought an expensive Toshiba laptop computer, quit his job with Geraci and immediately took a position with Macey” at the firm known as Legal Helpers, Geraci’s complaint states.
From there, Geraci alleges, Chern and Macey partnered to grow Legal Helpers into a “multi-office, multi-state, multi-attorney consumer bankruptcy law practice that would compete with Geraci’s.” And the secret to their success, Geraci said, was the allegedly surreptitious acquisition of Geraci’s case management software from Amidon.
“By using GapC software owned by Geraci, Chern reduced substantially the development costs associated with creating the type of proprietary software necessary to operate a sophisticated consumer bankruptcy law practice in direct competition with Geraci, and saved himself and his former law (firm) in excess of $1 million in development costs that Geraci incurred,” the complaint states.
From there, Geraci alleges Chern conspired to lure away attorneys – including former Legal Helpers partner Jeffrey Aleman - and others from Geraci’s firm to Legal Helpers, a task made easier by the precise similarities between the Geraci’s GapC and the Legal Helpers computer system, known as “LH1.”
Chern departed Legal Helpers in 2005, allegedly taking a $1 million buyout at the time.
This year, the Illinois Supreme Court affirmed the Illinois Attorney Registration and Disciplinary Commission's recommendation to suspend the law licenses of Macey and Aleman for two years for allegedly allowing non-lawyers to handle debt resolution cases from 2008-2011. Legal Helpers Debt Resolution, a company operated by Macey and Aleman apart from their bankruptcy practice, faced regulatory enforcement actions against it in Illinois and other states in connection with those activities.
Legal Helpers Debt Resolution agreed in 2011 to pay $2.1 million in restitution, under a settlement deal with Illinois Attorney General Lisa Madigan’s office.
Chern was not involved or implicated in the alleged activity underlying the enforcement actions against Legal Helpers Debt Resolution.