Lloyd Ward Accused of of Gross Legal Malpractice by The Debt Answer and ABC Debt Relief: Update to Most Bizarre Debt Relief Suit of the Year

Not that long ago I published a story about the most bizarre debt relief lawsuit of the year where Lloyd Regner and The Debt Answer, among others, were suing his ex-partner Kevin Devoto and Dallas attorney Lloyd Ward.

A tipster (send in your tips here) sent in a copy of a newly filed amended complaint in the matter. Much of the silly name calling continues in this amended complaint, you are welcome to read the entire complaint, here.

But of interest is Lloyd Regner’s new update on his perspective of the entire infighting and client grabbing between The Debt Answer and Lloyd Ward and Associates and other Lloyd Ward personal and related entities.

Here is what his Ward’s ex-business partner has said in the most recent complaint filed. It sheds a new perspective or version of events surrounding the client grab that went on between The Debt Answer and Lloyd Ward.

From the Complaint

In 2010, Plaintiffs retained the legal services of [Lloyd] Ward, the founding attorney of Lloyd Ward & Associates, to ensure the appropriate compliance imposed by state law going forward. In this capacity, Ward regularly advised Plaintiffs on regulatory and structural issues, however over the course of the next two years Ward and Plaintiffs became co-parties in various matters of litigation. As such matters arose, Ward took the liberty of appointing himself as acting litigation counsel for Plaintiffs, a position in which Ward materially did nothing other than settle cases after failing to appear at hearings. Rather than advising Plaintiffs of the opportunity to waive such conflicts or otherwise afford an opportunity to obtain independent legal review from outside counsel, Ward unilaterally chose to ignore the apparent conflict of defending litigation in which he was a co-party. In the process, Ward put his own interests above that of his clients.

Compounding Ward’s propensity for unscrupulous business practices is the fact that Ward, lawyer for Plaintiffs, is currently holding approximately Four Hundred Thousand Dollars ($400,000) in expense reimbursements and other compensation owed to Plaintiffs pursuant to an agreement between the parties. Under this agreements, Plaintiffs used their own money to provide administrative support services to Ward’s clients, under the belief that such expenditures would be timely reimbursed by Ward, lawyer for Plaintiffs. To date, Ward, lawyer for Plaintiffs, has refused to repay any money due to Plaintiffs.

At the time of retaining Ward and Lloyd Ward & Associates’ services, there were to classes of clients that Plaintiffs had valid and existing contracts with: those that existed prior to the regulatory change and were grandfathered away from the requirements of the regulators (“Pre-Regulation Clients”), and those after, who were not grandfathered in, and who require a law firm, or a license to service them (“Post-Regulation Clients”).

On or about January 1, 2011, an Asset Purchase Agreement was signed whereby Lloyd Ward Group, Ward’s own debt reduction entity, was to acquire all of The Debt Answers clients, both Pre and Post=Regulation for the following consideration:

“10% of earnings attributable to the assets conveyed under this agreement calculated at the end of each one year anniversary of this agreement for a period of 5 (five) years beginning January 1, 2011. Lloyd Ward, PC will have 45 days to calculate this amount, to provide accounting information that verifies this amount, and to confirm this valuation as agreeable to sellers.”

To date, Ward, lawyer for Plaintiffs, or entities he purports to act through have paid nothing for the right to service these clients under the Asset Purchase Agreement. Ward, lawyer for Plaintiffs, essentially has used his role as Plaintiffs’ lawyer to his advantage by usurping Plaintiffs’ business under the guise of agreements Ward, had no intension of honoring, and without so much as notifying Plaintiffs of the opportunity to seek outside legal opinion. Despite Ward’s, recent Guerilla-style tactics at manipulating this fact to The Debt Answer and ABC Debt Reliefs clients, a legitimate agreement Plaintiffs and Ward, lawyer for Plaintiffs, was never effectuated, and Ward, lawyer for Plaintiffs’ clear position on both sides of the transaction is one of the many examples of gross legal malpractice committed by Ward, lawyer for Plaintiff, in his representation of Plaintiffs.

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At some point in early 2012, the relationship between Plaintiffs and Ward and Lloyd Ward & Associates ended. In order to preserve contractual relationships and maintain some sense of continuity for the customer, Plaintiffs were in the process of establishing new accounts to keep servicing their existing, Pre-Regulation Clients, independent from Ward, Lloyd Ward and Associates and Lloyd Ward Group.

On or about June 21, 2012 Ward, lawyer for Plaintiffs, sent an email to the clients of Plaintiffs, with whom Plaintiffs had long standing contracts with. These clients included the Pre-Regulation Clients that did not require the use of an attorney in their debt settlement. In this transmission, Ward, lawyer for Plaintiff, made his best pitch at taking these client’s business from Plaintiffs by stating that he had fired Plaintiffs and issued cease and desist letters for the improper access of Plaintiffs own client data. Further Ward, lawyer for Plaintiffs, portrayed Plaintiffs as borderline criminals should they do as much as contact their own clients, and went as far as requesting the clients to call their local State Attorney General’s office if Plaintiffs did contact them. The email was in essence, a ruse by Ward, lawyer for Plaintiffs, to trick these clients into believing they had no choice but te change debt settlement providers to his law firm and abandon the relationships and service they had received with Plaintiffs.

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On one hand, the Pre-Regulation Clients that Was, lawyer for Plaintiffs, made an effort to abscond with under the veil of a poorly written and deceptive email, had established contractual relationships with, and belonged to Plaintiffs long before Ward or the FTC Regulations entered the picture. In the hours following Ward’s email, many long time clients contacted Plaintiffs to question the very legitimacy of Ward’s crass communications, while others simply contacted Ward, personally, admonishing him for the inept handling of their debt settlement.

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On the other hand, the batch of Post-Regulation Clients who etered debt settlement agreements on or after the FTC regulations took effect, and who require the services of an “attorney,” a term used loosely in the context of Ward, for their debt settlement, are rightfully Ward’s to continue to do business with. In an effort to mitigate the effects of a costly pending lawsuit brought by the State Bar of Texas for the gross mismanagement of Ward’s debt settlement practice, and out of sheer greed, Ward, lawyer for Plaintiffs, attempted to seize all of the clients and the associated fees, after the relationship with Plaintiffs ended.

Additionally, in what amounts to nothing more than an attempt at retribution and to cause Plaintiff Regner anguish and additional tax liabilities, Ward, lawyer for the Plaintiffs, knowingly filed erroneous 2010 tax documents, specifically SBK-1 forms (“K-1”), with the Internal Revenue Services (“IRS”), and sent Regner the same, stating Regner received income from Lloyd Ward Group that he never did.

Any tax liabilities and income received from Lloyd Ward Group have already been appropriately accounted for and reported to te IRS by Regner personally, or through entities Plaintiff is involved with, and the attempt to collect taxes on essentially duplicative income is now under formal protest.

According to former associates, Ward, lawyer for Plaintiffs, insists on exacting revenge on those who he has had a negative business relationship with, while sparing others such as former business partner (Kevin Devoto), the felon, who has not received any K-1s from Ward. In many cases creating unfounded tax liability is the Ward’s vehicle of choice.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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