Meredith lawyers agree to direct $400,000 of their liability insurance coverage to Ponzi scheme bankruptcy trustee

MANCHESTER — The two local attorneys who assisted a now defunct Meredith mortgage firm that was at the heart of a giant Ponzi scheme with many of their closings and trust documents, have agreed to settle their dispute with the trustees handling the bankruptcy.

Attorneys Michael Gould and Michael Burke (Gould & Burke, PLLC) have agreed to give $400,000 of their $2-million liability insurance limit to the bankruptcy estate of CL& M that is being administered by bankruptcy trustee Steven Notinger.

In a notice of a formal claim filed against the Gould & Burke in April of 2010, Notinger filed a claim for damages for legal malpractice against the law firm that allegedly assisted Scott Farah and Donald Dodge and their respective firms — Financial Resources Mortgage, Inc. and CL&M — in establishing hundreds of trusts and closing millions of dollars worth of mortgages used to effectively bilk hundreds of people from their life savings in what officials now know was a Ponzi scheme.

Gould and Burke have stated they were unaware of what Farah and Dodge were doing despite the fact that their offices were physically located in the same 15 Northview Drive, Meredith building as the former offices of both FRM and CL&M.

In addition, some of the victims of Farah and Dodge included Gould & Burke, PLLC in numerous civil actions filed mostly in Belknap County Superior Court shortly after FRM and CL&M collapsed in November of 2009.

Judge Kathleen McGuire stayed the suits pending the results of any actions taken against Gould & Burke in U.S. Federal Bankruptcy Court, District of New Hampshire.

Gould & Burke, PLLC are represented by Laconia attorney Phil McLaughlin, who has said the firm has "little in the way of assets and limited insurance coverage." He said the claims against his clients far exceed any available insurance coverage.

The balance of the $2-million policy limit, or $1.4 million, will be the subject of a mediation hearing among the rest of the litigants among the rest of the claimants in a mediation hearing scheduled for Monday and Tuesday, Dec 12 and 13 in Russ Hilliard's Concord Office.