Bankruptcy judge lets Lewis Brisbois withdraw from Desai case

The law firm of Lewis Brisbois Bisgaard & Smith has gotten its wish to withdraw from defending Dr. Dipak Desai’s bankrupt clinics in the civil litigation stemming from the 2007 hepatitis C outbreak.

U.S. Bankruptcy Judge Mike Nakagawa issued an order last month giving the firm permission to get off the massive malpractice case.

Lewis Brisbois had complained to Nakagawa that it was caught in the middle of a nasty fight between its two clients — Nevada Mutual Insurance Company and Brian Shapiro, the trustee in the clinics’ Chapter 11 bankruptcy case.

Shapiro and Nevada Mutual, which insured Desai and the clinics, have been fighting for months over who controls the defense’s purse strings in the well-followed District Court litigation.

In his order, Nakagawa found merit to the Lewis Brisbois claim that Nevada Mutual had "improperly" interfered with the defense effort when it refused to pay legal fees to the firm.

"Under these circumstances, continued representation of the bankruptcy estate is at best unreasonably difficult," Nakagawa wrote. "Withdrawal pursuant to the applicable rules of professional conduct is appropriate."