FILED: NEW YORK COUNTY CLERK 08/14/2012 INDEX NO /2012 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 08/14/2012

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1 FILED: NEW YORK COUNTY CLERK 08/14/2012 INDEX NO /2012 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 08/14/2012 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK DAVID LICHTENSTEIN, THE LIGHTSTONE GROUP, LLC, and LIGHTSTONE HOLDINGS, LLC, Plaintiffs, V. : Index No /12 WILLKIE FARR & GALLAGHER LLP, MARC ABRAMS, MATTHEW FELDMAN, and MARGOT SCHONHOLTZ, Defendants. MEMORANDUM OF LAW IN SUPPORT OF MOTION OF DEFENDANTS WILLKIE FARR & GALLAGHER LLP AND MARC ABRAMS TO DISMISS THE COMPLAINT OfCounsel: CAHILL GORDON & REINDEL LLP 80 Pine Street Thomas J. Kavaler New York, New York John 0. Enright (212) Attorneysför Defendants Wilikie Farr & Gallagher LLP and Marc Abrams

2 TABLE OF CONTENTS Pag Table of Authorities PRELIMINARY STATEMENT iv i THE COMPLAINT S ALLEGATIONS 2 ARGUMENT A. The Parties 2 B. Lichtenstein Purchases ESI and Personally Guarantees $1 00 Million of Debt 3 C. Weil Gotshal, Counsel for ESI, Advises Lichtenstein ofhis Fiduciary Obligations Surrounding ESI s Insolvency and Bankruptcy Filing 4 D. Willkie Farr s Alleged Advice to Lichtenstein 5 E. The Complaint s Deficient Allegations That Wilikie Farr Caused Plaintiffs Any Injury 5 F. The Guarantors Are Held Liable Under the Guaranties 7 G. Lichtenstein Moves to Disqualify Wilikie Farr in the Guaranty Actions 8 H. The Complaint s Causes ofaction 9 COUNT I FAILS TO STATE A CAUSE OF ACTION FOR LEGAL MALPRACTICE 10 A. Count I Does Not Adequately Allege Malpractice The Allegation that Willkie Farr Actionably Advised Lichtenstein of His Duty to Support ESI s Bankruptcy Filing Fails as a Matter of Law Because Such Advice Was Reasonable and Consistent with Applicable Law The Facts Pled in the Complaint Fail to Demonstrate that Any Self-Interest Prevented Willkie Farr from Rendering Independent Legal Advice 14

3 B. The Legal Malpractice Cause of Action Is Deficient Because Plaintiffs Cannot, as a Matter of Law, Demonstrate that Defendants Purported Malpractice Caused the Damages Alleged in the Complaint The Allegation That, Absent Willkie Farr s Legal Advice, The Guarantors Would Not have Incurred Liability Under the Guaranties Is Fatally Undermined by Facts Admitted in the Complaint Lichtenstein Admits that ESI s Inability to Pursue Its Pre Arranged Plan of Reorganization and Request to Use Cash Collateral Not Willkie Farr s Legal Advice Proximately Caused the Guarantors Alleged Damages 20 II. COUNT II FAILS TO STATE A CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTY 21 A. Count II (Breach of Fiduciary Duty) Should Be Dismissed Because It Is Redundant of Count I (Legal Malpractice) 21 B. Count II (Breach of Fiduciary Duty) Fails as a Matter of Law for the Same Reasons as Count I (Legal Malpractice) 21 III. IV. COUNT III FAILS TO STATE A CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTY 22 COUNT IV FAILS TO STATE A CAUSE OF ACTION FOR UNJUST ENRICHMENT 22 A. Plaintiffs Lack Standing to Sue for Unjust Enrichment Based on Attorneys Fees and Costs Paid to Willkie Farr By Bank of America 23 B. The Complaint Fails To State A Cause OfAction For Unjust Enrichment Based On Attorneys Fees and Costs Paid to Willkie Farr By Plaintiffs Count IV (Unjust Enrichment) Should Be Dismissed Because It Is Duplicative of Count I (Legal Malpractice) Count IV Fails as a Matter oflaw Because Attorneys Cannot Be Unjustly Enriched by Fees Paid for Services Performed Pursuant to an Engagement Letter 24 11

4 V. COUNT V FAILS TO STATE A CAUSE OF ACTION UNDER JUDICIARY LAW SECTION CONCLUSION

5 TABLE OF AUTHORITIES Cases Page Alden v. Brindisi, 91 A.D.3d (4th Dep t 2012) 20, 21 AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428 (2007) 10, 18-19, 20 In re American mt 1 Grp., Inc. Consolidated Derivative Litig., 976 A.2d 872 (Del. Ch. 2009) 16 Art Capital Grp., LLC v. Neuhaus, 70 A.D.3d 605 (1st Dep t 2010) 15 Aymes V. Gateway Demolition Inc., 30 A.D.3d 196 (1st Dep t 2006) 23 Darby & Darby, P.C. v. VSIInt l, Inc., 95 N.Y.2d 308 (2000) 10 Englert v. Schaffer, 61 A.D.3d 1362 (4th Dep t 2009) 25 Estate ofsteinberg v. Harmon, 259 A.D.2d 318 (1st Dep t 1999) 22 First Cent. Say. Bank v. Meridian Res. Cap., 35 Misc. 3d 1206(A), 2012 WL (Sup. Ct. Nassau Cnty. 2012) 23 G. K Las Vegas Ltd. v. Boies Schiller & Flexner LLP, 96 A.D.3d 53 8 (1 St Dep t 2012) 24 Geyer v. Ingersoll Pubi ns Co., 621 A.2d 784 (Del. Ch. 1992) 11 Goldman v. Metropolitan Life Ins. Co., 5 N.Y.3d 561 (2005) 24 Hart v. GeneralMotors Corp., 129 A.D.2d 179 (1st Dep t 1987) un In re Hechinger mv. Co., 274 B.R. 71 (D. Del. 2002) 11, 12 In re High Strength Steel, Inc., 269 B.R. 560 (Bankr. D. Del. 2001) 12 In re Hunter, 4 N.Y.3d 260 (2005) 22 MCC Dev. Corp. v. Perla, 23 Misc. 3d 1 126(A) (Table), 2009 WL (Sup. Ct. N.Y. Cnty. 2009) 24 McCoy v. Feinman, 99 N.Y.2d 295 (2002) 16 North Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92 (Del. 2007) ui,us Odyssey Partners, L. P. v. Fleming Cos., 73 5 A.2d 3 86 (Del. Ch. 1999) 12 Official Comm. ofunsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340 (3d Cir. 2001) 16 -iv-

6 OFSIFundII, LLC v. Canadian ImperialBank ofcommerce, 82 A.D.3d 537 (1st Dep t 2011) 15 Pecile v. Titan Capital Grp., LLC, 96 A.D.3d 543(1st Dep t 2012) 15 Pellegrino v. File, 291 A.D.2d 60 (1st Dep t 2002) 17, 18, 20 Phillips-Smith Specialty Retail Grp. II, L.P. v. Parker Chapin Flattau & Klimpl, L.L.P., 265 A.D.2d 208 (1st Dep t 1999) 17, 18 Pyne V. Block & Assocs., 305 A.D.2d 213 (1st Dep t 2003) 20, 21 RGHLiquidating Trust v. Deloitte & Touche LLP, 71 A.D.3d 198 (1st Dep t 2009), rev d on other grounds, 17 N.Y.3d 397 (2011) 4n Rosner v. Paley, 65 N.Y.2d 736 (1985) 10 Shandler v. DLJMerch. Banking, Inc., No. 4797, 2010 WL (Del. Ch. July 26, 2010) 12 Sun Graphics Corp. v. Levy, Davis & Maher, LLP, 94 A.D.3d 669 (1st Dep t 2012) 21 Town ofwallkill v. Rosenstein, 40 A.D.3d 972 (2d Dep t 2007) 23 In re USA Detergents, Inc., 418 B.R. 533 (Bankr. D. Del. 2009) 12 Weil, Gotshal & Manges, LLP v. Fashion Boutique, 10 A.D.3d 267 (1st Dep t 2004) 21 Wiener v. LazardFrères & Co., 241 A.D.2d 114 (1st Dep t 1998) 23 RULES Fed. R. Bankr. P Bankruptcy Code STATUTES 11U.S.C N.Y. CPLR 321 1(a)(7) (McKinney Supp. 2012) 1 N.Y. Jud. Law 487 (McKinney 2005) 10

7 Defendants Wilikie Farr & Gallagher LLP ( Wilikie Farr or the Firm ) and Marc Abrams ( Abrams ) submit this memorandum of law in support of their motion to dismiss the complaint (the Complaint ) of plaintiffs David Lichtenstein ( Lichtenstein ), The Lightstone Group, LLC, and Lightstone Holdings, LLC (collectively, Plaintiffs ) for failure to state a cause of action pursuant to CPLR 3217 PRELIMINARY STATEMENT David Lichtenstein, a sophisticated commercial real estate investor, acquired control of a company called Extended Stay, Inc. ( ESI ) in Toward that end, he put up very little capital and borrowed several billion dollars. The lenders required that he personally guarantee the payment of $1 00 million if he committed certain bad boy acts. Ultimately, it transpired that he did commit such acts: He voted to put the company into bankruptcy, thus triggering his guaranties. He then litigated his liability under the guaranties and lost. In putting ESI into bankruptcy, Lichtenstein admits that he and the other directors of ESI were guided by the advice of ESI s restructuring counsel, the eminent firm of Weil Gotshal. As ESI s financial condition deteriorated, Weil Gotshal advised Lichtenstein and the other directors of ESI that their fiduciary duties to ESI required them to preserve and maximize the value of ESI for the benefit of creditors and other constituencies. Weil Gotshal s advice was consistent with Delaware law, which governs the duties that its fiduciaries owed to ESI, a Delaware corporation. Weil Gotshal ultimately advised Lichtenstein and ESI s other directors that a bankruptcy filing was the only way to maximize value and not waste assets available to satisfy ESI s obligations to its creditors. 1 Defendants Matthew Feldman and Margot Schonholtz have each made separate motions to dismiss. Their supporting memoranda join in the arguments herein, and also state additional grounds for dismissal. 1

8 According to the Complaint, Lichtenstein retained Willkie Farr to advise him separately. He does not claim Willkie Farr advised ESI itself or any of the other Board members who voted to put ESI into bankruptcy. Willkie Farr, Lichtenstein says, erred by giving him advice consistent with the advice he had received from Weil Gotshal. Because Willkie Farr s alleged advice was consistent with Delaware law which Lichtenstein has judicially admitted and because Lichtenstein has not adequately alleged that Willkie Farr s advice was the proximate cause of any damage to him, his claim of malpractice and his related claim of breach of fiduciary duty fail as a matter of law. The final three counts of the Complaint which arise out of Lichtenstein s motion to disqualify Willkie Farr in litigation brought against him on the guaranties and seek to recoup legal fees are nothing more than a transparent sideshow asserted only to create unfair prejudice. They are deficient for a variety of reasons including the fact that this Court has already declined to grant Lichtenstein s request for legal fees in its orders disposing ofthe motion to disqualify. Undeterred by the fact that none of the damages he seeks to recover can be laid at Willkie Farr s doorstep, Lichtenstein now seeks to visit the consequences of his own actions or the actions of various non-parties upon Willkie Farr. To do so, he has enlisted the services of his latest counsel not Willkie Farr, not Weil Gotshal, not counsel that defended him in the actions on the guaranties to bring this lawsuit which is wholly devoid of factual or legal merit. This is Wilikie Farr s motion to dismiss that lawsuit. THE COMPLAINT S ALLEGATIONS A. The Parties Plaintiff Lichtenstein admits he is a successful residential and commercial real estate professional, who is the principal of a group of Lightstone entities that own and -2-

9 manage his real estate holdings, including Plaintiffs The Lightstone Group, LLC, and Lightstone Holdings, LLC. (Ex. A J 54)2 Defendant Wilikie Farr is a law firm with its headquarters in New York. (Id. 8.) Defendants Abrams, Feldman, and Schonholtz are members of the Firm. (Id. J ) B. Lichtenstein Purchases ES! and Personally Guarantees $100 Million of Debt In 2007, Lichtenstein and Lightstone Holdings, LLC, together with a consortium of investors, purchased Extended Stay, Inc. and related entities ( ESI ), which owns and manages hotels, for $8 billion. (Id. J ) Lichtenstein managed ESI and its related entities and served as President, CEO, and Chairman of Extended Stay, Inc., the ultimate parent company. (Id. 1 6.) Lichtenstein does not claim that any of the Defendants represented him at the time of his purchase of ESI, or that any of them had any involvement whatsoever in its purchase. (Id. f12-16.) In addition to an equity investment, the acquisition of ESI was financed through.... a combination of $4. 1 billion in mortgage loans to ESI and $3.3 billion in ten mezzanine loan tranches made to ESI subsidiaries. (Id. 1 3.) [T]he loan documents contained a set of eleven personal guarant[ies] (the Guaranties ) signed by Mr. Lichtenstein and Lightstone Holdings (collectively, the Guarantors ). (Id. 14.) The Guaranties provided for $100 [million in] personal liability against Mr. Lichtenstein and Lightstone Holdings to the Lenders in the event of particular bad boy acts, including the voluntary filing of a bankruptcy petition by ESI. (Id.) Lichtenstein does not claim that Willkie Farr or any other Defendant represented him at the time he decided to make the Guaranties and assume $ 1 00 million in potential 2 Citations in the form Ex. refer to exhibits attached to the Affidavit of Thomas J. Kavaler, sworn to on August 13, 2012 and submitted in support ofthe motions to dismiss ofall Defendants. -3-

10 personal liability for ESI s debt, or that they had any involvement whatsoever in his decision. (Id. J ) C. Weil Gotshal, Counsel for ES!, Advises Lichtenstein of his Fiduciary Obligations Surrounding ES! s!nsolvency and Bankruptcy Filing Soon after the purchase of ESI, as the overall economy suffered, the financial situation of ESI declined, and by late 2008, ESI faced a liquidity crisis and retained Weil, Gotshal... to advise ESI on its restructuring efforts. (Id. 1 7.) As the financial condition of ESI continued to deteriorate, Weil Gotshal advised Lichtenstein and the other directors of ESI that their fiduciary duties to ESI required them to preserve and maximize the value of ESI for the benefit of creditors and other constituencies. (Id. 23 ; Ex. D 1 3 )3 Plaintiffs do not claim that any ofthe Defendants represented ESI or its Board. and that Lichtenstein (Ex.Af 23.) Plaintiffs admit that by June 2009, ESI s situation had become all the more dire was faced with a choice to either a) have ESI file for bankruptcy (in which case [he] would incur $100 [million] in individual contractual liability) or, b) seek an alternative, including to refuse, or at least delay, any bankruptcy filing and force the Lenders hand to file a petition for involuntary bankruptcy or foreclose on the collateral (in which case [he] would risk a lawsuit under a breach of fiduciary claim). Weil Gotshal advised Lichtenstein and ESI s other directors that they had an obligation as fiduciaries to achieve that result. (Id. 21.) Plaintiffs admit that, given Lichtenstein s position as ESI s President, CEO, and Chairman and his control of a majority 3 Documents that appear on the Bankruptcy Court s docket in In re ExtendedStay, Inc., No (JMP) (Bankr. S.D.N.Y.), and related actions, or on this Court s docket, are the proper subject ofjudicial notice and may be considered by the Court in deciding this motion. See, e.g., RGHLiquidating Trust v. Deloitte & ToucheLLP, 71 A.D.3d 198, (1st Dep t 2009), rev don othergrounds, 17 N.Y.3d 397 (2011). -4-

11 of the members of the board of directors of ESI, the ultimate decision [oni whether ESI was going to file for bankruptcy rested on Lichtenstein. (Id. J 16, 22.) At 3 a.m. on Monday, June 1 5, 2009, ESI filed a voluntary Chapter 1 1 petition with the United States Bankruptcy Court for the Southern District ofnew York. (Id. 36; Ex. F at 1-3).) D. Wilikie Farr s Alleged Advice to Lichtenstein According to the Complaint, Willkie Farr, whom Lichtenstein alleges he had retained to advise him separately in his role as an officer and director of ESI, particularly as to the liability of [Lichtenstein] and his entities in any restructuring, gave him advice consistent with the advice he had received from Weil Gotshal. (Ex. A J 19, 21.) Wilikie Farr made fullthroated warnings about Lichtenstein s drastic exposure in the event ESI failed to file for bankruptcy. (Id. J 19, 24.) [Wilikie Farr] warned Lichtenstein that he faced the prospect of unequivocal and uncapped personal liability in any subsequent action by ESI s lenders for breach of fiduciary duty. (Id. 33.) E. The Complaint s Deficient Allegations That Willkie Farr Caused Plaintiffs Any Injury Eliding the fact that it was Weil Gotshal that advised ESI to file for bankruptcy, and ESI s Board that made that decision, Lichtenstein now makes the conclusory claim that (a) his decision to file was [biased on the advice of [Wilikie Farr] that doing so was consistent with his fiduciary obligations to ESI and (b) Wilikie Farr s advice led him to accept liability under the Guaranties. (Id. 36.) But the facts recited in the Complaint, as well as in publicly filed bankruptcy pleadings, tell a very different story. They reveal that Lichtenstein never accepted liability under the Guaranties. On the contrary, he endeavored relentlessly to avoid liability. It was the -5-

12 lack ofsuccess ofthese efforts that caused the alleged injury ofwhich he now complains for the first time years later. Shortly before ESI s bankruptcy filing, Lichtenstein sought to avoid his liability under the Guaranties by negotiating a restructuring ofesi s debt with ESI s mezzanine lenders (the Banks ). (See Id. 32.) But Lichtenstein was not successful in reaching agreement with the Banks. (Id. J ) Lichtenstein does not allege that anyone at Wilikie Farr advised him in connection with or participated in those negotiations or had any contact with the Banks in the course of those negotiations. That was not Lichtenstein s only attempt to avoid his liability under the Guaranties. Lichtenstein tried to make a separate deal with a group of ESI lenders that held certificates that had been issued when ESI s senior mortgage lenders sold offthat loan (the Certificate Holders ). (Ex. E at Ex. C (the Term Sheet ).) Lichtenstein does not allege that anyone at Wilikie Farr advised him in connection with or participated in those negotiations on his behalf or had any contact with the Certificate Holders in the course of those negotiations. Ultimately, Lichtenstein made a deal with certain Certificate Holders for a pre arranged plan of reorganizationjust before ESI filed for bankruptcy. (Id.) The pre-arranged plan contemplated certain Certificate Holders obtaining a substantial equity interest in a reorganized ESI. (Id. at 2-5). In return, the Certificate Holders agreed that ESI would indemnify Lichtenstein for his liability under the Guaranties incurred as a result of ESI s bankruptcy filing. (Id. at 7-9.) In addition, Lichtenstein extracted a promise that $5 million ofesi s lenders cash collateral would be contributed to defend Lichtenstein in any lawsuits to enforce the Guaranties. (Id.) -6-

13 The papers that ESI filed together with its Chapter 1 1 Petition included a Term Sheet that detailed the pre-arranged plan of reorganization, including the indemnification of Lichtenstein for any liability he would incur under the Guaranties. (Id.) Those papers also included a motion to approve the use of up to $5 million of cash collateral to fund Lichtenstein s defense costs in actions to enforce the Guaranties (the Cash Collateral Motion ). (Id. at 7-9; Ex. G.) In short, Lichtenstein authorized ESI to file for bankruptcy only after negotiating, and fully expecting, to avoid liability under the Guaranties. The bankruptcy court did not approve the pre-arranged plan of reorganization, however. 4 And in the face of opposition from its creditors, ESI withdrew the Cash Collateral Motion. (See, e.g., Ex. I; Ex. J 37.) The Complaint does not allege that Willkie Farr had any role in negotiating or drafting the Term Sheet, the Cash Collateral Motion, or other bankruptcy pleadings. Nor does it allege that Wilikie Farr had any involvement whatsoever in ESI s bankruptcy proceedings, the Court s rejection ofthe Term Sheet, or the failure ofthe Cash Collateral Motion. F. The Guarantors Are Held Liable Under the Guaranties ESI s lenders subsequently filed three separate actions under the Guaranties (the Guaranty Actions ) (see Ex. A 37), and Plaintiffs seek herein to recover from Willkie Farr the costs of defending those actions. The Guarantors defense ofthe Guaranty Actions, of course, would have been funded by the cash collateral had the bankruptcy court approved the course of action proposed by the Term Sheet all matters dehors Willkie Farr s engagement. 4 The bankruptcy court concluded that the Certificate Holders lacked standing to propose a plan of reorganization because they were permitted to act only through the special servicer ofesi s mortgage loan, which was not a party to the agreement embodied in the Term Sheet. (See, e.g., Ex. H at ) -7-

14 As a result of the failure to secure such approval, the Guarantors were left without indemnification for liability under the Guaranties. (See Id. 39.) They vigorously defended the Guaranty Actions, arguing full-throatedly that they should not be held liable because, in authorizing ESI to file for bankruptcy, Lichtenstein acted consistent with his fiduciary duties as a director of ESI by maximiz[ing] the value of ESI and preventing waste of assets that could be used to satisfy creditors claims. (Ex. K at 8.) The Court, however, granted the plaintiffs motion for summary judgment in lieu of complaint and enforced the Guaranties. (Ex. Q.) G. Lichtenstein Moves to Disqualify Wilikie Farr in the Guaranty Actions Three ofthe Complaint s five Counts are putatively based on the fact that Willkie Farr subsequently represented Bank ofamerica in the Guaranty Actions. This representation occurred as a consequence of defendant Schonholtz joining Willie Farr from Kaye Scholer LLP ( Kaye Scholer ) in May (Ex. A 41.) While still at Kaye Scholer, Schonholtz had acted as counsel to Bank of America when the Guaranty Actions were commenced. (Id.) She continued to represent Bank of America after joining Willkie Farr, and Lichtenstein moved to disqualify the Firm and asked the Court to award him the attorneys fees he incurred in seeking that relief. (See Id. 40, et seq.) Willkie Farr voluntarily withdrew in two of the three Guaranty Actions, but opposed the motion in the Line Trust Action because in that case Bank of America and Lichtenstein were co-defendants. (See Ex. N at 1, 4; Ex. A 46.) The Court denied as moot the motions to disqualify in the two Guaranty Actions from which Willkie Farr had withdrawn, but disqualified the Firm in the Line Trust Action. The Court rejected Lichtenstein s request for attorneys fees incurred in moving to disqualify. (Ex. M; Ex. N at 6-7.) Lichtenstein neither moved for reargument nor appealed. -8-

15 H. The Complaint s Causes of Action The Complaint asserts five causes of action against Wilikie Farr, Abrams, and Feldman. Counts I and II, for legal malpractice and breach of fiduciary duty, allege that these defendants embraced Weil Gotshal s erroneous advice that Lichtenstein had a fiduciary duty to have ESI file for bankruptcy and that Willkie Farr warned Lichtenstein that he faced the prospect of unequivocal and uncapped personal liability in any subsequent action... by the Lenders for breach of fiduciary duty. (Ex. A J 21, 33.) This advice... was wrong, the Complaint alleges, because the Lenders had insisted on a bankruptcy remote architecture in structuring the loans, and, as such, Willkie failed to advise Lichtenstein that he held no fiduciary duty to these very same creditors to file for bankruptcy. (Id. 25.) As for damages on these two Counts, the Complaint seeks to recover the $1 00 million in liability that was incurred in the Guaranty Actions, together with defense costs totaling $4 million. (Id. J 54, 59.) In an effort to divert attention from the insufficiency of their legal-malpractice allegations, and to create unfair prejudice, Plaintiffs have padded the Complaint with three additional Counts that seek to re-litigate aspects ofthe Guarantors prior motion to disqualify Willkie Farr in the Guaranty Actions. (See, e.g., id. 3.) Unable to concoct a claim of malpractice against Schonholtz, Plaintiffs name her as a defendant only in the three Counts concerning the Guaranty Actions. Count III alleges a putative breach of fiduciary duty based on Willkie Farr s representation of Bank of America in the Guaranty Actions and seeks, by collaterally attacking the Court s refusal to award attorneys fees against Willkie Farr based on the disqualification motion, to recover as damages $ 125,000 in attorneys fees allegedly incurred in moving to disqualify Willkie Farr. (Id. J 50, ) Count IV alleges that Defendants were unjustly enriched by the fees and costs paid by [Lichtenstein] and by any fees and costs paid by [Bank of -9-

16 America not by Plaintiffs] in the Guaranty Actions and asks the Court to award Plaintiffs those sums as damages. (Id. f 68 & Prayer for Relief (4).) Count V alleges a violation of Judiciary Law section 487 based on Willkie Farr s representation of [Bank ofamerica] in the [Guaranty Actions,]... including by... presenting multiple misleading affidavits to the Court in connection with the partially successful motion to disqualify. It seeks to recover as damages $125,000 in attorneys fees that Plaintiffs allegedly incurred in connection with that motion that is, the same relief that this Court previously did not grant which Plaintiffs now ask be trebled pursuant to Judiciary Law 487. (Id. J ) ARGUMENT I. COUNT I FAILS TO STATE A CAUSE OF ACTION FOR LEGAL MALPRACTICE Whether [a] pleading [is] sufficient to state a cause of action for legal malpractice pose[s] a question of law which [can] be determined on a motion to dismiss. Rosner v. Paley, 65 N.Y.2d 736, 738 (1985). In order to sustain a claim for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff and that the plaintiff would have succeeded on the merits ofthe underlying action but for the attorney s negligence. AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428, 434 (2007). A. Count I Does Not Adequately Allege Malpractice 1. The Allegation that Willkie Farr Actionably Advised Lichtenstein of His Duty to Support ESI s Bankruptcy Filing Fails as a Matter of Law Because Such Advice Was Reasonable and Consistent with Applicable Law No cause of action for malpractice will lie where an attorney s advice is consistent with the law. Darby & Darby, P.C. v. VSIInt l, Inc., 95 N.Y.2d 308, 315 (2000). -10-

17 The Complaint alleges that Willkie Farr embraced Weil Gotshal s erroneous advice that Lichtenstein had a fiduciary duty to cause ESI to file for bankruptcy, and that Mr. Abrams warned Lichtenstein that he faced the prospect of unequivocal and uncapped personal liability in any subsequent action... by the Lenders for breach of fiduciary duty. (Ex. A J 21, 3 3.) This advice provided by Willkie was wrong, the Complaint alleges, because the Lenders had insisted on a bankruptcy remote architecture in structuring the loans, and, as such, Wilikie failed to advise Lichtenstein that he held no fiduciary duty to these very same creditors to file for bankruptcy. (Id. 25.) These allegations are insufficient to allege malpractice, because Willkie Farr s advice was consistent with Delaware law. 5 Under Delaware law, Lichtenstein s fiduciary duties as a director of an insolvent corporation required him to maximize the Company s long-term value for the benefit of ESI s creditors and other constituencies, such as equity holders and employees (given ESI s potential WARN Act liability). See, e.g., N Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, (Del. 2007) ( [w]hen a corporation is insolvent... its creditors take the place of the shareholders as the residual beneficiaries of any increase in value and make[] the creditors the principal constituency injured by any fiduciary breaches that diminish the firm s value ) (citation and internal quotation marks omitted); Geyer v. Ingersoll Publ ns Co., 62 1 A.2d 784, 789 (Del. Ch. I 992) ( The existence of the fiduciary duties at the moment of insolvency may cause directors to choose a course of action that best serves the entire corporate enterprise rather than any single group interested in the corporation at a point in time when shareholders wishes should not be the directors only concern. ); In re Hechinger mv. Co., 274 B.R. 7 1, 89 (D. Del. 2002) ( in 5 Delaware law governs Lichtenstein s fiduciary duties as a director ofesi because ESI is a Delaware corporation (Ex. F at 8). Hart v. Gen. Motors Corp., 129 A.D.2d 179, 183 (1st Dep t 1987). 11

18 insolvency, the directors... fiduciary duties are to multiple constituencies and require[] the board to maximize the corporation s long-term wealth creating capacity ). Consistent with the full-throated warnings that the Complaint credits Willkie Farr with providing Lichtenstein regarding his drastic exposure for breach of fiduciary duty (Ex. A f 24, 33), courts have recognized that a director faces personal liability for a duty-ofloyalty violation in the precise circumstances in which Lichtenstein found himself. Where a fiduciary (as Lichtenstein admits he was) fails to file for bankruptcy or delays filing in order to serve his personal interest, such as to avoid liability under a guaranty, and the corporation s value is diminished as a result, he faces uncappedpersonal liability. In re USA Detergents, Inc., 418 B.R. 533, (Bankr. D. Del. 2009); cf Odyssey Partners, L.P. v. Fleming Cos., 735 A.2d 386, (Del. Ch. 1999); Shandler v. DLJMerch. Banking, Inc., No. 4797, 2010 WL , at *15 (Del. Ch. July 26, 2010). See also In re High Strength Steel, Inc., 269 B.R. 560, 565, 569 (Bankr. D. Del ) (trustee stated breach of fiduciary duty claim against directors who authorized insolvent corporation to pay a secured creditor at the expense of... unsecured creditors in order to avoid defendants personal liability under a guaranty of corporation s debt to the secured creditor). Consistent with this law, Lichtenstein has judicially admitted that he owed a fiduciary duty to support ESI s bankruptcy in numerous filings that he made in this Court. All of these filings were prepared by other attorneys for Lichtenstein, not by Willkie Farr. For example, in a verified pleading in April 201 1, Lichtenstein admitted: Aware that his fiduciary and contractual duties under the Loan Agreements obligated him to prevent waste ofesi and its assets, Lichtenstein authorized ESI to file for bankruptcy, which it did on June 1 5, (Ex. -12-

19 0 83 (emphasis added).) In that same pleading, Lichtenstein touted the myriad benefits ESI reaped from the bankruptcy filing: (Id. 36.) [A] bankruptcy filing is... the federally-sanctioned means by which a debtor preserves and protects its assets for the benefit of all creditors. Indeed, that was most certainly the case here, where ESI emerged from bankruptcy with nearly double the valuation it had at the time of filing, and with massive layoffs of its workforce of over 1 0,000 employees and other resultant waste thereby averted. And in opposing the lenders efforts to hold him personally liable under the Guaranties, Lichtenstein admitted the following: [I] determined that a voluntary bankruptcy petition was the only way to preserve and maximize the value of ESI for its creditors and to avoid massive operational layoffs to its workforce of over 10,000 employees. Aware that [my]fiduciary duties left [me] no other choice, [I] authorized ESI tojilefor bankruptcy.... (Ex. K at 8 (emphasis added) (internal citation omitted); id. at 3 ( [T]he bankruptcy filing ensured that ESI preserved its assets and did not expose them to waste. The filing was thus consistent with... Lichtenstein s fiduciary duties. ).) These admissions, made with advice of counsel other than Wilikie Farr, are dispositive of Plaintiffs malpractice claim. But Plaintiffs are attempting an about-face: They brazenly assert that Lichtenstein did not owe the very fiduciary duty that he repeatedly previously judicially admitted and that they are thus estopped from now denying. (Ex. A 25.) The putative basis for this attempt to abandon Lichtenstein s prior swornjudicial admissions appears to be comprised ofthe following incomprehensible phrase: the Lenders had insisted on a bankruptcy remote architecture in structuring the loans. (Id.) This, Plaintiffs assert, exculpates Lichtenstein from any fiduciary obligation to file for bankruptcy for the protection of these very same creditors. (Id.) The Complaint provides no explanation of what this

20 architecture was, or how it could eliminate the fiduciary duty Lichtenstein has previously acknowledged and is now estopped to deny, or why he has waited this long to recant what he previously swore to the Court. 2. The Facts Pled in the Complaint Fail to Demonstrate that Any Self- Interest Prevented Willkie Farr from Rendering Independent Legal Advice Underlying Plaintiffs cause of action for malpractice is the conclusory allegation that Willkie Farr s legal advice was motivated by [Defendants ] self-interest : In any contractual claim, Willkie itself would not face a lawsuit from the Lenders even if the breach of contract claim against Lichtenstein was ruled to be meritorious. By contrast, in a breach of fiduciary duty claim, even if Lichtenstein s conduct was defensible, Wilikie faced exposure to a lawsuit under an aiding and abetting claim if Wilikie advocated a legaijustification for Lichtenstein to avoid putting ESI into bankruptcy. Lichtenstein was facing a lawsuit regardless, and was dependent on Wilikie s advice on the comparable defenses of the potential claims against him. Wilikie, on the other hand, was focused on avoiding its own lawsuit and much preferred for Lichtenstein s exposure to be a contractual one. (Id. J ) This purported self-interest, according to the Complaint, tainted Wilikie Farr s legal advice to Lichtenstein. (Id. 2.) Plaintiffs far-fetched, circular speculation about Wilikie Farr s motivation based on the purported risk of third-party lawsuits has no basis under applicable law and is belied by the facts alleged in the Complaint. First, the Complaint s allegation that Lichtenstein would have prevail[ed] in any action brought by ESI s creditors for breach of his fiduciary duties to ESI (id. 25) completely undercuts the fanciful notion that Willkie Farr was, or had reason to be, concerned that it would be exposed to aiding-and-abetting liability for Lichtenstein s breach of fiduciary duty. If, as Lichtenstein alleges, he would have prevailed in any such breach-of-fiduciary-duty -14-

21 action, then so, too, would Wilikie Farr, because if there is no breach of fiduciary duty claim, there can be no claim for aiding and abetting breach of fiduciary duty. OFSI Fund II, LLC v. Canadian Imperial Bank ofcommerce, 82 A.D.3d 537, 540 (1st Dep t 201 1). Second, [i]t is well settled that attorneys are immunized from liability [to third parties] under the shield afforded attorneys in advising their clients, even when such advice is erroneous, in the absence of fraud, collusion, malice or bad faith. Pecile v. Titan Capital Grp., LLC, 96 A.D.3d 543, 544 (1st Dep t 2012) (citation omitted). Attorneys enjoy such immunity because public policy demands that attorneys, in the exercise oftheir proper functions as such, shall not be civilly liable for their acts when performed in good faith and for the honest purpose ofprotecting the interests oftheir clients. Art Capital Grp., LLC v. Neuhaus, 70 A.D.3d 605, 606 (1st Dep t 2010) (dismissing third party s aiding and abetting breach of fiduciary duty causes of action against an attorney). Even assuming Willkie Farr s advice were erroneous which it was not the Complaint does not allege that Willkie Farr engaged in or would have engaged in fraud, collusion, malice, or bad faith with respect to a third party in connection with whatever advice it gave Lichtenstein. (See Ex. A 25.) Thus, the Complaint fails to allege that Willkie Farr had any basis to fear liability for aiding and abetting anyone s breach of fiduciary duty. Third, under the law ofdelaware, the state ofesi s incorporation, ESI s creditors could not assert a direct claim in their own name against Lichtenstein for breach of fiduciary duty or against Willkie Farr for aiding and abetting Lichtenstein s breach. Any such claims would belong to ESI itself and could be asserted only derivatively for the benefit of the corporation. See Gheewalla, 930 A.2d at In such a derivative action, the misconduct of the corporation s officer or director (that is, Lichtenstein) would be imputed to the corporation

22 As a result, a claim against a third party such as Wilikie Farr for aiding and abetting that breach would be barred by the doctrine of in pan delicto. In re Am. mt 1 Grp., Inc. Consolidated Derivative Litig., 976 A.2d 872, 883 (Del. Ch. 2009) (dismissing as barred by the doctrine of in pan delicto claims brought derivatively by stockholders against third parties for aiding and abetting officers breach of fiduciary duty); Official Comm. ofunsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340, 344 (3d Cir. 2001) (affirming dismissal ofaiding and abetting breach of fiduciary duty claim against third party because the [Creditors ] Committee, standing in the shoes ofthe debtors, was inpari delicto with the third parties it [was] suing ). Fourth, the Complaint admits that Willkie Farr s legal advice to Lichtenstein regarding his fiduciary duties to ESI was identical to the legal advice he received from Weil Gotshal on this same issue (Ex. A 21 (faulting Willkie Farr because it did not challenge Weil s advice)). Yet the Complaint does not include any allegation that any purported selfinterest or other allegedly improper motivation tainted Weil Gotshal in giving its advice to ESI. (See id. J 21, 30.) The admission that a non-tainted law firm previously gave the same advice that Wilikie Farr is alleged to have embraced demonstrates the legal deficiency of the conclusory assertion that self-interest tainted Willkie Farr s advice. And given that legal malpractice necessarily involves a departure from the standard of care that a competent lawyer would have applied, see McCoy v. Feinman, 99 N.Y.2d 295, (2002), it is difficult to understand how it could have been malpractice for Willkie Farr to embrace the advice of Weil Gotshal, which is widely regarded as a if not the preeminent bankruptcy firm in New York, if not the nation. -16-

23 B. The Legal Malpractice Cause of Action Is Deficient Because Plaintiffs Cannot, as a Matter of Law, Demonstrate that Defendants Purported Malpractice Caused the Damages Alleged in the Complaint New York law requires a plaintiff asserting a cause of action for legal malpractice to allege that butfor the defendant s alleged malpractice the plaintiff would not have sustained some actual ascertainable damages. Pellegrino v. File, 291 A.D.2d 60, (1st Dep t 2002). A plaintiff s failure to plead such but-for causation requires dismissal regardless of whether negligence is adequately pled. Id. A complaint does not adequately allege proximate causation merely by laying out a hypothetical and speculative chain of events, because such conjecture is incapable ofproof. Phillips-Smith Specialty Retail Grp. II, L.P. v. Parker Chapin Flattau & Klimpl, L.L.P., 265 A.D.2d 208, 210 (1st Dep t 1999). 1. The Allegation That, Absent Willkie Farr s Legal Advice, The Guarantors Would Not have Incurred Liability Under the Guaranties Is Fatally Undermined by Facts Admitted in the Complaint In an attempt to plead causation, the Complaint alleges that [b]y following Willkie s insistence that he place ESI into bankruptcy, Lichtenstein triggered $100,000,000 in liabilities under certain personal [Guaranties] he had provided to ESI s lenders and thus suffered over $ 1 04,000,000 in out-of-pocket damages. (Ex. A f 2, 4.) But there were multiple triggers of liability under the Guaranties. It is therefore not enough to allege that the June 15 filing triggered liability. The Complaint must also allege that, in the absence of such a filing, liability would not have been triggered otherwise. The Complaint does just the opposite. It admits that two possible scenarios existed had ESI not voluntarily filed for bankruptcy on June 1 5 : either ESI s creditors would have filed an involuntary bankruptcy petition against ESI, or ESI would have delay[ed] the filing of a voluntary petition. (Id. 23.) Plaintiffs fail to allege that Lichtenstein would have avoided liability under the Guaranties under either scenario. -17-

24 In one alternative scenario posited by Plaintiffs that ESI s creditors would have filed an involuntary bankruptcy petition Lichtenstein clearly faced the prospect of $100 million in personal liability under the Guaranties. (Exs. B-C (Loan Agreements 9.4(a); Guaranties 1.2).) The filing of an involuntary petition may well have resulted in either (a) an answer consenting to the involuntary petition or (b) ESI filing a voluntary petition in order to moot the involuntary petition. See Fed. R. Bankr. P. 1011; 11 U.S.C Were ESI to have consented to the involuntary petition or filed a voluntary petition in response, liability under the Guaranties would have been triggered because the Guaranties make it a bad boy act to fil[e] an answer consenting to or otherwise acquiescing in or joining in any involuntary petition or to fil[e] a voluntary petition. (Exs. B-C (Loan Agreements 9.4(a); Guaranties 1.2).) The Complaint simply does not, as it must, plead facts demonstrating that an involuntary bankruptcy of ESI would (or even could) have proceeded in a manner that would have avoided liability under the Guaranties. See Pellegrino, 291 A.D.2d at 63 (dismissing legal malpractice cause of action where the plaintiff did not offer prima facie proof that he would not have sustained some actual ascertainable damages absent the alleged malpractice). Rather, Plaintiffs claim is purely speculative and, therefore, legally insufficient under New York law. See Phillips-Smith, 265 A.D.2d at 210 ( Nor can plaintiffs show that defendants actions were a proximate cause of any loss to them, since the hypothetical course of events on which any determination of damages would have to be based... constitutes a chain of gross speculations on future events, which is incapable ofproof. ) (citation and internal quotation marks omitted). In other words, because there is no way to know whether the advice not given that is, that Lichtenstein purportedly was not under a fiduciary obligation to have ESI file a voluntary bankruptcy petition (Ex. A 25) would have altered Lichtenstein s underlying liability

25 under the Guaranties, any effect of such lack of advice is purely speculative and cannot support a legal malpractice claim. AmBase, 8 N.Y.3d at 436 (citations and internal quotation marks omitted). The other alternative scenario mentioned in the Complaint that Lichtenstein may have delay[ed] a bankruptcy filing by ESI (Ex. A 23) likewise fails to demonstrate a path to avoiding liability under the Guaranties. A bankruptcy filing by ESI constituted a bad boy act under the Guaranties, regardless of when it occurred. (Exs. B-C (Loan Agreements 9.4(a); Guaranties 1.2).) A mere delay in filing would have not prevented the triggering of the Guaranties. (See id.); G & MRealry, L.P. v Masyr, 96 A.D.3d 689, 690 (1st Dep t 2012) (malpractice cause of action deficient as a matter of law where the plaintiff would have incur[red] [the] additional fees claimed as damages regardless of defendants alleged negligence ). Even if the Complaint could surmount these obstacles, its theory of causation is barred by another deficiency. The Complaint is premised on a chain of conjectures that cannot be proven: If (a) Lichtenstein had refused to place ESI into bankruptcy on June 1 5, 2009, and (b) Lichtenstein continued thereafter to refuse to place ESI into bankruptcy, and (c) Lichtenstein somehow succeeded in avoiding liability under the Guaranties based on other triggers, then (d) he would also have avoided sustaining losses in excess of $ 1 00 million, the amount of his guaranty liability. But this final conjecture is pure speculation. The liability that he faced in a breach-of-fiduciary-duty action, in contrast to one brought to enforce the Guaranties, was uncapped and thus could have exceeded $1 00 million. Lichtenstein has admitted that a voluntary bankruptcy petition was the only way to preserve and maximize the value of ESI for its creditors and to avoid massive operational layoffs to its workforce of over 1 0,000 employees. -19-

26 (Ex. K at 8.) And the Complaint does not explain how Lichtenstein would have avoided liability on a breach-of-fiduciary-duty claim to at least the mezzanine lenders for the $3.3 billion in debt they held, had Lichtenstein not authorized a bankruptcy filing. The Complaint s inherently speculative ipse dixit that Lichtenstein would ultimately [have] prevail[ed] in any breach-of-fiduciary-duty action (Ex. A 25) does not supply the causation that must be demonstrated in the Complaint. See AmBase, 8 N.Y.3dat 436 (dismissing malpractice claim where there is no way to know whether different advice would have produced a different result); Pellegrino, 291 A.D.2d at 63. Because there is no way to prove that different advice would have produced a better result for Plaintiffs, the Complaint is deficient and requires dismissal. 2. Lichtenstein Admits that ESI s Inability to Pursue Its Pre-Arranged Plan of Reorganization and Request to Use Cash Collateral Not Willkie Farr s Legal Advice Proximately Caused the Guarantors Alleged Damages A plaintiff also fails to plead proximate causation sufficiently where he has admitted the existence of intervening acts or failures that break the chain of causation. Pyne v. Block & Assocs., 305 A.D.2d 213, 213 (1st Dep t 2003) (complaint properly dismissed where the proximate cause of any damages sustained by plaintiff was not the alleged malpractice of defendants but an intervening and superseding failure by a third-party); Alden v. Brindisi, 91 A.D.3d , (4th Dep t ) (complaint failed to state cause of action for legal malpractice where the proximate cause ofplaintiffs damages was [an] intervening and superseding failure on the part ofthe plaintiff) (citation and internal quotation marks omitted). According to the Complaint, ESI filed for bankruptcy [b]ased on the advice of [Wilikie Farr]. (Ex. A 36.) But it is clear that what caused the loss under the Guaranties was not that filing, but rather the failure of the plan with certain Certificate Holders to escape liability

27 and get reimbursed for costs pursuant to the Term Sheet. (Ex. E at Ex. C.) Had that plan gone forward, the Guarantors would have been indemnified. (Id. at 7-9.) Wilikie Farr is not alleged to have provided any advice or to have had anything to do with that plan or its failure. Accordingly, Wilikie Farr s advice was not the proximate cause ofthe damages alleged in Count I ofthe Complaint. See Pyne, 305 A.D.2d at 213; Alden, 91 A.D.3dat II. COUNT II FAILS TO STATE A CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTY A. Count II (Breach of Fiduciary Duty) Should Be Dismissed Because It Is Redundant of Count I (Legal Malpractice) A cause of action for breach of fiduciary duty should be dismissed where it is redundant of a cause of action for legal malpractice, i. e., if they arise from the same allegations and seek identical relief. Sun Graphics Corp. v. Levy, Davis & Maher, LLP,94 A.D.3d 669, 669 (1st Dep t 2012). Count II is based on the very same alleged wrongdoing by Defendants Willkie Farr, Abrams, and Feldman as the cause of action for legal malpractice, and it seeks to recover the same alleged damages. (See Ex. A J & Prayer for Relief (2).) B. Count II (Breach of Fiduciary Duty) Fails as a Matter of Law for the Same Reasons as Count I (Legal Malpractice) The elements of a cause of action for breach of fiduciary duty arising out of an attorney s performance are identical to those for legal malpractice. Weil, Gotshal & Manges, LLP v. Fashion Boutique, 10 A.D.3d 267, (1st Dep t 2004). The Complaint thus fails to state a cause of action for breach of fiduciary duty for the same reasons that it fails to state a cause of action for malpractice. -21-

28 III. COUNT III FAILS TO STATE A CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTY Count III alleges that Defendants breached their fiduciary duties to Plaintiffs because of their representation of Bank of America in the Guaranty Actions. Plaintiffs seek to recover as damages the attorneys fees that Lichtenstein allegedly incurred in moving to disqualify Wilikie Farr. (Ex. A J ) The First Department prohibits litigants from commencing a new, plenary action to recover attorney s fees incurred in litigating a defendant s disqualification because [t]he request for fees, if recoverable, should have been raised in the proceeding in which the disqualification occurred. Estate ofsteinberg v. Harmon, 259 A.D.2d 3 1 8, (1st Dep t 1 999). Here, Lichtenstein, like the plaintiff in Steinberg, expressly asked the Court to award him such relief in the prior action. (Ex. L at 2; Ex. P at 3.) As in Steinberg, 259 A.D.2d at 3 1 8, the Court did not award that relief in deciding the motion to disqualify. (Exs. M-N.) To the extent that the Guarantors believed the Court erred in not awarding them that relief, their only remedies were to move for reargument or to appeal. Because they elected to do neither, this Court s denial of the relief sought is resjudicata and precludes Plaintiffs from using the Complaint to mount an improper collateral attack on the Court s prior ruling. See In re Hunter, 4 N.Y.3d 260, 269 (2005). IV. COUNT IV FAILS TO STATE A CAUSE OF ACTION FOR UNJUST ENRICHMENT Count IV alleges that Defendants were unjustly enriched by the fees and costs paid by [Lichtenstein] and by any fees and costs paid by [Bank of America] in the Guaranty Actions and seeks to recover those sums as damages. (Ex. A 68 & Prayer for Relief (4).)

29 A. Plaintiffs Lack Standing to Sue for Unjust Enrichment Based on Attorneys Fees and Costs Paid to Willkie Farr By Bank of America A plaintiff lacks standing to bring an unjust enrichment claim where that plaintiff did not bestow[]... on defendants the benefit sought to be disgorged. Aymes v. Gateway Demolition Inc., 30 A.D.3d 196, 197 (1st Dep t 2006); Wiener v. Lazard Frères & Co., 241 A.D.2d 1 14, 121 (1st Dep t 1998) (same). Here, the Complaint alleges that Defendants were unjustly enriched in part by any fees and costs paid by [Bank of America] as part of defendants breaches of fiduciary duties. (Ex. A 68.) As damages, the Complaint seeks to have the fees and costspaid by Bank ofamerica to Willkie Farr disgorged by Defendants andpaid to Plaintiffs. (Id. J 70 & Prayer for Relief (4).) Because Plaintiffs did not bestow those fees on Defendants, they lack standing to sue for unjust enrichment to recover them. Aymes, 30 A.D.3d at 1 97; Wiener, 241 A.D.2d at 121 (unjust enrichment cause of action seeking to disgorge fees paid to defendants by a third party properly dismissed because such fees cannot be said to be benefits bestowed on defendants for which plaintiffs should have been compensated or to which plaintiffs were entitled ). B. The Complaint Fails To State A Cause Of Action For Unjust Enrichment Based On Attorneys Fees and Costs Paid to Willkie Farr By Plaintiffs 1. Count IV (Unjust Enrichment) Should Be Dismissed Because It Is Duplicative of Count I (Legal Malpractice) An unjust enrichment cause of action must be dismissed where it is merely duplicative of the legal malpractice cause of action. Town of Wailkill v. Rosenstein, 40 A.D.3d 972, 974 (2d Dep t 2007); First Cent. Say. Bankv. Meridian Res. Cap., 35 Misc. 3d 1206(A) (Table), 2012 WL , at *9 (Sup. Ct. Nassau Cnty. 2012) (granting attorney-defendants