Good Morning
Good Morning
Long IslandSuffolk

Ex-Gov. Weld sues NYC firm for $5 million

Former Massachusetts Gov. William Weld is suing the Manhattan equity firm where he once worked for $5 million in legal fees and expenses related to the failure of an obscure Kentucky college in which the investment group had a stake.

The lawsuit states that Weld - born in Smithtown and now a part-time Bellport resident - ran up $5 million in legal fees and expenses related to his attempts to keep the financially troubled Decker College of Louisville, Ky., afloat.

Weld's attorney, John Brickman of Great Neck, filed the lawsuit Tuesday in State Supreme Court in Riverhead against Leeds Weld Equity Partners IV Lp, of Manhattan.

Thursday, Brickman would only say, "I feel it would be inappropriate to tell you [about the lawsuit] until I have my client's permission to talk."

Weld, the Republican governor of Massachusetts from 1991 to 1997, ran a short campaign for governor of New York in 2006 but withdrew after questions arose about Decker College.

Leeds Weld took a 20 percent stake in Decker in 2002, the lawsuit states, and as a principal in the firm, Weld took on an additional role as chief executive of the vocational school. Weld says after assuming control at Decker in 2005, he discovered complaints filed with the Kentucky Better Business Bureau about alleged improper business practices at the school before his arrival.

In June 2005, federal education officials changed the payment method by which Decker received tuition reimbursements from the government. As a result, Decker experienced cash-flow problems.

At that point, the lawsuit states, Weld needed to guarantee a line of credit for the school. He personally guaranteed a $3 million loan to Decker and began racking up legal expenses. But the school continued to struggle financially. Decker declared bankruptcy in October 2005.

Weld claims Leeds has not paid him money the firm owes him related to the financial failure of Decker.

Among those Weld recruited to Leeds Weld, the lawsuit says, were former New York City Mayor Rudy Giuliani; Lamar Alexander, education secretary to President George H.W. Bush; and Thomas McLarty, White House chief of staff under President Bill Clinton.

If the case goes to trial, a parade of political heavyweights could be called to testify.

Weld and the Leeds group, which has dropped Weld's name, did not return telephone calls for comment.

Weld now is an attorney at McDermott Will & Emery in Manhattan.

Latest Long Island News