Aspen Electronics Manufacturing has been making circuit boards and other electronic equipment here since 1993. (YouTube)
Unethical and incompetent attorneys reportedly turned a $19,000 dispute into a $1 million boondoggle that has now bankrupted a 30-year-old business in Westminster.
Court documents tell the tale of “a slow motion disaster,” in the words of one lawyer, as a small but profitable manufacturing company was bounced between attorneys for several years, losing money at every turn. The business has now hired new lawyers to sue prior lawyers and hired a bankruptcy lawyer to restructure its debts, including money owed to three law firms.
“Yet, tragically, none of this had to happen,” Aspen Electronics Manufacturing wrote Oct. 31.
Aspen has been making circuit boards and other electronic equipment here since 1993. It was founded by Giao Le, an engineer and Vietnamese immigrant who started Aspen to provide work and training to fellow Vietnamese immigrants. Employees own 49 percent of Aspen.
By 2021, the 60-something Le was looking to sell Aspen and retire. He signed a letter of intent in August of that year and hired the first of what would become a parade of law firms: Holzman Horner, a Washington, D.C. firm that vowed to handle the sale for $75,000 to $90,000.
Aspen’s current lawyers say that Holzman Horner’s contract with Aspen violated several ethical guidelines and amounted to usury. One provision reportedly stated that in the case of a legal dispute between the two, Aspen would have to pay Holzman Horner’s fees and costs if the firm won but the firm would not be required to do the same if Aspen came out ahead.
Holzman Horner represented the company for about one month, in Aspen’s recollection, during which time the sale fell through. It then billed $63,100, which Le considered unreasonable.
Enter Lawyer No. 2.
James Phillips, a business litigator in Denver since 2001 with a spotless disciplinary record, first advised Le in January 2022 that Aspen had a strong case if it wanted to challenge the invoice. But Phillips would need at least $50,000 to represent Aspen in the $63,100 dispute.
“For Mr. Le, it wasn’t a close call,” Aspen wrote in a recent lawsuit, “There was no sense in incurring a minimum of $50,000 in additional legal fees to fight over a $63,100 bill.”
So, Le’s company wrote a check for $63,100 to Holzman Horner, which cashed it — and sent another invoice. The firm wanted $19,000 to cover the supposed cost of an arbitration case it briefly opened while Le was talking with Phillips about whether to fight the first invoice.
This time, Phillips advised his client to fight. He wanted to escalate into litigation and argue the $63,100 that Aspen had already paid was unreasonable and should be returned.
“Mr. Phillips never looked back,” Aspen says now. “He proceeded to prosecute Aspen’s defense as a complicated, fact-intensive and factually dubious legal malpractice counterclaim.”
Phillips never argued in arbitration that Holzman Horner’s fee agreement was unethical and unenforceable, according to Aspen’s current lawyers, who believe it was. Instead, he argued that the firm should have worked quicker and therefore billed his client less.
In May 2022, Holzman Horner offered to settle if Aspen would pay it $165,000. Le, at Phillips’ urging, declined. The next year, it offered a $500,000 settlement and then a $380,000 one. Both were rejected. Finally, in September of this year, an arbitrator awarded $987,000 to Holzman Horner. Aspen had spent hundreds of thousands of dollars on the case and lost.
It was then, the company said, that “Mr. Phillips referred Aspen to a bankruptcy lawyer.”
Aspen Electronics Manufacturing filed for Chapter 11 on Nov. 1. It reported $1.8 million in assets and $2.7 million in debts. Holzman Horner’s judgment is by far its largest liability. Revenue there has slid from $7.3 million in 2022 and $6.1 million in 2023 to $3.5 million this year.
The day before it filed for bankruptcy, Aspen sued Phillips and his law firm in Denver District Court for professional negligence. It has also filed an attorney regulation complaint against Holzman Horner in Washington, D.C., accusing that firm of violating legal ethics.
Phillips and Holzman Horner did not return BusinessDen’s requests for comment.
The manufacturing firm’s future is unclear. Chapter 11 allows for a reorganization and is designed for companies that plan to remain in business. But its lawsuit against Phillips claims that “Aspen’s business won’t survive the fallout” of Holzman Horner’s judgment.
Three lawyers now represent three more: Christopher Montville and James Fogg of Haddon Morgan and Foreman in its case against Phillips, and the bankruptcy lawyer Jenny Fujii with Kutner Brinen Dickey Riley in Denver. They did not answer requests for comment.
Aspen Electronics Manufacturing has been making circuit boards and other electronic equipment here since 1993. (YouTube)
Unethical and incompetent attorneys reportedly turned a $19,000 dispute into a $1 million boondoggle that has now bankrupted a 30-year-old business in Westminster.
Court documents tell the tale of “a slow motion disaster,” in the words of one lawyer, as a small but profitable manufacturing company was bounced between attorneys for several years, losing money at every turn. The business has now hired new lawyers to sue prior lawyers and hired a bankruptcy lawyer to restructure its debts, including money owed to three law firms.
“Yet, tragically, none of this had to happen,” Aspen Electronics Manufacturing wrote Oct. 31.
Aspen has been making circuit boards and other electronic equipment here since 1993. It was founded by Giao Le, an engineer and Vietnamese immigrant who started Aspen to provide work and training to fellow Vietnamese immigrants. Employees own 49 percent of Aspen.
By 2021, the 60-something Le was looking to sell Aspen and retire. He signed a letter of intent in August of that year and hired the first of what would become a parade of law firms: Holzman Horner, a Washington, D.C. firm that vowed to handle the sale for $75,000 to $90,000.
Aspen’s current lawyers say that Holzman Horner’s contract with Aspen violated several ethical guidelines and amounted to usury. One provision reportedly stated that in the case of a legal dispute between the two, Aspen would have to pay Holzman Horner’s fees and costs if the firm won but the firm would not be required to do the same if Aspen came out ahead.
Holzman Horner represented the company for about one month, in Aspen’s recollection, during which time the sale fell through. It then billed $63,100, which Le considered unreasonable.
Enter Lawyer No. 2.
James Phillips, a business litigator in Denver since 2001 with a spotless disciplinary record, first advised Le in January 2022 that Aspen had a strong case if it wanted to challenge the invoice. But Phillips would need at least $50,000 to represent Aspen in the $63,100 dispute.
“For Mr. Le, it wasn’t a close call,” Aspen wrote in a recent lawsuit, “There was no sense in incurring a minimum of $50,000 in additional legal fees to fight over a $63,100 bill.”
So, Le’s company wrote a check for $63,100 to Holzman Horner, which cashed it — and sent another invoice. The firm wanted $19,000 to cover the supposed cost of an arbitration case it briefly opened while Le was talking with Phillips about whether to fight the first invoice.
This time, Phillips advised his client to fight. He wanted to escalate into litigation and argue the $63,100 that Aspen had already paid was unreasonable and should be returned.
“Mr. Phillips never looked back,” Aspen says now. “He proceeded to prosecute Aspen’s defense as a complicated, fact-intensive and factually dubious legal malpractice counterclaim.”
Phillips never argued in arbitration that Holzman Horner’s fee agreement was unethical and unenforceable, according to Aspen’s current lawyers, who believe it was. Instead, he argued that the firm should have worked quicker and therefore billed his client less.
In May 2022, Holzman Horner offered to settle if Aspen would pay it $165,000. Le, at Phillips’ urging, declined. The next year, it offered a $500,000 settlement and then a $380,000 one. Both were rejected. Finally, in September of this year, an arbitrator awarded $987,000 to Holzman Horner. Aspen had spent hundreds of thousands of dollars on the case and lost.
It was then, the company said, that “Mr. Phillips referred Aspen to a bankruptcy lawyer.”
Aspen Electronics Manufacturing filed for Chapter 11 on Nov. 1. It reported $1.8 million in assets and $2.7 million in debts. Holzman Horner’s judgment is by far its largest liability. Revenue there has slid from $7.3 million in 2022 and $6.1 million in 2023 to $3.5 million this year.
The day before it filed for bankruptcy, Aspen sued Phillips and his law firm in Denver District Court for professional negligence. It has also filed an attorney regulation complaint against Holzman Horner in Washington, D.C., accusing that firm of violating legal ethics.
Phillips and Holzman Horner did not return BusinessDen’s requests for comment.
The manufacturing firm’s future is unclear. Chapter 11 allows for a reorganization and is designed for companies that plan to remain in business. But its lawsuit against Phillips claims that “Aspen’s business won’t survive the fallout” of Holzman Horner’s judgment.
Three lawyers now represent three more: Christopher Montville and James Fogg of Haddon Morgan and Foreman in its case against Phillips, and the bankruptcy lawyer Jenny Fujii with Kutner Brinen Dickey Riley in Denver. They did not answer requests for comment.
