Nut Butter

The Illinois Review Board has recommended disbarment of an attorney

Respondent was admitted to practice law in Illinois in 1978. After working at a law firm as a tax specialist for approximately ten years, he established his own law firm and worked as a solo practitioner with a focus on business law, tax law, and estate planning. He also owned and operated a business known as Futter’s Nut Butter, Inc., which closed in 2018. Respondent is retired from the practice of law. Respondent was previously disciplined in 2011 for charging excessive legal fees and was suspended for 30 days.

Misconduct

In 2017, Respondent handled the sale of two companies owned by Francis Ferrone and his brother, Donald Ferrone. The proceeds from the sale were deposited into Respondent’s client trust account, pursuant to a court order, and Respondent misappropriated $161,608 of those funds without authority, knowing that the funds belonged to the Ferrones.

In 2016, the court appointed Felicia Ferrone (“Felicia”) as the temporary guardian for the estate of her uncle, Francis Ferrone, who was suffering from dementia. Felicia was represented by an attorney in connection with the guardianship. In February 2017, the court granted permission to sell the Ferrones’ companies. Felicia’s attorney recommended hiring Respondent as legal counsel to handle the sale of the companies, and Felicia agreed.

Based on a petition filed by Felicia’s attorney, the court issued an order appointing Respondent to represent Francis Ferrone’s estate, as an attorney, in connection with the sale of the companies. Felicia and her attorney each testified that Respondent was hired as an attorney to represent Francis Ferrone’s estate in the sale of the companies. Respondent also testified that he represented the Ferrones in the sale of their companies. In order to sell the companies, Respondent provided legal services that included structuring the deal; preparing the sales contract; communicating with the purchaser’s attorney; negotiating the terms of the sale; researching the assignment of contractual rights; handling the closing; and paying the companies’ debts.

In 2017, the court issued an order directing that the proceeds from the sale of the companies be deposited into Respondent’s client trust account. Between June and August 2017, the sale proceeds were wired into Respondent’s client trust account.

After the companies were sold, a petition was filed with the court requesting that Respondent be paid legal fees totaling $25,593. In July 2017, the court issued an order authorizing that payment. Respondent withdrew those legal fees from the Ferrones’ funds, as authorized by the court.

Between September 2017 and April 2018, Respondent misappropriated $161,608 of the Ferrones’ sale proceeds, without authority, for his own benefit. He used the Ferrones’ funds to pay for personal expenses, which included payments for furniture, groceries, restaurants, and other personal items. Respondent also used the Ferrones’ funds to pay business expenses for Respondent’s law firm and for his company, Futter’s Nut Butter. Over a period of seven months, Respondent wrote 44 checks, withdrew cash on two occasions, and made two wire transfers.

In April 2018, the court issued an order directing that the proceeds from the sale be paid to the Ferrones. After the companies’ debts were paid, the Ferrones were owed $482,177. Respondent did not have funds to replace the money that he had misappropriated. Therefore, he obtained $180,000 from another client, Margaret Burke, which he used to replace the funds he had taken.

That transaction led to further misconduct findings.

Burke obtained the $180,000 through a line of credit, with interest, backed by securities that she owned, and she wired the money to Respondent on May 3, 2018. Respondent used the money from Burke to repay the $161,608 that he had misappropriated from the Ferrones.

Respondent testified that the money was a gift. He testified he told Burke that he was having financial difficulties and she offered to give him $180,000. Respondent testified that when she offered him the money, she told him not to worry about it, and they did not discuss repayment at the time. The Hearing Board rejected Respondent’s testimony.

Respondent did not repay the $180,000. Burke repeatedly asked him to repay the money, and he responded by giving her various excuses concerning why he could not immediately repay the funds. In August 2019, Burke sued Respondent to recover the funds. In 2021, after a bench trial in that case, the court found that Respondent had breached an oral agreement and had breached his fiduciary duty. The court ordered him to repay the $180,000, and to pay legal fees of $43,602. He did not pay any money to Burke, and he testified that he does not intend to pay any money to Burke. Instead, Respondent obtained a discharge of the debt in a bankruptcy proceeding.

(Mike Frisch)