John O’Quinn has been as complex in death as he was in life. There are no simple answers or simple liquidation of his assets for his Estate, his foundation or even the Trustees who now run The O’Quinn Law Firm Trust; as rumors of cars being sold, employees leaving or being laid off sent many scrambling for answers. The Executor of the Estate, the board members of the John M. O’Quinn Foundation and even the Trustees for the Law Firm have been pretty mum over the last few weeks.
The Estate as all of you know, is being handled by a life long friend, T. Gerald Treece. Mr. Treece was of counsel to the O’Quinn Law Firm before O’Quinn’s death. Mr. Treece also is an assistant dean at Southwest School of Law, counsel to the president of the law school, and instructor at the law school as time permits which leaves him at the Law School for most of his time and less time at the firm’s office.
Beginning February 4 rampant rumor mills started over the weekend, some saying the Estate with problems, is planning selling the car collection that John O’Quinn made in his Will as a separate entity and not part of the Estate and the rush to get quotes on the record or find reliable information began.
Part of what you need to know about O’Quinn his firm and Texas is that since 2003 Texas has undergone major class action suits tort reform. Some have said it should have been called the O’Quinn – Nix Tort reform act of Texas. Prior to the extensive reform Texas was known as “the lawsuit capital of the world”, which made Texas not surprisingly, what the insurance companies consider;”Texas the worst jurisdiction in the nation”. In fact Texas ranked last among insurers willing to insure firms that could be subject to a huge lawsuit and Texas jurors were known to give HUGE settlements. “In 2003 the doctor-per-citizen ratio Texas ranked 49th out of 50 states.” Of the state’s 254 counties, more than 150 had no obstetrician in 2003, and more than 120 had no pediatrician.
Thus began the migration of huge tort cases were often paired up in Mississippi where the filing of these type of mass class actions suits were still money makers under their state laws.
You probably had noticed that John O’Quinn began to partner with attorneys out of state in these filings but O’Quinn also did something else. He turned his attention from huge personal injuries pay outs to other types like the penny-stock and then attacked some of the largest stock investment firms in New York. He also turned to lawsuits like the Overstock.com suit he was on his way for a mediation when that tragic accident happened. Just as the Overstock.com lawsuit, there are many pending lawsuits that owe Mr. O’Quinn’s Estate, O’Quinn’s share of the winnings, or the debts if that is the case.
Fortune magazine once dubbed John O’Quinn as the “lawyer from hell.”
Still, facing O’Quinn was “as difficult as anything I’ve ever experienced in 40 years as a lawyer,” Terry Scarborough said, describing an opponent who mercilessly probed for any weakness and exploited every advantage. “He had an unlimited pocketbook on top of the fact that he was gifted, smart and worked hard.” Scarborough had fought O’Quinn for ten years for the silicon implant case to reimburse the women in that class action suit. The Estate announced on Dec. 19, 2009 it would settle the suit for $46.5 million dollars to almost 3,500 former clients without further litigation.
Gerald Treece, the executor of O’Quinn’s estate, in a statement told the Houston Chronicle’s Mary Flood recently that some of the cars were being sold at auction to help pay the $45 million legal settlement over legal fees for breast-implant litigation that O’Quinn lost before his death.
Last week the word came that some of O’Quinn’s car collection of over 670 classic cars might be sold off in lots, the first two, was one on the March 13, 2010 of about 55 cars and another at the end of the month, March 26-28, of 150. More of the prized collections made RM the auctioneer and car collectors salivate There are persistent rumors that more will be sold in lots over the summer, RM has verified that the 150 cars to auctioned off on March 26-28 will be sold with conditions stating “no reserve” for those cars. Auto Week has confirmed that they might expect more of the cars to go to auction over the summer.
Car collectors in Houston are saddened they see the “world’s greatest car museum” fading fast. Ken Daugherty, an early consultant to O’Quinn’s car collection, has said, “The loss of O’Quinn’s proposed car museum is incalculable to Houston.” “It’s a tragedy that this happened,” said Ron Stein, a friend of O’Quinn’s who frequently gave tours of the collection on the lawyer’s behalf. “It was a world-class collection.” Treece and Stein both said a museum remains a possibility, noting that even after the planned sales, hundreds of classic cars will remain in the collection. Scrapping the museum plans “would be a big loss not just for the car collectors but for the city of Houston.” The facility would bring international attention to the city, Treece said.
The maintenance staff that takes care of O’Quinn’s car collection has been reduced to a skeleton crew, Darla Lexington, frequently described as O’Quinn’s soul mate and president of Classy Classic Cars LTD, first through her attorney over the weekend said several cars have already been auctioned off, much to her dismay.
Lexington’s attorney Jimmy Williamson says it’s a matter of economics. “The estate is on solid ground, but, of course, there are settlements out there. There are claims against the estate. There are debts, just like any person who has assets has debts and all of those have to be accommodated and dealt with in a responsible fashion. While it’s not to say a museum won’t happen, Williamson says it certainly won’t be on the scale they had hoped for. Williamson says Lexington is fully supportive of the executor’s efforts to keep the estate on solid footing.
At the first of this week, Ms. Lexington released her own statement saying; “John loved the cars and planned on building the world’s greatest car museum, his untimely death in the midst of the great recessions created a number of unforeseen issues for the estate, which the sale will help alleviate.”
There has been speculation that the number and quality of O’Quinn cars coming to market could cause a drop in overall collector car pricing of as much as 25 percent.
On February 4, 2010 another announcement was made in regards to property held by O’Quinn’s Estate. On the steps of the Texas State Capitol, the San Jacinto Battleground was named among seven sites (the only one in Harris County) to the list of 2010 Texas’ Most Endangered Historic Places. The selection was made by Preservation Texas, Inc., a statewide partner of the National Trust for Historic Preservation. Friends President Jan DeVault announced the launch of a $1 million statewide campaign to purchase and rehabilitate a 19-acre tract located outside the state-owned area, but within the battlefield. The Friends’ immediate goal is to raise $625,000 by June 1, 2010, to acquire this property, now owned by the estate of late Houston attorney John O’Quinn, to protect it from recently proposed development and industrial encroachment.
Upon John O’Quinn’s death everything concerning the law firm was moved into the O’Quinn Law Firm Trust with three co-trustees at the helm, Mr. Treece, C. David Towery and David L. Griffis.
To me “trustees” pretty much equals “bean counters” or better known as accountants with the task to get a stable bottom line and make hard decisions as to who stays and who goes.
I have been told by several who do not have the authority to speak on behalf of the firm or the Estate that since the first of the year about half of the lawyers and their support staff have left. Some who were in business on their own and merged with O’Quinn in the last decade have moved back into their own practices. Others have been laid off with the support staff laid off as well and “Severance Packages” as John O’Quinn had left the trustees of the firm’s trust to say who, how much and when. I believe there are a record number of lawyers without work already in Texas related to the recession, this will just increase those numbers.
The Will gives the trustees the sole power to “sell or otherwise dispose of all of the other assets of the Firm and make such employment decisions concerning any or all of the employees of the Firm including the payment of severance pay and make all decisions concerning any office or real property least obligations the Firm may have including the payment of sums to landlords to satisfy and/or compromise any outstanding obligations.” We know from a on the record comment by Mr. Neil McCabe to several sites that before the first of the year the Law Firm Trust, signed another five year contract on the office space. I have said before that makes sense because it could take 5 to 7 years to tidy up what is owed and to whom.
So what has happened in the last couple of weeks? I have been told by a source familiar with the firm that Don Clark had left the firm because he had been in the right place at the right time to be offered a job as a anti-terrorist consultant to a major import – export firm that uses the Houston Texas port. At the time we learned of this we had been asked not to share that and when people share things off of the record to us on any of the suits we are following we honored that. Although many times it has meant we lost the “exclusive” label or “First to Report”, however you build up good sources by keeping those promises and gaining the trust of a lot of people who will give you a look inside of a case, trial etc. After we confirm that on Topix the rumors that yes Mr. Clark had departed, we began to work our sources for on the record comments, and that can take days. We have now learn that Mr. Clark will remain with the Estate of O’Quinn working directly under Gerald Treece as a consultant during this transition time. I am sure if the firm ever needs his service he will do it as a independent consultant.
Those that have left the O’Quinn Law Firm since the first of the year as well as those familiar with the plans for the future of the Firm have stated we need to watch the firm for more surprising announcements as to what “new” turns the Firm will take over the next six months.
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February 10, 2010
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