By Casey Sullivan
Jan 8(Reuters) – Two former partners of the defunct Howrey law firm have accused Citibank of committing fraud in connection with a loan program that financed partners’ capital investments in the firm, court documents show.
Former Howrey partners Stephen O’Neal and David Buoncristiani said in court filings that Citibank hid Howrey’s financial woes while encouraging the partners to enroll in a loan program financing their capital in the flailing firm.
In a string of depositions, emails and financial documents filed in November in San Francisco Superior Court, O’Neal and Buoncristiani claimed that Citibank executives convinced them to sign up for the loan program, despite knowledge that Howrey’s financial situation was strained.
“I later found out that during this whole period of time … when I was being romanced by Citibank, that they had reason to believe — in fact, they knew — that Howrey was in default of material covenants, and they didn’t tell me that,” said O’Neal in a deposition.
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