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Accounting firm embroiled in costly business dispute

Individuals and entities all across New Jersey rely on the information they receive from experts. Whether they seek the advice of doctors, lawyers or business strategists, they expect that through educational and professional experiences their experts have the knowledge and abilities to guide them through important decisions. When such experts fail to meet the standards of duty established by their professions they are often investigated for engaging in professional malpractice.

A judge recently decided that a major American accounting firm, PricewaterhouseCoopers, must go to court to defend accusations made against it for causing another business to fail. MF Global Holdings, an entity affiliated with former New Jersey Gov. Jon Corzine, dissolved more than a decade ago. The failed company claims that it relied on advice provided by PricewaterhouseCoopers to its ultimate detriment.

PricewaterhouseCoopers attempted to avoid going to court on the malpractice claim but based on the judge's decision it will have to resolve this business dispute in court. MF Global Holdings has asked the court to award it $1 billion in damages for PricewaterhouseCoopers' professional malpractice. It has also requested nearly $11 million based on what the accounting firm unjustly earned from advising the failed enterprise.

Business litigation of this form can be very complicated. The judge who ruled that PricewaterhouseCoopers must go to court acknowledged those difficulties when he noted that other causes could have also led to MF Global Holdings' downfall. However, since uncertainty exists as to why the enterprise failed, business litigation is an appropriate pursuit to get to the truth of the conflict.

Every day New Jersey businesses rely on the information they receive from their advisors. Though not all bad advice is actionable, some poorly offered guidance can rise to the level of professional malpractice. Companies that have suffered due to the poor work of trusted advisors may have claims like those of MF Global Holdings to pursue negligence and malpractice lawsuits.

Source: Courthouse News Service, "MF Global's $1 Billion Claim Advances," Nick Divito, Aug. 28, 2014

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