Remember when I said over a half dozen times “The End is Near” regarding Scot Strems? Or, when I said, “I promise this is my last word on the Strems saga?” (See Strems—The Final Chapter? )
Well… I was lying through my teeth!
After The Strems Law firm filed tens of thousands of suits over the course of many years, sometimes estimated to have 10,000 in the hopper at a time; after having his license suspended due, in part, to the inability to manage so many suits (and various other transgressions reported in these pages); and, after being disbarred by the Florida Supreme Court “based on his cumulative behavior” he is now filing one more lawsuit. This is the last one, I promise.
On March 22, 2023, he filed suit against The Property Advocates, P.A. previously the Strems Law Firm (See Note #1 below). Strems is suing its current President, Hunter Patterson, to enforce the payment of a $40 million note signed when it repurchased Strems’ 400,000 shares on July 9, 2020. Concomitant with the suit Strems also filed an emergency motion for the appointment of a receiver for Property Advocates, basically alleging it is bankrupt.
A week later, on March 29, 2023, The Property Advocates P.A. and Hunter Patterson filed a response in opposition to the motion to appoint a receiver. To which Strems has also responded.
Strems, of course, was 100% owner of the original Strems Law Firm based in Coral Gables. The following bullets elucidate selected balance sheet items at the time of the Florida Bars original petition to disbar.
- In 2019, The Strems Law Firm had net income of $18,180,768.75.
- In 2020, The Strems Law Firm had a book value of $20,717,463.73.
- Between July 9, 2019, and July 9, 2020, when Strems sold his shares back to the firm, his distributions from the firm totaled $21,912,941.66.
These current filings rather succinctly summarize events in June and July of 2020. I’ve written about many of them herein under the series titled “Collapse of an Evil Empire.” The following chronology, taken from the current filings, could add a new financial perspective to my past articles.
- In June 2020, The Florida Bar was actively investigating Scot Strems and his firm.
- On June 5, 2020, The Florida Bar filed a petition with the Florida Supreme Court for an emergency suspension of Strems license to practice law citing “great public harm.”
- On June 8, 2020, Scot Strems withdrew $9,765,728.53 from the law firm’s bank accounts.
- On June 9, 2020, the Florida Supreme Court granted the Bars motion and gave Scot Strems 30 days to wind up his practice of law.
- On June 25, 2020, The Valuation Group, Inc. valued the law firm at $43,860,000. (While it’s not clear from the filings, the report, which was based on information provided by the firm, included a balance sheet which didn’t appear to reflect the cash withdrawal of $9.8 million on June 8th.)
- On July 1, 2020, the name of the firm was changed to The Property Advocates.
- On July 9, 2020, the law firm redeemed Strems 100% interest in the firm for a note promising to pay him $40 million over the next ten years. ($2 million every December and $2 million every June). The shares of stock were held in escrow to secure the payment of the note.
- On July 9, 2020, the firm issued 4,000 shares to each one of the three new owners of the firm: Hunter Patterson, Christopher Narchet, and Orlando Romero. (It was not clear how much, if anything, the three new owners, all attorneys at the firm, paid for those shares.)
According to the current court filings, after the sale and prior to December 31, 2022, the following occurred:
- Scot Strems was paid $4,850,000 on his Note. This was $5,150,000 less than the payments required by the Note, but The Property Advocates claim that he agreed to the smaller payments because he always assumed he wouldn’t be disbarred and would eventually get the shares back. That possibility disappeared when the Florida Supreme Court disbarred Scot Strems indefinitely on December 22, 2022. After that decision, he demanded payment in full according to The Property Advocates. Strems argues he never agreed to the reduced payments. (See NOTE #2 below)
- Hunter Patterson received distributions of $4,796,000 plus an annual salary of $820,357.52 in 2021.
- Christopher Narchet received distributions of $4,796,000 plus an annual salary ($192,050.41 in 2021)
- Orlando Romero received distributions of $1,320,000. Mr. Romero’s widow received additional money from the firm.
I have no idea when the Judge will rule on the motion to appoint a receiver. Attorneys at, and for, The Property Advocates argue a receiver is unnecessary because the firm is solvent.
Likely there’ll be more filings, more back-and-forth, more to report and lots of money at stake. (See NOTE#3 below)
However, this is “My Final and Absolute Last Word” on the Strems saga. I promise.
NOTE #1: The Property Advocates was a subject of a previous blog regarding the Bars attempts to find Scot Strems in contempt of court for violating his suspension by continuing to pursue the practice of law; See Strems Not Guilty of Contempt.
NOTE #2: The Complaint filed by Strems indicates he may not have possession of the original Note, as follows…
- Plaintiff does not have the original of the Note but has standing to reestablish the Note pursuant to Florida Statutes § 673.309, and is, therefore, entitled to enforce the Note. That is: (i) Plaintiff was entitled to enforce the Note when it lost possession thereof; (ii)_ Plaintiff’s loss of possession of the Note was not the result of a transfer by Plaintiff or a lawful seizure of the Note; and (iii) Plaintiff cannot reasonably obtain possession of the Note because its whereabouts cannot be determined and/or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
- Plaintiff attempted to secure the original of the Note prior to the filing of this action, which he understood was in possession of William Kalish, Esq, the attorney that prepared the Note and other transaction documents described herein, or the Escrow Agent as that term is defined below, or Johnsons Pope Bokor Ruppel & Burns, LLP, the law firm at which Mr. Kalish worked at the time, and neither of them were able to locate the original of the Note. Plaintiff was in possession of a copy of the executed Note, and can confirm that the Note was actually executed on behalf of TPA and has not been repaid.
NOTE #3: For a compendium of every article on this blogsite regarding Strems (except this one) and the source materials for each, see my online library here.
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