Former San Antonio attorney Christopher Pettit, left, walks with bankruptcy lawyer Michael G. Colvard to meet with creditors in July. A bankruptcy judge this week ordered Colvard’s firm to turn over payments it received from Pettit because some of the money belonged to Pettit’s clients.A San Antonio law firm has suffered a black eye over its representation of Chris Pettit in litigation and his massive bankruptcies.
Gargotta determined Martin & Drought failed to investigate the source of payments it received from Pettit despite knowing he had been accused of using client money held in trust for his own benefit.Pettit’s lawyers want to drop him as a client after being paid with money allegedly stolen “If ever there were a case where a reasonable lawyer should question the source of his clients’ funds, it is these cases,” Gargotta said in his ruling. “M&D knew former clients accused Pettit of using funds he held in trust for the clients ‘for his benefit and purpose.’”
Martin & Drought disagrees with the court’s findings and is considering an appeal, Colvard said in an email.Colvard and his firm no longer represents Pettit. They moved to withdraw from the bankruptcy cases in August after finding out they had been paid with money that belonged to Pettit’s former clients.San Antonio lawyer faces multiple lawsuits for allegedly stealing millions from clients
In court Wednesday, Colvard said his firm has an agreement with the Beyer Trust’s attorney that the money should go to the trust — subject to court approval. However, the Chapter 11 trustee may make a claim to the money. The judge could hear arguments Jan. 11 if a resolution isn’t reached. Gerald Drought, Martin & Drought’s chairman and president, defended Pettit and his firm in multiple lawsuits filed by clients alleging Pettit had stolen their money. Pettit and his firm entered into agreed judgments — admitting to various professional misconduct — that exceeded $35 million.Judge denies Chris Pettit’s release on bond, will remain jailed until his criminal trial
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