Willkie Farr & Gallagher Slams Ex-Client’s $735M Fraud Complaint as ‘Harassment’

Willkie Farr & Gallagher has fired back forcefully at a lawsuit accusing the firm of aiding and abetting a $735 million fraud scheme, labeling the complaint as nothing more than a “harassment” tactic by a disgruntled former client. The high-profile dispute stems from Willkie’s representation of Franchise Group Inc. (FRG) during its 2023 take-private transaction, and the firm’s response came in court filings around early March 2026.

The underlying lawsuit was filed in January 2026 in Manhattan Supreme Court by BRC Group Holdings (formerly known as B. Riley Financial), along with co-plaintiffs. BRC alleges that Willkie, which advised FRG and its founder Brian Kahn, conspired with Kahn to perpetrate a “sophisticated fraud” that secured over $735 million in financing for the $2.8 billion deal to take FRG private. According to the complaint, Kahn used the funds partly to pay off massive personal debts amid investigations into a separate hedge fund fraud (to which he later pleaded guilty in December 2025). BRC claims it lost its entire investment due to the alleged misconduct, accusing Willkie of breaching fiduciary duties, aiding fraud, and failing to disclose conflicts—particularly for representing “diametrically opposed” parties in the transaction.

Willkie, represented by Davis Polk & Wardwell, countered aggressively in its response. The firm argued that the suit is baseless and filed solely to harass and pressure Willkie, describing it as an improper attempt to shift blame for BRC’s investment losses. Willkie emphasized that it provided standard legal services to FRG and Kahn in good faith, with no evidence of conspiracy or fraud facilitation. The firm sought dismissal or other relief, framing the claims as meritless and potentially sanctionable.

This back-and-forth highlights tensions in big-ticket corporate deals, where former clients sometimes turn on advisors when outcomes sour. The case involves complex allegations of fraud, fiduciary breaches, and conflicts of interest—common flashpoints in high-stakes financing and M&A work. Kahn and his wife are also named defendants, with the suit seeking disgorgement of Willkie’s fees alongside damages.

Public and legal community reactions have been mixed. On platforms like LinkedIn and legal forums, some view it as a cautionary tale for law firms in conflicted or high-risk representations, while others see Willkie’s strong denial as standard defense strategy in such high-dollar claims. The matter remains in early litigation stages, with potential for motions to dismiss, discovery battles, or settlement talks ahead.

For U.S. readers—particularly in the legal, finance, and corporate sectors—this case underscores ongoing scrutiny of law firm ethics in major transactions and the risks of representing parties in distressed or investigative contexts. It could influence how firms handle disclosures and conflicts in future deals.

Here are some key images from coverage, including court filings, Willkie’s headquarters, and related legal graphics:

The dispute is ongoing in New York state court, with no final rulings yet. If you’re tracking Big Law litigation, corporate fraud claims, or want updates on similar cases, let me know!