PROVO — One of the largest personal injury law firms in the state is in the midst of an internal tug of war that could affect thousands of Utahns.
The law firm Gregory, Barton and Swapp — known for its "one call, that's all" advertisement tag line — is mired in more debt than the firm can repay, according to documents filed in 4th District Court in Provo.
That debt, the result of loans secured by the public face of the firm, Keith Barton, could impair the firm's ability to represent its clients, according to a petition filed by Buddy Gregory, a partner in the firm.
The firm represents about 2,000 clients with personal-injury claims and another 3,500 or so with product-liability claims against the makers of such drugs as fen-phen, Vioxx and ephedra. They also are retained for about 150 new cases every month.
According to Gregory's petition, Barton — Gregory's son-in-law — has sunk the firm in debt through a series of loans, using as collateral money that is projected to come from pending settlements.
Although the firm brings in more than $600,000 a month, some of Barton's loans may be in default or delinquent, says Gregory's petition. The firm has been forced to reduce staff, and there are concerns that its financial woes could hamper its ability to function and adequately represent clients, especially those with personal injury claims as result of automobile accidents.
Gregory and Barton, who are both 50 percent partners, are deadlocked over how to resolve the debt.
Gregory doesn't know when or why his son-in-law started taking out loans against the firm's assets, according to court documents. But he says the amounts owed "greatly exceed the firm's capacity to repay."
The firm has asked 4th District Court Judge Anthony Schofield to appoint a neutral party to help mediate the dispute. If they cannot reach a resolution, the partnership will be dissolved.
"Like any business, sometimes things get at loggerheads, and we need a neutral party to see where we're at," said Peggy Tomsic, an attorney representing Barton. "If we're not at loggerheads, let's patch things up and move on."
Tomsic downplayed the dispute between Barton and Gregory as internal feuding between business partners, and said it has not affected the firm's representation of its clients in any way.
She said the firm is not in debt. And some of the allegations made against Barton in the court documents are unproven, she said.
"We don't even know the extent of their disputes at this point. We just hope to get to the bottom of their disagreements," she said.
Gregory has filed a petition for the dissolution of the firm, but his attorney, Kenneth Yeates, said Gregory hopes it doesn't come to that.
"I wouldn't say they're in the midst of a meltdown," Yeates said. "We are taking preventative steps long before we reach the point of meltdown to make sure that doesn't happen."
But both Gregory and Craig Swapp, the chief executive officer, have asked the court to help "wind up and liquidate the affairs" of the firm.
If the firm does indeed split, the neutral part appointed by the court would help transfer clients to another firm, Gregory's petition says.
The firm has asked that Michael Zimmerman, former Utah Supreme Court Chief Justice, be appointed as mediator.
Gregory, Barton and Swapp is among the largest personal injury law firms in Utah, followed by Robert J. Debry and Siegfried and Jensen. The firm is known for its aggressive media campaign, which attracts 60 percent of its new clients.
E-mail: jhyde@desnews.com