Lanahan Steever & Anderson, the successor to what was once Sonoma County's largest law firm, has been hit with lawsuits that contend it owes millions of dollars to its creditors.
The doors to the firm's third-floor suite in downtown Santa Rosa have been locked for about a week.
The company, known for years as Lanahan & Reilley, once had 65 lawyers and regional offices in San Francisco, San Jose and Sacramento. In December, it moved out of its flagship building on Bicentennial Way and today has six attorneys and three staff, said Scott Steever, one of the firm's majority shareholders.
He insisted Friday the company will remain open for business.
"I have way too much invested in it in time and resources," he said.
Steever said he has been battling a serious health issue that prevented his daily involvement in the firm since last November, but "I'm getting better."
The firm will reopen shortly, though not necessarily at its current B Street offices, he said.
The firm, which was founded in 1997 and developed a reputation as one of the most well-connected law firms in Sonoma County, changed its name in 2010 after founders Daniel J. Lanahan and Martin Reilley departed, though they continued to hold a financial stake in the firm. The firm's major shareholders now are Steever and Robert L. Anderson.
Anderson could not be reached for comment Friday.
In May, Lanahan Steever & Anderson and nine partners, including some from its Lanahan & Reilley days, were sued by Wells Fargo & Co. The bank is seeking $4.29 million, plus ongoing interest and attorneys fees.
A second creditor, GE Capitol Information Technology Solutions, filed suit against the firm in May claiming it was owed $112,000 for image management services and equipment.
The Wells Fargo debt comes from an October 2006 line of credit and three subsequent loans that total $3 million in principal.
Among the defendants are founders Lanahan and Reilley. Reilley couldn't be reached for comment Friday, but Lanahan said the debts were accrued as the firm represented Central Valley dairy farmers in a case alleging fraud by the owners of a dairy co-op.
The firm won a judgment in excess of $22 million in 2008, according to news accounts. But Lanahan said an appellate court reversed the verdict and the firm ended up collecting nothing after spending more than $4 million on litigation.
"Had we collected that verdict, we wouldn't be talking today," Lanahan said.
The firm once counted among its attorneys state Senator Noreen Evans, Sonoma County Superior Court Judge Gary Nadler, former Rohnert Park City Councilman Tim Smith and former Congressman Doug Bosco.
In the early years, Lanahan wanted his company to become the preeminent law firm for the telecom equipment startups that ignited the local economy in the late 1990s, Bosco said Friday. Besides his law practice, Lanahan had brought together investors who backed some of the up-and-coming tech businesses.
But a number of those companies moved or shut their doors in the dot-com bust in the early 2000s.
"The decline of the telecom industry was the beginning of the end for Lanahan & Reilley," Bosco said.
The Wells Fargo suit doesn't name Steever among the defendants. He was a guarantor on at least one of the loans for up to $300,000, according to court documents, but he filed personal bankruptcy in December and his business debts were subsequently discharged, he said.
In the bankruptcy case, Steever listed nearly $12.9 million in debts, including $3.9 million in "business expense" to Wells Fargo.
He listed another $6.7 million to Midland Loan Services of Overland Park, Kan., which he said Friday was designed to protect his family from any potential claims for money owed on the firm's former Bicentennial Way headquarters. Steever said neither he nor the law firm owned any portion of the building.
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