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Holland & Knight Files Motion to Dismiss GWG Trustee’s Fraud Suit

June 4, 2025 Michelle Casady

This week, the law firm Holland & Knight and its partner Bill Banowsky asked U.S. Bankruptcy Judge Marvin Isgur to dismiss a bankruptcy trustee’s fraud lawsuit against them for failure to state a claim. 

In the 165-page motion filed Monday, the firm told the court the “threadbare complaint should be dismissed.” On Feb. 28, Michael I. Goldberg, the trustee appointed to recover funds for creditors in the GWG Holdings bankruptcy case, filed a 157-page complaint against the firm and Banowsky, seeking to recover nearly $150 million for the “knowing participation in a fraudulent looting scheme and associated criminal enterprise” that included Dallas-based financial services firm Beneficient and its founder and CEO Bradley Heppner. GWG is a Dallas-based financial services firm that sells bonds backed by life insurance policies. It filed its Chapter 11 bankruptcy petition in April 2022. 

Holland & Knight and Banowsky argued the trustee had obscured “the facts upon which it must rely for wrongdoing against defendants in this case.” 

“The trustee brought claims elsewhere against the ‘mastermind’ of wrongdoing — Brad Heppner — urging breach of fiduciary duty and fraudulent transfer in a distinct adversary proceeding, the settlement of which is now before the court,” the motion reads. “The Trustee also sues elsewhere GWG’s own contracting counterparts, appointed fiduciaries, and retained professionals for common-law breaches. All of these suits, including the tentatively settled, seek to recover on GWG’s behalf every dollar of actual damage sought from defendants here.” 

“But the trustee reserved its nuclear weapon, RICO, for a downstream lawyer who wrote a legal opinion neither to nor on behalf of GWG.” 

The trustee has accused Holland & Knight and Banowsky of colluding with Heppner to “fraudulently induce” GWG to invest $148.4 million to help BEN “stave off collapse” by repaying a senior lender. But the senior lender, according to the complaint, was actually a “front for Heppner,” and the money “flowing in-and-out f bank accounts of various Heppner-controlled intermediaries into an entity that had for two decades functioned as Heppner’s personal slush fund.” 

In April 2024, Goldberg filed suit against BEN, Heppner and other executives, accusing them of fraud and conspiracy. And in September 2024, he targeted Foley & Lardner in another lawsuit, alleging the firm GWG hired to advise a special committee guiding the company’s partnership with BEN had committed legal malpractice and breach of fiduciary duty. Judge Isgur sent that case to arbitration in February. 

In its motion to dismiss, Holland & Knight and Banowsky told the court the trustee has tried to “causally tether GWG’s poor 2017 investment decision and GWG’s poor 2018 contracting decisions to a February 2019 litigation opinion that the trustee acknowledges Banowsky did not write for GWG as a client, did not write to GWG as a recipient, did not write based on any independently-held fact, and did not write for the purpose of persuading or inducing GWG to make or continue making investments in BEN to avoid ‘further value destruction.’”

“When the court completes its review to page 157 (eliminating speculation, conclusions, innuendo and hypotheticals) the court will have considered no facts upon which the trustee can state any actionable wrongdoing,” the motion reads. 

Fatal to the trustee’s complaint, the firm and Banowksy argued, is its failure to explain “how Banowsky’s February 2019 litigation opinion could plausibly cause GRG to begin making the ‘$190 million’ in payments on the subject debts in 2018, before Banowsky wrote that opinion.”

The motion to dismiss characterizes the trustee’s complaint against Holland & Knight and Banowsky as a “fact-less rendition” that paints Banowsky as “the corrupt lynchpin to a web of lies that predated him,” and as “Heppner’s cloak to conceal control and dagger to extract millions.”

“The facts actually pled show Banowksy did what lawyers do: wrote an opinion letter, negotiated a loan modification, and answered the clarification call of legal counterpart.” 

Banowsky is represented by Hunter M. Barrow, Sharon McCally and Andrew B. Bender of Andrews Myers. Holland & Knight is represented by Rusty Hardin, Ryan Higgins and Emily Smith of Rusty Hardin and Associates and Jason Boland of Norton Rose Fulbright. 

Goldberg is represented by William T. Reid IV, Nathaniel Palmer, Joshua Bruckerhoff, Emma Culotta, Dylan E. Jones, Taylor Lewis, Morgan Menchaca, Tarek Saad and Michael Yoder of Reid Collins. 

The case number is 25-03064. 

Mark Curriden contributed to this report. 

Michelle Casady

Michelle Casady is based in Houston and covers litigation and appeals — including trials, breaking news and industry trends — for The Texas Lawbook.

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