- The Washington Times - Friday, June 22, 2001

Virginias Supreme Court has ruled that a lawyers legal advice is no guarantee against thousands of dollars in damages for improper handling of a companys business.
As result of the June 8 ruling, F. Carter Flippo, of Ashland, must pay more than $550,000 to his sisters three children, who claim he had mishandled the business of Flippo Land and Timber Co. inherited from their grandfather, T. Frank Flippo.
"This is an important case for lawyers because the states highest court now says that legal advice is not a shield that will automatically protect someone who wants to play hardball in certain business matters," said Paul Fletcher, publisher of Virginia Lawyers Weekly.
The Flippo company owns timberlands in Hanover, Caroline, King and Queen, and King William counties. T. Frank Flippo, who died in 1974, willed the company to his two sons, F. Carter and Arthur, and his daughter, Lucy Flippo Wisely, who in turn gave her share to her children. F. Carter Flippo served as manager of the business.
After consulting the Richmond law firm McGuire Woods in 1998, F. Carter Flippo prepared his own inheritance estate and formed a joint venture with another company.
The legal advice was that he could transfer the Flippo company assets to the other company, in effect dissolving the Flippo company.
Mrs. Wiselys children sued.
F. Carter Flippo had based his defense on a Virginia law that the manager of a company like Flippo can rely on the advice of attorneys to protect against liability.
But, a King William Circuit Court ruled that F. Carter Flippos plans were for his own personal interests and not related to the interests of the Flippo company.
The Circuit Court ordered payment of $12,860 in legal damages and $350,000 in punitive damages to Mrs. Wiselys children, and $178,000 in legal costs to the Flippo company.
In his appeal, F. Carter Flippo contended his actions were legal. The seven-judge Supreme Court ruled unanimously against him. Justice Elizabeth B. Lacy wrote the opinion, stating that "an act which is otherwise legal may nonetheless breach ones fiduciary duty."
F. Carter Flippos "actions to further his estate-planning goals, based on advice directed toward that end alone, violated his fiduciary duty," she wrote.

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