There But For Fortune . . . .

It’s one of the contract lawyer’s worst nightmares: a drafting error that cost the client millions of dollars.  That’s the allegation facing Alston & Bird, which drafted the documents for a $16 million venture capital investment in an Atlanta high tech firm.  The documents were written to (naturally) give the venture capitalists a preference on liquidation, merger, or acquisition.  But the clients say the law firm inadvertently pasted a “tag-along” provision in the deal that gave the same preference to some other folks, which resulted in a $5.3 million loss to the clients.  Suit has been filed in state court in Atlanta.  The firm’s fees on the deal were reportedly about $71,000.

[Frank Snyder — hat tip, Ben Templin]