Question
During a routine audit, LeNature Corporations chief financial officers expressed concerns about the accuracy of the corporation's sales figures. The next day all three submitted
During a routine audit, LeNature Corporations chief financial officers expressed concerns about the accuracy of the corporation's sales figures. The next day all three submitted resignation letters, explaining that they suspected Greg Podlucky, the corporations founder, of engaging in improper conduct with LeNature's suppliers LeNature's board of directors appointed a special committee of three independent directors to conduct an investigation. The special committee retained the services of a law firm, K&L gates, to lead the inquiry. The law firms stressed that it was "engaged to act as counsel for the special committee and for no other individual or entity including the Company." Upon completion of its inquiry, and before issuing any report to the special committee, the law firm send a message to Podlucky, announcing that had found no evidence of fraud or malfeasance. In reality, K&L Gates had failed to uncover a massive fraud being perpetrated by Podlucky and as a result he continued to "loot" the company. After the fraud was finally uncovered, the corporation, which was forced into bankruptcy, sued the law firm for malpractice. Did the law firm owe a duty to the corporation? Explain.
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