NEW YORK (8/3/09)--At least four law firms have withdrawn or are seeking to withdraw from a case that involves a financially troubled company formerly chaired by a man convicted of defrauding credit unions, Fannie Mae and others when he headed up the now-bankrupt U.S Mortgage Corp. and CU Mortgage. The defendant company is Dallas-based Home Solutions of America Inc., which specializes in restoring homes after disasters. Its former chairman, Michael McGrath, pleaded guilty June 11 to defrauding 19 credit unions, Fannie Mae and others of $139.6 million related to the bankruptcies of the mortgage companies. He will be sentenced on Oct. 1 (News NowJune 16). According to a July 21 summary judgment in the New York Supreme Court, Justice Emily Goodman awarded New York law firm Morgan, Lewis & Bockius $2.4 million, plus interest, for legal fees owed the firm by Home Solutions of America Inc., from 12 legal situations in 2007. The New York Supreme Court is a trial-level, lower court. The court acting as the highest court in the state is the New York Court of Appeals. Also, on July 23, Justice Goodman granted another law firm--New Jersey-based Riker, Danzig, Scherer, Hyland & Perretti LLP-- its motion to withdraw as attorney of record for Home Solutions because Home Solutions owed the firm $60,000 for work from November 2008 to April 2009. The firm had defended Home Solutions in the lawsuit filed by Morgan, Lewis & Bockius (New York Law Journal July 29). The other firms trying to withdraw are from Texas--Fulbright & Jaworski and Hallett & Perrin, said the journal. In January 2008, Home Solutions of America was delisted from the Nasdaq Stock Exchange after missing deadlines for filing quarterly reports. It had financial and legal difficulties for most of 2008 and has been selling or closing all its divisions except those in New Orleans, it said in a filing with the Securities and Exchange Commission. McGrath had offered Morgan Lewis $1 million to settle accounts but the law firm said it was owed $2.5 million. Riker Danzig had required McGrath to sign a personal guaranty for payment of fees and costs, but McGrath resigned as chairman of Home Solutions and federal prosecutors froze his assets.