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furniture and equipment from a friend who had closed a real
estate office, hired office employees, obtained a telephone
number, and opened the Sacramento office for Finley Kumble. On
the day he opened the Finley Kumble Sacramento office, California
treasurer Jess Unruh called Mr. Blonien to inform him that Finley
Kumble would be appointed counsel for the issuer or underwriter
in several new California agency bond transactions. Finley
Kumble began to pay the payroll for its Sacramento office by the
third week of April, reimbursed Mr. Blonien for office expenses
advanced by him, and paid him a draw of approximately $4,000
every 2 weeks. See infra note 3. A month or so after the
opening of the Sacramento office, Finley Kumble sent out a notice
that Mr. Blonien had joined the firm as a partner and that the
Sacramento office was open. Mr. Blonien’s title was partner, and
he expected that he would be a partner of Finley Kumble in all
respects once the paperwork was finalized.
During summer 1987, Mr. Blonien read an article in “The
American Lawyer” concerning Finley Kumble’s financial problems.
These problems arose from Finley Kumble’s practice of factoring
its accounts receivable and its failures, upon collecting the
accounts, to repay the factor’s advances. A number of partners
of Finley Kumble left the firm around this time, and Mr. Blonien
questioned whether he should remain with the firm.
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