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Amid harsh words in lawsuit, Barnes says he can still work with Cellino

Despite the angry accusations and insults the two lawyers have traded over the past six months, Stephen E. Barnes says he would like to continue running the Cellino & Barnes law firm with his estranged partner, Ross M. Cellino Jr.

"Absolutely, I could," Barnes told The Buffalo News at State Supreme Court on Wednesday. "Ross has been my friend for over 25 years. I know we could still work together for the benefit of our clients. We've got a tremendous team of attorneys and staff. We've built something amazing together. We've spent over $100 million over the past 25 years promoting our law firm and our brand. It would be wrong to break that up."

Barnes' comments — in the first interview he has given since Cellino filed a lawsuit seeking to break up the firm in May — came after two hours of arguments before Judge Deborah A. Chimes, who is trying to decide whether the law firm should be dissolved and Cellino should be allowed to start his own firm.

Barnes said he and Cellino have spent "over $100 million in the past 25 years" to advertise and promote their Buffalo-based personal injury law firm.

"I know Ross has a burning desire to start a law firm with his kids," Barnes said. "There are things we could talk about. We’ve built this organization together. People see our images together — our two heads — and recognize us right away. There are other possibilities that we've never even talked about. Breaking the firm apart, there's no guarantee that is going to work."

Asked for his reaction, Cellino said he does not share Barnes' desire to continue working together.

“For three difficult years, I tried to voice my concerns about changes that would improve our firm," Cellino said. "My efforts were rebuffed and my ideas were rejected. We are at a deadlock. It is time for us to go our separate ways. Steve has already started his firm. It’s only fair that I start mine.”

Cellino's comment on Barnes' starting his own firm was related to the fact that Barnes alone now heads the California-based law office in which Cellino formerly had a small percentage.

Barnes accuses Cellino of trying to burn law firm 'to the ground'

Terrence M. Connors and Vincent E. Doyle III argued Wednesday in behalf of Cellino, and Paul J. Cambria presented Barnes' case to the judge. The arguments centered on two questions — whether Cellino's lawsuit seeking to break up the firm should be dismissed and whether Cellino's recent request to have a receiver appointed to oversee the firm's operations should be granted.

While the dispute between the two lawyers has only been publicly known since May, it has "festered" behind the scenes for years, Connors said. He said the two partners have been arguing since at least 2015 and now view each other with "pure acrimony" and "disgust," to the point that they really cannot work together anymore.

"They know the relationship is over. They know it's dead," Connors said.

Cellino is currently caught in a situation where any suggestion he makes about the operations of the firm can be vetoed by Barnes, according to Connors and Doyle.

The firm has only two stockholders, Cellino and Barnes, each owning 50 percent. The firm has only two board members — Barnes, who is the president of the board, and Cellino, the vice president. So anytime Cellino wants to change anything, he and Barnes vote against each other and are "deadlocked," Doyle said.

Cellino has told Barnes that he wants to be "more involved" in the law firm's important decisions, his lawyer said.

"Mr. Barnes has denied it, under his purported authority as president," Doyle said.

Appointing a receiver as the court's representative to oversee the law firm's operations would be a better way to allow both Cellino's and Barnes' voices to be heard, Connors said.

A receiver should be appointed when there are "extreme personal differences" between two individuals running a corporation, Connors said.

"There is so much contested here that we could go on for days," he said.

If Cellino & Barnes break up, who gets to use 888-8888?

Cambria asked the judge to place the welfare of the law firm's clients and employees above Cellino's concerns. He said profits and client intake at the firm have risen steadily for years, even during the months of publicity over the dispute between Cellino and Barnes.

"I've been in the law business for more than 40 years, and this is the most successful law firm I've ever seen, ever dealt with," Cambria said. "This company is thriving, and it's doing its paramount service, which is to serve its clients."

There is nothing at all unusual about arguments between leaders of a corporation, Cambria said. He said that what is really important in this case is that the firm's two stockholders, its more than 200 employees and more than 12,000 clients are being well served.

He said the two stockholders — Cellino and Barnes — each make about $1 million a month. Cambria said the firm's attorneys average about $300,000 — far more than what most local attorneys make.

"The brand itself is worth $42 million. It has been accorded brand status by Google. That's a big deal," Cambria said. "It would be a travesty to destroy this company … The facts and figures show that the money is going through the sky."

There is much more to a law firm than making money, Connors said.

"It's not running smoothly now, no matter how much money they continue to make," Connors said.

In a document filed by the Cellino forces prior to Wednesday's hearing, Cellino said he wants to slow down the law firm's spending on advertising, which he said was well over $4.6 million in the first 11 months of this year. Cellino said he and Barnes have an "ongoing dispute and deadlock" about advertising.

"I would have already eliminated our radio ads and reduced our TV advertising by 70 percent," Cellino said in court papers. "The corporate funds involved are significant … I do not believe that it makes financial sense to continue to make substantial cash outlays to support a brand that will soon cease to exist ... We do not need to waste corporate funds to enhance and support name recognition."

Behind the Cellino & Barnes breakup: Cellino, the 'warm and fuzzy' partner

Speaking to The Buffalo News outside the courtroom, Barnes said he agreed with Cambria's contention that the firm continues to serve its clients well.

"I would tell you that the vast majority of the attorneys and staff members in our firm have lined up behind me. The vast majority of attorneys and staff would be against dissolving our law firm," Barnes said.

He added: "We're all still working. I don’t have time to sit around twiddling my thumbs, worrying about what Ross is saying. Right now, I'm working on a case with three other attorneys on a product liability case in New York City that we believe will be one of the biggest product liability cases in the country. It involves a decorative device that exploded and seriously injured a 14-year-old. The court has already ruled that the device was defective, and now it's strictly a case on damages. We're working on this case and many others."

"Today’s argument confirmed the inevitable. It is time for Ross and Steve to go their separate ways," Connors said.

Chimes made no decisions on Wednesday and gave no timetable for future proceedings in the case. Legal observers say the court battle is likely to go on for months.

Behind the Cellino & Barnes breakup: Barnes, the hard-charging Marine

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