Complaints preceded attorney Brian Dailey’s bankruptcies

“To avoid the consequences of its malfeasance, the debtor initiated this bankruptcy case,” receiver John Polderman said in his objection to first-day motions. “Brian Dailey and The Dailey Law Firm have shown that they cannot be trusted to act in a fiduciary capacity with client funds.”

Dailey, who also filed a petition for Chapter 13 personal bankruptcy protection July 25, is facing a 12-count complaint by the Attorney Grievance Commission accusing the personal injury attorney of dishonesty, fraud and deceit. It is scheduled for a hearing Aug. 8. Dailey could be subject to discipline as severe as disbarment.

Some of the allegations against Dailey in the 2022 Attorney Grievance Commission filing to the Attorney Discipline Board date back more than a decade. As part of their defense, Dailey and his firm have filed complaints and countersuits against those going against his practice. In court documents, Dailey alleges that a former employee embezzled $600,000 from his firm, which contributed to its financial insolvency. The former employee denies the allegation.

Dailey declined to speak to Crain’s on the record for this report.

“Brian and I are looking forward to a full and fair hearing before the hearing panel at which time we

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Dailey Law Firm files for bankruptcy amid embezzlement claims

The law firm, which specializes in medical malpractice, Social Security, class action, mass tort and criminal defense, has four attorneys listed on its website, including principal Brian Dailey. It was founded in 1927 in Iowa and relocated to metro Detroit in 1992, with additional offices in Chicago and Indianapolis.

Brian Dailey
Brian Dailey

Dailey did not return a message for comment, nor did Scott Kwiatkowski, attorney at Southfield-based Goldstein Bershad & Fried PC representing Dailey’s firm in the bankruptcy case.

The financial trouble for Dailey Law began with family issues and a cancer diagnosis, which was exacerbated by liquidity shortcomings brought on by the COVID-19 pandemic, according to the bankruptcy cover sheet.

Then in 2021, the law firm discovered that a former employee allegedly “wrongfully diverted” $600,000 in settlement proceeds. The firm was ordered to pay $600,000 into Wayne County Circuit Court in connection to the settlement from about five years ago, the filing said. Unable to pay the sum, the firm was appointed a receiver.

Dailey Law filed a lawsuit earlier this year against insurance company Travelers Indemnity Co. in an attempt to recoup the $600,000 that was allegedly embezzled. According to that lawsuit, Dailey contracted Travelers in 2010 to protect

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