Bitcoin Mining Firm Gryphon Files Malpractice Lawsuit Against K&L Gates in New York
On Monday, April 14, 2025, bitcoin mining company Gryphon Digital Mining filed a complaint in the US District Court for the Southern District of New York against the global law firm K&L Gates LLP and partner Robert Honeywell. The lawsuit alleges legal malpractice, negligence, and breaches of fiduciary duty related to a bankruptcy case involving Core Scientific, Inc.
Gryphon Digital Mining claims that K&L Gates, which has over 1,700 attorneys and is recognized as one of the largest law firms in the United States, failed to file a crucial proof of claim form during a bankruptcy proceeding that significantly impacted Gryphon’s financial standing. The complaint details that Gryphon retained K&L Gates to provide legal counsel regarding its contracts and related bankruptcy matters but contends that the firm neglected to fulfill its basic responsibilities.
According to the filing, K&L Gates did not file the proof of claim by the deadline of April 14, 2023, despite repeated requests from Gryphon. This oversight, the complaint states, resulted in Gryphon suffering substantial financial losses. The firm ultimately had to hire new legal representation to address the situation, which identified the need for the proof of claim almost a year after K&L Gates was engaged.
The complaint outlines that Gryphon first sought K&L Gates’ services regarding its planned merger with Sphere 3D Corp. and related agreements. However, following the abandonment of the merger in early 2022, Gryphon continued to require legal guidance, particularly as Core Scientific filed for Chapter 11 bankruptcy in December 2022.
The lawsuit accuses K&L Gates of failing to monitor the bankruptcy proceedings adequately, missing critical developments that affected Gryphon’s rights. In particular, it highlights that when Sphere filed a $35 million proof of claim against Core, Gryphon was not advised that it should have filed its own claim.
Additionally, the complaint alleges that K&L Gates engaged in improper billing practices, charging Gryphon for legal services that were not performed competently. It states that the firm assigned an excessive number of attorneys to Gryphon’s case, resulting in overcharging of more than $2.7 million in legal fees, which Gryphon asserts were unnecessary and unjustified.
Gryphon’s legal action seeks damages for the financial harm it claims to have endured due to K&L Gates’ alleged malpractice. The complaint also demands accountability for breaches of contract and violations of ethical duties owed to Gryphon by the defendants.
The court filing asserts that the actions of K&L Gates and Honeywell fell below the standard of care expected from legal professionals. Gryphon contends that the defendants ignored their fiduciary responsibilities, leading to a situation where Gryphon was forced to compromise its legal position in related litigations.
In its prayer for relief, Gryphon requests a jury trial on all claims, along with damages to be proven at trial, attorneys’ fees, costs, and interest.
Please contact BlockTribune for access to a copy of this filing.
