A Fortress lawsuit against Dechert Law Firm in connection with the Marc Dreier's $400mn fraud scheme has been tossed by an appeals court. In 2008, Dreier proposed a transaction in which his clients, developer Sheldon Solow and his realty companies, would borrow $50 million from Fortress Investment Group to finance the purchase of real-estate assets. The deal followed two similar loans in 2006 totaling $60 million, according to court papers. Fortress asked Dreier and Solow Realty to retain an independent lawyer to issue an opinion as to whether the loan documents were properly executed. They hired Dechert, which examined the papers and stated that the documents were binding. Several months later, Dreier was charged in a massive fraud scheme, and Fortress discovered that the documents contained forged signatures, according to court filings. Solow Realty had no knowledge of the purported loan. Fortress sued Dechert, claiming it would not have entered into the agreement without its legal opinion. Last summer, a state Supreme Court judge denied Dechert's motion to dismiss the complaint. On Tuesday, the Appellate Division, First Department, reversed that decision, ruling that Dechert was not responsible for ascertaining whether the signatures were legitimate. "As Dreier was Solow Realty's attorney and the guarantor of the loan, defendant had no reason to suspect that Solow Realty was not in fact a party to the loan transaction or that Dreier forged the signatures of its principal and CEO," the five-judge panel wrote. The court also noted that Dechert's legal opinion explicitly "assumed the genuineness of all signatures and the authenticity of the documents" and that Fortress' own legal counsel reviewed the opinion. Marc Kasowitz, the lawyer who represented Fortress, said in a statement that his client disagreed with the ruling. "In its opinion letter at issue in the case, Dechert told Fortress that it was acting as 'special corporate counsel' to Solow Realty in the transaction -- a statement that Fortress relied on in entering into the transaction and that proved to be utterly false. "If it stands," Kasowitz continued, "the Appellate Division's ruling would permit law firms to provide legal opinions without so much as knowing who they represent, and would put parties at their peril in relying on legal opinions in corporate transactions. Fortress is reviewing the decision and considering all of its available legal options." Dechert's lawyer, Joel Miller, said, "We're very pleased with the result. We think it's a confirmation of New York law." Dreier, who once ran a 250-member law firm by the same name, pleaded guilty in May 2009 to securities fraud, money laundering and other charges and was sentenced to 20 years in prison.  [Reuters 11/29/11]