Litman v. Goldberg, Index No. 524343/2025 Updated: March 26, 2026 Source: Combination Agreement dated March 29, 2017 (OCR from scanned PDF)
From Section 7 of the Combination Agreement between Richard C. Litman and Nath, Goldberg & Meyer, dated March 29, 2017:
"LITMAN's monetary compensation shall be based on collections and he shall not be paid on billings which are not collected. Commencing with the Commencement Date, LITMAN's monetary compensation shall be Twenty Percent (20%) of Revenue (defined below) received by NGM from LITMAN Originated Clients (defined below) plus Forty Percent (40%) of Revenue received from LITMAN's billings for work performed by him, regardless of when received by NGM."
"As used herein, 'Revenue' means (i) money paid; (ii) the monetary value of any set-off of fees owed to NGM for a particular matter by a foreign associate against fees owed by NGM to a foreign associate for other matters; or (iii) other, similar bartering or non-cash income in each case excluding fees and disbursement advanced by NGM."
"Upon termination of the Agreement, LITMAN or his estate shall be paid deferred monetary compensation equal to twenty percent (20%) of the Revenue (regardless of when received by NGM) from billings for services rendered to LITMAN Originated Clients during the three (3) year period immediately following the termination of this Agreement, which such three (3) year period can optionally be extended by one or two years upon the mutual agreement of all parties."
"a 'LITMAN Originated Client' shall mean and refer to any client that has engaged or continues to engage NGM as a primary consequence of the efforts, reputation or other actions of LITMAN, including (i) all clients of Litman Law Offices, Ltd. or B&P, which become clients of NGM, (ii) new clients from Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, Jordan and the United Arab Emirates; and not to include clients of NGM as of the Commencement Date, (iii) all other new clients developed by LITMAN; and (iv) an agreed upon allocation of Revenue to LITMAN for matters originated from NGM's existing clients based upon proportionate contributions of LITMAN and other NGM attorneys."
"Revenue" is defined as "money paid" — this is the broadest possible definition. It means:
The ONLY exclusion is "fees and disbursement advanced by NGM." This means:
The exclusion says "advanced by NGM" — not "disbursed." This matters enormously:
| Scenario | Is It "Revenue"? |
|---|---|
| KFU wires $595,214 to NGM trust account | YES — "money paid" by client |
| NGM uses $2,400 of KFU's trust money to pay USPTO issue fee | The $2,400 was NOT "advanced by NGM" — it was the client's money. Still Revenue. |
| NGM fronts a $2,400 USPTO fee from its operating account before client pays | This IS "advanced by NGM." Excluded from Revenue until client reimburses. |
| Line | Amount |
|---|---|
| "Receipts Minus Expenses" | $12,012,259 |
| 20% | $2,402,452 |
| Payments to Litman | $2,403,126 |
| "Difference" | ($674) — claims Litman was overpaid |
Problem: This deducts ALL expenses (including disbursements paid from client trust funds) from Revenue. The contract only excludes "fees and disbursement advanced by NGM" — not disbursements paid from client money. Goldberg's method systematically understates Revenue by treating client-funded disbursements as NGM advances.
| Line | Amount |
|---|---|
| Total Funds Received (2020-May 2025) | $24,925,555 |
| Less: Collected Disbursements | $6,399,095 |
| "Collected Fees" | $18,526,460 |
| 20% Due | $3,705,292 |
| Payments to Litman | $4,022,162 |
Note: This is how the formula was ACTUALLY APPLIED in the master Litman Summary spreadsheet from 2020 through May 2025. "Total Funds Received" minus "Collected Disbursements" = "Collected Fees," then 20% of that. This method was accepted by both sides for years.
Problem: This deducts ALL "Collected Disbursements" — including disbursements paid from client trust funds. Under the contract language, only disbursements "advanced by NGM" should be excluded.
| Line | Amount |
|---|---|
| Total incoming funds (trust accounts) | $32,708,669 |
| Less: intermediary expenses | $3,328,266 |
| Revenue subject to 20% | $29,380,403 |
| 20% Due | $5,876,081 |
| Payments to Litman | $2,403,126 |
| Underpayment | $3,472,955 |
The contract says "Revenue = money paid ... excluding fees and disbursement advanced by NGM." Under this language:
The master Litman Summary deducts ALL "Collected Disbursements" ($6.4M) — but the contract only authorizes deducting disbursements "advanced by NGM." Many of those disbursements were paid from client trust deposits, not NGM's own funds.
Even under the most conservative reading, Revenue cannot be lower than what the master Litman Summary shows ($18.5M for 2020-2025), because that formula was accepted and applied by both parties for years. Goldberg's Workup figure of $12M is lower than his own firm's operationally applied formula.
Section 9 defines "LITMAN Originated Client" to include "new clients from Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, Jordan and the United Arab Emirates."
This is automatic — ANY client from these countries is a Litman Originated Client by contract definition. No factual dispute is possible on this point for:
Total from contractually-defined Litman Originated Clients: $12,857,519 (93.5% of all payments)
Section 7 provides for continued 20% payments for three years after termination on all Revenue from Litman Originated Clients. If termination occurred in June 2025, the 20% obligation continues through June 2028.
With $1.2M in trust balances and 70+ pending KFU patent applications as of June 2025, substantial Revenue will continue flowing to NGM from Litman Originated Clients for years. Litman is entitled to 20% of all of it.
"The Agreement defines Revenue as 'money paid.' Do you agree that a $595,214 wire transfer from King Faisal University is 'money paid'?"
"When KFU deposited money into trust and you used that money to pay a $2,400 USPTO fee, was that a 'disbursement advanced by NGM' or a disbursement paid from the client's own funds?"
"Your Workup shows $12 million in 'Receipts Minus Expenses.' The Agreement says Revenue is 'money paid excluding fees and disbursement advanced by NGM.' How is 'Expenses' in your Workup the same as 'disbursement advanced by NGM'?"
"Can you identify which specific disbursements in the $6.4 million 'Collected Disbursements' were actually 'advanced by NGM' from operating funds, as opposed to paid from client trust deposits?"
The contract language "Revenue means money paid" supports a revenue base significantly higher than Goldberg's $12M Workup figure. The only authorized deduction is "fees and disbursement advanced by NGM" — limited to costs that NGM fronted from its own operating funds, not costs paid from client trust deposits.
The 20% base is likely between $18.5M (the operationally applied formula) and $29.4M (trust receipts minus intermediary expenses). Either figure results in substantial underpayment to Litman.