On December 11, 2009, the financing unit of private equity and hedge fund manager Cerberus Capital Management, L.P., Ableco Finance LLC (Ableco), filed an amended complaint in New York State Supreme Court against Paul, Hastings, Janofsky & Walker LLP (Paul Hastings), claiming the law firm gave it bad advice in connection with a $125 million loan Ableco made last year to Bay Harbour Management (Bay Harbour), a company looking to bring retailer Steve & Barry’s out of bankruptcy.  Ableco alleges that Paul Hastings failed to inform Ableco about an earlier agreement between Steve & Barry’s and Bay Harbour that prevented Ableco from taking over all of Steve & Barry’s inventory.  Ableco claims it would not have made the loan if Paul Hastings had advised it that the buyer, Bay Harbour, would not have rights to all of Steve & Barry’s inventory, which Ableco had understood would back the loan.  This article details the factual and legal allegations in the complaint.