Winston & Strawn faces $40m negligence lawsuit

US firm Winston & Strawn is being sued for nearly $40m (£21.7m) by the city council of a town in New York State for providing bad advice on a trash-hauling deal in the mid-1990s.

The Town of North Hempstead claims the firm provided bad advice in relation to a trash-hauling contract it backed out of in 1993. It was subsequently sued for $32m (£17.36m) in 1999 by Sumitomo Bank, which had lent the town $8.5m (£4.6m) as part of the contract.

The town is now seeking to recover the $32m (£17.4m), plus legal fees and interest, on the basis that Winston & Strawn wrongly advised that it did not have to repay the $8.5m (£4.6m) or replace the trash-hauling company.

However, a spokesman for Chicago-based firm Winston & Strawn claimed that the matter was unfounded, as it was the town's own attorneys that made the decisions under challenge.

If the matter proceeds, a trial is expected next year.