This just in: As predicted by The Recorder last week, the defunct firm Heller Ehrman has filed for Chapter 11 bankruptcy protection. In a statement, former Heller partner Peter Benvenutti said the firm filed not because it has run out of money, but because its main two lenders — Bank of America and Citibank — refused to renegotiate the terms of a $5.7 million debt the banks say the firm owes as part of a long-term loan.
Another contributing factor: A judge’s ruling last week that the firm’s San Francisco landlord, 333 Bush Associates, was entitled to a $48 million writ of attachment — meaning a portion of Heller’s assets were immediately frozen, and Bush Associates became a secured creditor, ahead of dozens of unsecured creditors waiting in line for their money. (The firm’s dissolution committee has settled accounts with nine other landlords, according to a 13-page declaration Benvenutti filed with federal bankruptcy court in California).
