Former Heller employees demand better representation
Heller Ehrman's former employees are demanding better representation on the bankrupt estate's unsecured creditors committee because of what they call a lack of aggressiveness in pursuing former shareholders and collecting accounts receivable, reports The Recorder. The employees say they "lack an adequate voice on the committee" and are demanding the appointment of a former Heller employee to the committee who is not a former shareholder "nor aligned with former shareholder interests."
August 04, 2009 at 10:49 AM
2 minute read
Heller Ehrman's former employees are demanding better representation on the bankrupt estate's unsecured creditors committee because of what they call a lack of aggressiveness in pursuing former shareholders and collecting accounts receivable, reports The Recorder.
The employees say they "lack an adequate voice on the committee" and are demanding the appointment of a former Heller employee to the committee who is not a former shareholder "nor aligned with former shareholder interests."
The current employee representative on the five-person committee is Wondie Russell, who was once a partner at Heller. She was a contract attorney when the firm collapsed and has the largest employee claim, for about $92,000 (£54,000).
In a letter addressed to Minnie Loo, a trial attorney in the San Francisco office of the US Trustee who is charged with choosing committee members, the employees' counsel Craig Collins, of litigation boutique Blum Collins, accuses Heller's former partners of running off with clients and accounts.
"We expect that the accounts receivable are owed in most cases by clients whom the former shareholders have taken with them to other law firms," Collins said. "Those former shareholders have no incentive to encourage their current clients to pay their old debts to Heller at the same time the shareholders are working to establish new relationships between their clients and their new firms. The economic incentive is to breach their fiduciary duty to their former firm and its creditors and to bring to their new firms all of the new income they can generate."
The letter was mailed to The Recorder in an envelope without a return address.
"I disagree with the tone and the content of the letter, and it is misinformed," said Thomas Willoughby, a partner at Felderstein Fitzgerald Willoughby & Pascuzzi, which represents the creditors committee.
He said Heller continues to collect money from clients and a report will be filed this week with an update on the estate's financial affairs. He said the estate has about $10m (£5.9m) in cash. As for pursuing former partners, he said there are confidential settlement negotiations going on behind the scenes.
"I amm certain lawsuits would follow if there is no settlement," Willoughby said.
The Recorder is a US sister title of Legal Week.
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