Former Heller Ehrman chairman Matthew Larrabee has denied allegations that management at the now-defunct firm inflated profits in 2007 by overpaying partners up to $9m (£5.4m), reports The Recorder.

The creditors committee in Heller's bankruptcy case made the allegations as part of its larger effort to prove the firm was insolvent in 2007 and increase the amount of money they can claw back from former Heller shareholders.

However, Larrabee contacted The Recorder on Tuesday (11 August) to say the allegations are "without merit."

Other former Heller management, including Barry Levin, Robert Hubbell and chief financial officer Richard Holdrup, did not respond to requests for comment.

According to The Recorder: "Larrabee did not respond, and Levin, Hubbell, and Holdrup declined to answer, when asked if there was a reasonable explanation for the $9m discrepancy creditors have apparently found in Heller's books."

The Heller estate is seeking as much as $106m (£64m) from former firm shareholders.

The bankruptcy court report also alleges that in late 2007 Heller printed 118 cheques made out for $3m (£1.8m) in total to pay for expenses. The firm then placed a hold on the cheques and did not let them clear until early 2008, the report says.

The information is the result of investigations by the creditors committee. The report indicates it believes Heller's management was making these "very troubling business decisions" to boost its 2007 numbers.

This article first appeared on The Am Law Daily blog on americanlawyer.com.