At least four lawyers and law firms are among the top creditors of Masry & Vititoe, the personal injury law firm of Erin Brockovich fame that filed for Chapter 11 bankruptcy protection on Aug. 14.
The firm, based in Westlake Village, Calif., said in bankruptcy court papers that it has spent $3 million defending lawsuits filed by the family and estate of former name partner Edward Masry, who died in 2005.
“Not only did a number of litigants come forward alleging that Mr. Masry had promised them certain assets and cash from the firm, additionally, his own estate and heirs instituted claims which have caused the firm to spend its resources, in time and staff, defending such claims,” the firm said in an Aug. 24 motion seeking cash collateral in order to keep operating.
The firm declared monthly expenses of more than $670,000 — including payroll and client expenses associated with existing and impending cases involving airplane crashes. The firm is spending $50,000 per month for travel associated with litigation stemming from a tour bus accident in Arizona that killed seven Chinese nationals and injured another 10 people earlier this year.
A hearing on the firm’s cash flow is set for Sept. 9, said Lisa Cohen, a spokeswoman for the firm.
“In the meantime, business will continue as usual,” Cohen said in an e-mailed statement. “Clients will feel absolutely no impact from the Chapter 11 process. All lawyers and employees will be retained, with no reductions in pay, no layoffs, and no furloughs. The firm’s top management team is in place and unchanged.”
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