Posted Apr 30, 2013 01:34 pm CDT
Greenberg Traurig has agreed to pay $4.9 million to settle a suit claiming the firm contributed to a “chaotic” wind down of Heller Ehrman.
The deal still needs the approval of a bankruptcy judge, the Wall Street Journal Law Blog (sub. req.) reports. Greenberg Traurig spokeswoman Jill Perry told the Law Blog that the firm is happy to resolve the dispute to avoid the “costly and diverting” litigation. If the litigation had continued, she said, the firm was confident it would prevail with a finding that its lawyers acted in Heller’s best interests.
The suit filed in 2011 by the Heller bankruptcy estate had claimed Greenberg Traurig failed to discover that Bank of America, Heller’s biggest lender, had terminated its security interest in Heller before the law firm dissolved. The suit said Greenberg represented Bank of America at the same time it served as lead counsel for Heller’s dissolution, but failed to disclose its work for the bank.
The suit had claimed that knowledge of Bank of America’s failure would have allowed Heller to file for bankruptcy earlier and avoid a “chaotic” and “disorderly” wind down.