Law Firms
Heller Holds Firmwide Meeting on Plans for ‘Orderly Transition’
Posted Sep 25, 2008 6:24 AM CST
By Debra Cassens Weiss
Updated: Heller Ehrman held a firmwide videoconference yesterday to discuss “plans for an orderly transition (or wind down) of our business,” according to an e-mail announcing the meeting.
The Recorder and the Daily Journal (sub. req.) both quoted from the e-mail, but neither had details of the meeting. Heller has hired a lawyer to advise it on dissolution, the Recorder story says, and it laid off several contract workers yesterday in San Francisco, according to the Daily Journal story.
Meanwhile, leaders from out-of-town law firms seeking to hire Heller partners or practice groups are camped out in San Francisco hotels to meet with the potential new hires.
The Recorder story says two concerns are the firm’s credit line and long-term office leases. Heller needs cash for an orderly dissolution. It also is talking to other law firms about hiring larger practice groups and taking over the firm’s office space, reducing the firm’s liabilities.
Since this post was written, Heller's chairman has reportedly told all hands at the law firm that it will need to vote to dissolve tomorrow, as discussed in a subsequent ABAJournal.com post.
Updated at 7:30 p.m. to include link to subsequent ABAJournal.com post.
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Comments
Lawcomment
Sep 25, 2008 11:26 AM CST
The report that Heller Ehrman is planning and “orderly” transition (or wind down)” certainly depends on how you define “orderly”.
It is rare in the unravelling of a large, multi-national law firm that everyone agrees on what the order of priorities is when it comes to paying the bills. As it lays off workers and faces potential claims for severance and creditors other than its lenders and lessors start to look for payment, it will be difficult to see it liquidate outside of bankruptcy. in facilitating the transfer of the going concern value of large groups and offices who carry on discrete business operations, there is always the risk that an unpaid creditor will claim that the acquiring firm should acquire some of Heller’s debt as part of the deal. Whether the transactions can bring along the leased space is a major issue. If Heller’s banks have liens on receivables, cash can dry up very quickly.
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Andy the Lawyer
Sep 29, 2008 10:30 AM CST
One is struck by the comparable image of hundreds of rats engaging in an “orderly transition” from the Titanic to the Atlantic Ocean.
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