Heller Paid $7M to Departing Partners; Will They Have to Pay It Back?
Heller Ehrman paid more than $7 million to 35 partners who retired or left the firm last year before its collapse.
A bankruptcy filing detailed the payouts to partners recovering a portion of capital invested with the firm, the Recorder reports. Most of the money—$5.3 million—went to 13 lawyers who retired or were terminated, according to the story’s look at the payouts.
The highest payment went to Douglas Schwab, a senior of counsel at the firm, who got $920,000 at his retirement. Dissolution committee member Paul Sugarman got $513,000 at his retirement.
Retiring partners at Heller were entitled to all of their capital contributions, two anonymous former partners told the Recorder. Departing lawyers received 25 percent of their capital until June 1, when lawyers leaving the firm were informed they would not see any money until 2009, the story says.
Like many firms, Heller did not pay partners leaving for other law firms all of their capital contributions at once. Heller’s plan was to pay 25 percent a year for four years.
The partners who received cash aren’t in the clear, however, the story says. The payments could be targeted by Heller creditors—among them, partners who left later or stayed with the firm and now want their own share of the capital.
