Heller Suit Claims Error by Greenberg Traurig Led to ‘Chaotic’ Wind Down

The bankruptcy estate of Heller Ehrman claims in a multimillion-dollar malpractice suit that an oversight by Greenberg Traurig led to a more "chaotic" wind down.

The suit claims Greenberg failed to discover that Bank of America, Heller’s biggest lender, had terminated its security interest in Heller before the law firm dissolved, the Recorder reports. The suit says 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 bank has blamed a clerical error for the failure to perfect the security interest.

The Heller suit claims knowledge of Bank of America’s failure would have allowed the law firm to file for bankruptcy earlier and avoid a “chaotic” and “disorderly” wind down, the Recorder story says. The complaint was filed Monday in bankruptcy court in San Francisco.

A prior court filing said Greenberg “has strongly denied any liability.” The law firm said in a 2009 statement it was proud of its work for Heller Ehrman.