December 22, 2008 11:47 AM
Dreier Update: $1.1 Million Left, Trustee On the Way
Posted by Zach Lowe
A bankruptcy judge on Friday said Dreier LLP's receiver can spend $660,000 of the firm's last $1.1 million to keep the firm afloat until a trustee is named to oversee its pending bankruptcy, according to Am Law Daily sibling publication New York Law Journal.
Of the $600,000, $107,000 will go to pay salaries for the 17 remaining employees at the firm, while $214,000 will go to the firm's insurance carrier to make sure Dreier LLP's malpractice coverage stays in place through at least early February.
As we've written before, solid malpractice coverage (though Dreier's apparently only covers $10 million in damages) is crucial, since some of the firm's 240 or so lawyers could become targets of lawsuits filed by clients intent on recovering their missing money.
(For the uninitiated: Dreier LLP's sole equity partner, Marc Dreier, is being held on charges that he tried to scam clients out of nearly $400 million over the last two years.)
Speaking of missing money, there is still the matter of as much as $38.5 million that may be missing from the firm's escrow accounts. On Friday, the court appointed Curtis, Mallet-Provost, Colt & Mosle partner Steven Reisman to investigate what exactly happened to that money.
One final tidbit: the firm's receiver, Mark Pomerantz of Paul, Weiss, Rifkind, Wharton & Garrison, said he will try and force Marc Dreier to file for bankruptcy if he doesn't do so voluntarily. Dreier's lawyer, Gerald Shargel, has said repeatedly that Dreier has no plans to file.Make a comment