December 18, 2008 11:53 AM

Who are Dreier's Creditors? The Usual . . . And Recruiters

Posted by Zach Lowe

In today's editions, the New York Law Journal takes a look at the top creditors listed in the bankruptcy papers the receiver controlling Dreier LLP filed late Tuesday and finds that Dreier's top creditors include the firm's landlord, construction companies and office suppliers.

Some of those creditors talked to the NYLJ, and their stories hint at questionable financial practices that were going on at Dreier months--and maybe years--before Marc Dreier, the firm's sole equity partner, allegedly began conjuring up elaborate scams to con clients out of nearly $400 million. Dreier staffers, the aggrieved parties tell the NYLJ, would claim that checks were simply awaiting Dreier's signature, but that Dreier was always "traveling" and unavailable to sign. 

We heard similar stories today, and we also noticed another group of creditors on the Dreier list: legal recruiters and temp placement agencies.

Topping that list: Mark Bruce International, a New York-based recruiter waiting on a $230,000 check from Dreier. The firm's owner, Mark Rosen, says the recruiter placed a large group of partners at Dreier in June 2007, and that Dreier paid a large chunk of the placement fee quickly. The balance, however, never came, and Rosen says that when he asked why, people at the law firm claimed Dreier didn't want to pay because the partners were "under-performing."

(An interesting side note: Dreier's firm once represented Mark Bruce in a lawsuit the recruiter filed against the Philadelphia firm Blank Rome. In the suit, the recruiter claimed Blank Rome owed it nearly $730,00. Mark Bruce claimed the law firm promised it the job of orchestrating a merger with a New York boutique, but eventually backed out and instead gave the work to Major, Lindsey & Africa--whch got nearly $730,000 for the work. Mark Bruce lost the suit, according to this New York Law Journal recap of the case.) 

Dreier owes Mestel & Company $150,000 and Strategic Workforce Solutions, a temp placement agency, $86,350, court records show. Officials at Mestel did not immediately return calls, and officials at Strategic Workforce declined comment. 

One creditor who wished to remain anonymous told the Am Law Daily that staffers at Dreier have said that Marc Dreier would write out checks to debtors in order to clean up his books internally, but would never sign or send those checks. 

Donald Epstein, an official at Lehr Construction Corp., Dreier's second-largest creditor, summed it up nicely for the NYLJ: "It was always a struggle. You get nowhere with them."

Other details from the NYLJ: 

•Dreier lawyers and staffers, as expected, went unpaid on Dec. 15.
•Dreier met Wednesday for the first time with Mark Pomerantz, the Paul, Weiss, Rifkind, Wharton & Garrison partner serving as the firm's court-appointed receiver. Dreier's lawyer, Gerald Shargel, said Dreier has been "cooperative." Shargel says he is trying to sort out Dreier's overseas finances (if there are any) to determine whether his client is indeed a flight risk or might be entitled to bail.

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