The Work
October 7, 2009 3:30 PM
Former Heller Partners Dispute Creditors Claims
Posted by Drew Combs
As Heller Ehrman was on the brink of collapse last year, there was much disagreement among the partnership. But in responding to a lawsuit by creditors of the now-defunct firm, former partners have found something they can agree on.
In recently filed court documents, 90 former Heller partners refute claims by creditors that the firm was insolvent in 2007, according to an article in The Recorder, an Am Law Daily sibling publication. The assertion by the former partners challenges a key point creditors must establish in a fraudulent transfer case.
The brief represents the former partners' first response in connection with the 10-month-old bankruptcy. In it, they contend that Heller was not undercapitalized at the end of 2007. The former partners lay the blame for the firm's demise on the economic downturn. According to the brief, the lawyers contend payments to the partnership in early 2008 were not bonuses, but rather compensation for services rendered.
Former Heller partners currently are participating in mediation with the creditors committee, according to the Recorder. Creditors have threatened to sue former partners and the law firms they went to on fraudulent transfer claims. But, the brief points out that an "unforeseeable calamity" can serve as a defense in fraudulent transfer cases.
Michael Rugen, a former Heller partner, says in the article, "The shareholders contend that there were a number of unforeseen events, including primarily the economic downturn, the unforeseen departure of a number of significant shareholders and finally the banks deciding to call our line of credit and seize our cash flow."
Make a commentComments (0)
Save & Share: Facebook |
Del.ic.ious |
| Email |
Reprints & Permissions
From the Law.com Newswire
 |
Sign up to receive Legal Blog Watch by email |
 View a Sample |
|
Advertisement
Advertisement
Comments
Report offensive comments to The Am Law Daily.