November 30, 2011 6:32 PM
Bankruptcy Judge Approves Ruden McClosky's Sale to Lone Suitor
Posted by Brian Baxter
Almost a month after filing for Chapter 11, the remnants of Florida firm Ruden McClosky are set to be sold to Fort Lauderdale-based Greenspoon Marder as part of a deal that returns $5.8 million to creditors.
Sibling publication the Daily Business Review reports that after a marathon 14-hour negotiating session, an agreement was reached whereby former Ruden partners will receive up to half of the now-defunct firm's $10 million in account receivables.
The deal also calls for Greenspoon Marder, the lone suitor, to increase its bid price for what's left of Ruden from $5.6 million to $5.775 million. Most of the money will be used to repay Ruden's largest creditor, Wells Fargo, which is owed $4.6 million, according to the DBR. Ruden partners who remained with the firm until the bankruptcy filing on November 1 also agreed to waive their final paycheck in order to close the deal, the DBR reports.
When no other parties appeared at a scheduled auction on Monday to bid for Ruden's remaining assets, it was left to Greenspoon Marder to proceed with its negotiated offer. Ruden's bankruptcy lawyer, Paul Singerman of Miami-based Berger Singerman, said in court this week that at various times ten different firms had been in talks to acquire Ruden. The firm signed nondisclosure agreements with six of those firms, including Cleveland-based Benesch, Friedlander, Coplan & Aronoff, according to the DBR.
Founded in 1959, Fort Lauderdale-based Ruden McLosky once boasted more than 200 lawyers. But a steady stream of lateral departures caused the firm to suffer financially and close offices. The firm had vociferously denied that it would consider dissolving. It responded to the losses by shaking up its leadership and pursuing potential mergers with Benesch and eventually Greenspoon Marder.
Singerman said that in early 2010, Ruden brought in legal consultancy Altman Weil to help expand the firm's efforts to find a merger partner, according to the DBR. In July another unnamed party referred Greenspoon Marder to Ruden and the two began rapidly working on a deal, the DBR reports.
As part of the final accord, Greenspoon Marder will assume $2 million in Ruden liabilities and take on roughly 140 lawyers and staff from the firm, which had 66 remaining lawyers at the time of its bankruptcy filing. If the deal had collapsed, Ruden would have essentially gone out of business and its bankruptcy case would have proceeded to a liquidation of the firm's remaining assets.
Bankruptcy partners R. Scott Shuker and Mariane Dorris of Orlando-based Latham, Shuker, Eden & Beaudine advised Greenspoon Marder in connection with Ruden's Chapter 11 case. Bankruptcy trustee Soneet Kapila oversaw the sale of Ruden to the firm, which, with roughly 140 attorneys, will now be the largest in Fort Lauderdale.Make a comment