The Firms

December 18, 2008 6:28 PM

Two Lonely Lawyers Left at Dreier LLP

Posted by Zach Lowe

A quick update from the Dreier LLP bankruptcy case based on a filing (available below) submitted today by the firm's receiver, Mark Pomerantz of Paul, Weiss, Rikind, Wharton & Garrison. The most important information concerns the state of the firm's malpractice insurance. We reported last Friday that lawyers retained by Dreier attorneys said the firm's malpractice insurance may have lapsed--a potential disaster, considering that Dreier's 240 or so lawyers might have some liability for the alleged scams of the firm's sole equity partner, Marc Dreier. 

The firm's malpractice insurance hasn't lapsed--yet. The firm owes its insurance carrier, the Chubb Group of Insurance Companies, more than $213,000 in unpaid bills. If that money isn't paid by Dec. 31, the $10 million insurance policy will expire, and Dreier's lawyers could be without coverage (Happy New Year!).

In what may be an understatement, Pomerantz writes that the insurance "is unquestionably a valuable asset of the estate that should not under these circumstances be allowed to lapse." Agreed. 

Meanwhile, only two lawyers remain to handle all the firm's business, along with 15 other employees (presumably staff members). Pomerantz says it's essential that those 17 people stick around; to make that happen, the firm will need to make all the salary and health insurance payments that didn't go through as scheduled on Monday.

In all, Dreier owes the 17 employees $97,165 in salary; the filing doesn't say how much the firm might owe to the attorneys and staff who have bolted its 499 Park Ave offices. Among its other unpaid bills, the firm also owes $160,167 to Oxford Health Plans. 

A judge is scheduled to rule Friday on whether Pomerantz can begin the process of paying off these debts. 

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