The Firms

August 27, 2011 12:17 AM

Ex-Howrey Chair's Salary For July: $113,000

Posted by Sara Randazzo

Robert Ruyak's law firm may be bankrupt, but the former Howrey chairman and CEO collected $113,191 last month, according to a summary of expenses filed Thursday by the defunct firm's estate.

The payout to Ruyak is one of several notable items listed in the summary, which also includes details about several cases and clients on the firm's docket before the firm dissolved. Howrey was pushed into involuntary Chapter 7 bankruptcy in April and converted its case to a voluntary Chapter 11 filing in June.

The July report shows that the estate has assets totaling $53.8 million—including $5.6 million in unrestricted cash—against unknown liabilities, a substantial change from the $138.7 in assets and $107 million in liabilities recorded earlier this year

Ruyak, who sits on the firm's five-person dissolution committee, did not respond to an e-mailed request for comment. Other members of the committee received more modest payments in July, the filing shows. Arent Fox, home to committee member and former Howrey partner Martin Cunniff, received $31,845. Committee member Gary Fischman received $11,750.

The estate's liabilities include more than $1.9 million in unpaid professional fees, according to Thursday's filing. The Am Law Daily reported on some of those fees here and here.

Meanwhile, with Howrey having already staged a well-attended Washington, D.C., auction of its office furniture and equipment auction, the firm's estate now appears set to put firm-owned artwork on the block, according to the July filing.

The firm lists art valued at $1.2 million among its assets. One sign that those assets, which were originally purchased for $734,500, will be sold off: July payments of several hundred dollars apiece to a pair of art services companies, according to the monthly operating report.

Selling artwork has proven worthwhile for other troubled law firms. Dreier LLP, the firm founded by disgraced attorney Mark Dreier, sold its art in 2010. The bankrupt Heller Ehrman firm earned half a million dollars with an art auction of its own that same year.

Thursday's court filing also carries hints of cases still lingering on the Howrey docket. For example, firm partner Stephen Hill and attorney Collette Harrell, who have worked for several years on a discrimination class action brought by Hispanic farmers against the U.S. Department of Agriculture, received payments of $1,357 and $5,570, respectively, last month.

At the heart of that suit are the Agriculture Department's admittedly discriminatory lending practices toward non-white farmers over the years. While the federal government has already paid more than $1 billion to Indian and black farmers asserting similar claims, the Hispanic farmers have not yet finalized a settlement in their action. (Hoping to bring attention to the case, Howrey paid $1,000 to a public relations firm in July, according to the operating report and the owner of that firm.)

The report also shows that the Howrey estate is seeking the court's approval to collect $1.5 million in contingency fees awarded in a matter it took on in 2006 for North Sea Investments Inc. The case, which involved the sale, lease-back, and subsequent loss of a drilling rig, was resolved August 22. A hearing to consider the fee is scheduled for August 31.

On another front, Howrey continues to wrestle with its Washington, D.C., landlord. The estate sued Warner Investments on August 19 over how much it owes on its former headquarters at 1299 Pennsylvania Avenue. Howrey contends it renegotiated a new lease with Warner in April that would make the estate liable for just $586,757 in rent from April through December 2011—significantly less than the $7.7 million the landlord claims it is owed.

At a July hearing in San Francisco federal bankrupty court, Judge Dennis Montali ordered Howrey to pay Warner $468,000 to cover rent for June, July, and August. That payment has been made, according to the July operating report.

Howrey recently signed a lease for a new space at 1201 Pennsylvania Avenue, court documents show, and is in the process of vacating the Warner space.

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Looks like the implosion hasn't made a dent in Mr. Ruyak's pocket book.

Oh, look, it's a fire sale! My favorite kind of sale.

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