Updated Bankruptcy Page

I have added about 30 documents including an updated docket sheet on the Bankruptcy page.  I want to thank all those who answered the call to help out with getting these documents.

I cherry-picked those documents since 12/1/2009 that I thought would be interesting for readers to review.  If you see others documents on the docket which you feel should be posted please let me know and I’ll make arrangements to get them.

Also, it is late at night and I haven’t had much chance to review the new items.  I’d appreciate any analysis from readers – please enter your thoughts in the Comments.

By the way, I do notice that the most recent item is a new appointment to the Unsecured Creditors Committee.

© 2010, copyright Thomas MacEntee

Say What? A Lack of Communication

I’ve been attempting to provide updates as to the status of a possible settlement with the Heller Ehrman LLP estate and the Class Action suit but despite my best efforts, communication seems to be a one-way street as of late.

I just want to say that I am as frustrated as the next ex-Hellerite with the lack of information available especially from Blum Collins which is purporting to represent the best interests of the ex-Heller employees.  I think it is time that I call them out on their recent behavior.

First, ever since the supposed settlement in late October, the lines of communication seem to have shut down.  Now, granted, it may have been due to confidentiality issues related to the settlement but even emailing Blum Collins and asking for an update would be met with silence.

In early January, I and several of the named plainitiffs told Blum Collins that we were not happy with the level of communication and we basically “called them out” on it in private. Despite our best efforts, what appears to be stone-walling continues.

At this point, I really can’t offer much for this site to readers who email me and ask, “what’s going on with the Heller situation?”  I no longer have a PACER connection (someone who could check the docket every few days and send me the filings) but if someone would like to step in I’d appreciate it.  I think we seem to be left to our own devices for getting information.

Why does this matter?  Here’s why:

• I’ve heard from several ex-Hellerites who are desperate for money to the point where they want to settle individually with the Heller Ehrman LLP estate.  I really don’t blame them.

• How would you feel if you worked closely with a firm for several months – even to the derision of your former colleagues who said we didn’t need someone to represent us – and once a settlement was announced (with a big fat attorneys fee included), you can’t even get a response to an email?

• The longer there is silence – especially here on the blog – the more folks think this process has stalled or even worse just imploded like Heller did.  People forget.  The go on with their lives.  They figure they’ll never get the wages and monies that were taken from them.

For all the times that Blum Collins has told me that this blog is a great idea in terms of communication, I keep telling myself, “they just don’t get it.”  Having a blog is one thing.  Using a blog effectively is another.  I signed on with a firm that wants a big chunk of money.  For what?  So I can scramble to get my own info about the status of court proceedings?

At this point, I am not willing to support the current settlement or the representation of Blum Collins any further.  I can’t speak for you as a former ex-Hellerite – each person needs to make their own decision.  You’d think I’d have learned with the Heller implosion not to bend over and get f*cked by attorneys or to trust them again.  I guess I was stupid twice.  Not a third time however.

I’ll probably end up settling for much less than I had expected but I’ve moved on with my life.  I have a new career in a new field with my own company.  I need to keep looking at the glass as half-full but not in a Pollyanna manner.  I don’t have time or resources to waste especially when I feel like I am talking to a wall.

* * *

So there you have it.  I’d appreciate readers’ thoughts in the Comments section.

Over and out.

© 2010, copyright Thomas MacEntee

Heller Ehrman Art Up For Sale at Bonham’s

A faithful reader and ex-Heller employee from San Diego (who is still without employment!), alerted us to the next sale of artwork from Heller Ehrman LLP taking place at Bonham’s in San Francisco on 8 February 2010.

Here is a link to the catalog with all 340 lots and while looking through the works I was able to remember some of my favorites from the San Francisco office.  I also see several Dale Chihuly works which, I assume, were in the Heller Seattle office.

Some works just are begging to be bought and I am seriously thinking that either a visit to San Francisco is in order (I have a thing for paddles – auction paddles that is!) or I might sign up to bid over the phone.

And other works just seem to describe what transpired at Heller, don’t they?

Dogma, 1999
Brian Burke (Canadian, born 1952)

“Ha ha ha! And you should have seen the employees’ reaction when we just shut that mother down!”

Natural Ziggurat, 2004
Yvonne Domenge (Mexican, born 1946)

“The proverbial Heller screw”

Lover of Time, 2000
Stephanie Frostad (American, born 1965)

“Hmmmmm, I wonder what the little people from Heller are doing today . . .”

© 2010, copyright Thomas MacEntee

Signifigance of New Schedule E Filing

I’ve received the following information from Blum Collins regarding why claim amounts  may have changed for some ex-Hellerites with the Amended Schedules Filing a few weeks ago.

Some folks have raised questions concerning the significance of the new Schedule E that the Heller Ehrman estate filed on about December 11, 2009, especially how it came to be that the priority amount for some employees was reduced even though the total amount available for priority payments went up.

The Blum|Collins lawyers have been in contact with Alexa Morgan, who was at Manatt until January 1, 2010 and who is continuing to advise Heller on labor law issues. Alexa has investigated the changes in Schedule E through conversations with the in-house person at Heller who made the changes. Here is what we have learned:

• The new Schedule E was prepared and filed in order that the revised calculations are in compliance with the Bankruptcy Code (the “Code”). Most employees benefited in minor amounts from one global change, but three categories of employees may have been adversely affected by other changes.

• First, on a positive note, the original Schedule E was prepared using December 28, 2008 (the bankruptcy filing date) as the cut off date for calculating the 180-day priority period. The Code allows that the cut-off date be the earlier of a) the last day Heller did business or b) the date of filing. The last day Heller did business was October 31, 2008 so the 180 day priority period was moved back. This change slightly benefited most Heller employees.

• The first category of employees whose priority amount may have decreased are those who continued to work at Heller beyond October 31, 2009 (the last date Heller did business) to assist with the wind down and were paid wages that were earned before October 31 but paid after that date. The effect of these payments is to reduce the amount of the priority portion of the wage claim by the amounts paid on account of the priority portion actually paid. In addition the claims of retained employees were adjusted to accurately reflect pre-petition vacation used or paid after Heller ceased doing business. The precise calculations are more complicated than this description, but this is the substance of what happens.

• The second category of potentially adversely affected employees are those who have sabbatical claims. Heller originally treated all sabbatical claims as priority claims but it since has learned that only sabbatical amounts that vested within 180 days of October 31, 2008 are entitled to priority status. That is consistent with the Blum|Collins construction of the Code. That change could have a significant impact on a few employees with accrued but unused sabbatical.

• A few number of employees are in a third group that may have had small changes in their priority amounts because of the way in which claims for wage priorities integrate with claims for pension plan priorities. The Blum|Collins lawyers have not attempted to get to the bottom of this because of their understanding that not many employees are affected and that the priority amounts involved are relatively small.

The Blum|Collins lawyers will try to get more information for anyone whose priority amount was significantly reduced after you have tested the reduction against this additional information. Heller’s interest and ours is identical:  that all employees be paid what they are owed under the Bankruptcy Code and our settlement, so we will keep pushing to make sure that is happening.

© 2010, copyright Thomas MacEntee

Amended Schedules Filing

I’ve received several phone calls and emails and have also seen comments to previous posts referencing a “packet” received from Stang Ziehl & Jones LLP by some ex-Hellerites.  In it is a copy of several filings including Amendment To Schedule E and Amended Summary of Schedules.

Here is the information I can provide right now on the packet:

The lawyers at Blum/Collins became aware of the amended schedule when it was filed, observed that the total amount of priority claims went up from the prior schedule by a small amount, knew that the debtor can’t acknowledge liability for WARN act claims until the settlement is concluded and were not concerned. They are getting to the bottom of why exactly there has been an amended filing, but their preliminary investigation suggests that the changes are a consequence of arithmetical changes in the calculations for some employees and that decreases for some, and increases for others, are nothing more than a reflection of those changes.

Because of the holiday period the Blum/ Collins lawyers expect that they will not have more information until some time after January 1.

© 2009, copyright Thomas MacEntee

Update on Schelle Simcox

Tomorrow morning – December 21st – Schelle will be undergoing surgery as part of her cancer treatment.

Please take a minute to visit her journal at Caring Bridge – http://www.caringbridge.org/visit/schellesimcox – and send her a note, your good wishes, your prayers, your thoughts.

Thanks

© 2009, copyright Thomas MacEntee

Update on Class Action Suit and Settlement

It has been a rather quiet few weeks and we’ve received several inquiries as to the status of the Class Action suit and the proposed settlement. In addition, you may have noticed several news items this week which mention negotiations with the junior shareholders.

Here is what we can report after checking in with Blum Collins and reviewing the recent articles:

• Back in November, at the initial hearing for the Court to consider the Class settlement and approve the Notice to the Class, Judge Montali asked that the Notice be reviewed by the parties and edited for completeness and clarity, based on comments that were made at the hearing. At that time the parties anticipated that it would take only a few days to submit a revised Notice.

• In the meantime, the Heller Ehrman estate has been in negotiations with the shareholders to settle the estate’s claims against shareholders. Shortly after the November hearing, Judge Newsome, who is handling the mediation with the shareholders, asked Judge Montali to delay any decision on the proposed Plan of Reorganization and Disclosure Statement while settlement discussions continued. Judge Montali agreed and postponed indefinitely any further action on the Plan. Because adoption of the Plan was an integral part of the Class settlement, that made it necessary to address the delay in the Plan in the context of timing of approval of the settlement and payments to be made under the settlement.

• It appears that a settlement has been reached with a large group of junior shareholders, while negotiations continue with the higher income Heller Ehrman shareholders.

• While we had hoped we would see a partial payment of the settlement amounts by early January, the process is delayed because funding of those payments comes in part from the settlement with the shareholders. The Blum Collins lawyers have asked for a deadline for payment of priority claims, and the response has been encouraging but the Heller Ehrman estate is waiting for more definitive progress in the negotiations with the shareholders before agreeing.

• The review process and the changes in the proposed settlement to accommodate the delay in approval of a Plan are not expected to result in any substantive changes in the terms of the settlement reached on behalf of the class members by Blum Collins. Put another way, the benefits the class members will receive will not change but the procedures for and timing of payment has been modified because Plan approval has been delayed. The delay results from the decisions of Judge Newsome and Judge Montali to try to get a better Plan in place and the fact that funding of the settlement depends on funding of a Plan.

• The next step is to go back to Judge Montali to gain preliminary approval of the settlement and approval of Notice to the Class. The only thing that is delaying that process now is hearing from the estate regarding a deadline for funding the settlement. Judge Montali’s approval of the Notice to the class will start the process for class members to review the terms of the final settlement and decide whether accept the settlement or to opt out and pursue their claims individually. Based on the report from Blum Collins lawyers, we continue to believe that the terms of the settlement, while not perfect, are much better than we could have done without the extra clout of having filed a class action.

• Several of you have asked on the blog whether or not employees other than Blum Collins clients will get the benefit of the settlement. The answer is that all employees, even those who did not file an individual proof of claim, will be entitled to participate in the settlement. The Notice to the class, once approved by Judge Montali, will spell out these and other details.

That’s all we can report right now. If there is any breaking news, be sure that Heller Highwater will report it.

We may not have word on any activities until after the first of the year. Until then have a happy holiday!

© 2009, copyright Thomas MacEntee

Heller Settles With Junior Partners

It appears that the Heller Ehrman estate has settled with the more junior shareholders according to a story in The Recorder and on Law.com.

Heller Creditors Pencil Deal With Junior Partners (via LegalPad)

© 2009, copyright Thomas Macentee

When Did The S.S. Heller Start Sinking?

According to a new article in The Recorder this morning, the matter of when exactly the S.S. Heller started sinking is up for debate.

Read it here: Heller Leaders Saw Failure Looming, Documents Show

Summary of Financial Status as of October 31, 2009

Thanks to a fellow ex-Hellerite for passing along this Heller 103109 Summary of Financial Status.

© 2009, copyright Thomas MacEntee