Heller’s Unsecured Creditors Committee May Sue Banks

Another article of note in the News Articles section is in today’s Recorder: Heller May Sue Over Banks’ ‘Error’ (you will need a subsription account to access this).

Related in the article is some rather testy repartee during proceeds of yesterday’s meeting in the bankruptcy court.  I have posted the transcript over on the Bankruptcy page – click here.

[Correction: unfortunately PACER done me wrong again - the transcript is for the proceedings which took place on December 29, 2008.  There are still some nice tidbits and testy repartee to be found.]

Today’s Cartoon in the Recorder

Several followers of Heller Highwater have pointed out this week’s cartoon over at The Recorder (via CalLaw).

Check it out here.

So who are the people in the doorway? Phyllis Gardner, Matt Larabee and Barry Levin?  LOL.

Heller Ehrman, The Banks and The UCCs – Oh My!

Update – here is the corrected UCC filing by Bank of America:
http://hellerdrone.files.wordpress.com/2009/01/20081001-corrected-bofa-ucc.pdf

Check out the News Articles section today and you will see many stories concerning whether or not the banks involved with the Heller Ehrman dissolution had any standing in collecting the $51 million dollars they did over the past few months.

Expect more news over the coming days and weeks on this issue which is very important.  If the bankruptcy court finds that the banks did not have a secured interest (by filing supposedly “erroneous” UCC forms), they may have to return all monies which were collected during the 90-day period prior to Heller’s Chapter 11 filing on December 28, 2008.

Is this good news?  Yes but not just for the ex-employees at Heller.  It means that the $51 million will go back into “the pot,” as it were, and be available for all creditors.  This means there will be a scramble as to which creditors have priority or more of a claim to that and other monies collected.

Stay tuned.

333 Bush Files Order of Attachment

An update to the ongoing suit between 333 Bush Associates NF L.P., Heller’s San Francisco landlord and Heller Ehrman:

On Friday, December 19, 2008, 333 Bush filed an Order for Writ of Attachment with a hearing on such order taking place today, December 22.

The amount is now down to $48,025,767 according to the filing and on page 2 it states that Defendant Heller Ehrman shall “transfer to levying officer possession of  . . .” , among other things, “Any and all cash deposits, accounts receivable, furniture, fixtures, and equipment held by Defendant or its agents, assigns, liquidation committees, affiliated entities, or creditors.”

In addition, in an attachment to the writ, Plaintiff 333 Bush states that the Order for Issuance of Writ of Attachment does not affect:

“1.  payments made on debt owed as of the date of the Order to Bank America; and

2.  funds as required not to exceed $573,000 every two weeks for winding up operations of Heller LLP.”

And 333 Bush has filed a $10,000 surety bond as is typical in this type of case.

I have questions as to this latest action, namely:

- there is no mention of Citibank, N.A. in the filings.  Does this mean that the Citibank loans are paid off and the Dissolution Committee is on the hook only to Bank of America as of today?

- and does this place 333 Bush’s claims as priority before those of Heller employees that are still owed accrued vacation, WARN Act monies and other wages?

Heller Bankruptcy Imminent?

And what does this mean not only for those of us capsized earlier in the year but those currently still working for Heller Ehrman?

Your cruise director has it on very good authority from sources within Heller that the banks basically emptied out Heller’s bank accounts yesterday.  This was probably done in anticipation of Heller being forced into bankruptcy by various lawsuits – most recently its San Francisco landlord.

We’ll have more information as it develops.

Through A Glass, Darkly

If you’ve been following the latest developments at Republic Windows & Doors in Chicago, and how the employees have decided to occupy their place of employment in protest, you as an ex-Hellerite can definitely empathize with these folks.

The workers at Republic Windows were basically told that the company was losing money, the banks had cut-off the lines of credit, and they were being let go without the 60-day WARN Act notice, without accrued vacation, etc.  Sound familiar?

It appears that this behavior among firms and the banks that lend them money is not unusual: screw the loyal employees, don’t worry about federal and state labor laws, pay off the lines of credit and “we’re done.” 

The workers at Republic Windows have occupied the factory here in Chicago (your cruise director has been living in the City of Broad Shoulders for four years now . . . long story) and seem to have quite a bit of support from friends, family and politicians.  Several of the protest signs have mentioned how Bank of America – which provided Republic’s line of credit – received at least $25 billion as part of a recent “bail out” but can’t seem fit to allow the firm’s owners pay the employees what is rightfully theirs.

We’ve been hearing the same tired line of nonsense from Heller’s Dissolution Committee, Bank of America, and Citibank now since October.  The Dissolution Committee passes the buck to the banks continuously and says “they won’t let us” when it comes to paying employees.  The banks remain silent and play with not only the monies coming in but the day-to-day survival of ex-Hellerites.

While it is a bit late for a sit-in at Heller – and one would be difficult given the various locations – we can finally decide to stop taking the information about “what can and cant’ be paid” at face value.  How is it that these banks can be handed billions of dollars and yet be allowed to assist Heller in violating federal and state laws?  My thinking is that authorizing the payment of what is due ex-Heller employees would put money back in the economy, allow people to make purchases, etc.  Am I the only one seeing this? Or do I look “through a glass, darkly” as the saying goes, and my perception of reality is somewhat imperfect?

As a current Citibank customer, I’ve already registered my complaints and if I weren’t currently unemployed, I would refinance my mortgage with CitiMortgage and pull money from all my accounts (IRA, CDs, Checking, etc.) immediately.  As has been said in past posts, if you are a Bank of America or Citibank customer you might want to contact them.

Some have stated that contacting the banks will not do much good since in their eyes you are “small fish” and you probably can’t contact those handling Heller’s credit lines directly.  Or can you?

Heller Drone has come across the email addresses of those at BofA and Citibank  involved with Heller’s lines of credit.  I will post these and you can decide to do with them what you will.

harvey.fuchs@citi.com

marina.yakolina@citi.com

thomas.e.brown@bankofamerica.com

nydia.miranda-sena@bankofamerica.com

richard.c.linthicum@citi.com

Over and out

Heller Drone
Cruise Director

Bonus for Transition Team Members

To: Transition Team

From: Peter Benvenutti on behalf of the Dissolution Committee

I want to thank each of you for your ongoing efforts helping us with the challenging task of winding up the firm’s affairs. We have developed a Transition Team and you have been identified by the firm’s senior management as a critical contributor to that group. As part of finalizing a retention program for team members, your inclusion in the team has been approved by the Dissolution Committee and our banks.
The most significant part of the agreement is that the firm will pay a retention bonus at the end each team member’s employment with the firm. The bonus will be equal to the team member’s salary from October 11, 2008 until the employee completes their term of employment. Each employee’s “stay period” is being communicated to them by their department management early this week. We are now resolving the final details of the retention packages with the banks. We expect to have those details resolved in the next few days and will be including them in a Retention Agreement for your review and acceptance.

The members of the Dissolution Committee deeply appreciate your commitment and efforts.

Peter Benvenutti