I Hate Mondays

And I’m gonna hate this one – or am I?  Here are your cruise director’s thoughts on the current accrued vacation debacle and what I plan to do on Monday:

1.  Bankruptcy.  I hate to say it, but right now the best thing for the S.S. Heller Ehrman might be bankruptcy.  Please calm down and listen to my argument:

  • Right now the shareholders claim that the bank is calling all the shots.  Not exactly true.  The shareholders have some wiggle room in terms of the cash on hand and the accounts receivable that they expect to collect and where that money goes.
     
  • Realize that in all likelihood, the shareholders – in order to get the line of credit they currently have – had to make some type of personal assurance to the bank, and perhaps even to the landlords.
     
  • The goal of the shareholders is to channel as much money as possible to the banks to pay off the loan to remove their personal guarantee.  
     
  • After they are off the hook, personally, the shareholders are counting on you and me to basically tell them to “f*ck off” and walk.  Businesses play this game all the time.  Mail in rebates are given in the hopes that 50% of the recipients will either forget or not provide a receipt etc. thus the liability to the company is not as much as expected.  Our shareholders expect you and me to throw up our hands and either a) start taking the vacation we’ve accrued so that it doesn’t have to be paid out at the end or b) just take our final check and hopefully go away quietly.
     
  • The shareholders can take the firm into bankruptcy voluntarily which means they’d like to think that they call all the shots, can help appoint a trustee etc.
     
  • If there are any employees who either are a) terminated as of today and did not get accrued vacation or b) are willing to leave the firm and see if they get accrued vacation, I’d like to hear from you concerning a filing to force Heller into involuntary bankruptcy.  Email me at hellerdrone@gmail.com.
     
  • If Heller management is complaining now that their hands are tied, just wait until the firm is in involuntary bankruptcy.  Neither they nor the banks will be able to direct what happens, where the money goes, etc.
     
  • Fully expect the shareholders to then complain that it is the fault of the employees since they forced the firm into involuntary bankruptcy.  Bullsh*t.  We are simply protecting our interests which are guaranteed by law – not trying to weasel out of commitments to save our own *sses.
2. Dissolution Counsel – Echoes of Brobeck? Realise that the counsel secured by Heller management to advise the Dissolution Committee is Greenberg Traurig, the same counsel used by the Brobeck partners to help screw over their own loyal employees.  I know that Heller shareholders hate hearing and seeing themselves compared to Brobeck but if the shoe fits . . .
3.  Shareholders Personally Liable.  Keep this in mind in terms of any type of claim you file against the firm.  Do not list “Heller Ehrman LLP.”  List the shareholders individually beginning with Matt Larrabee.  If you need a list of shareholders currently here at Heller Ehrman please email me at hellerdrone@gmail.com and I would be absolutely delighted to send you the list.  This may apply only in California but it is worth checking this out for all states where we intend to file claims.
4.  Contact Bank of America and Citibank.  I know this might sound a bit crazy, but if you have your personal or other accounts at Bank of America or Citibank, contact them concerning this issue.  Make a fuss.  Threaten to pull your money out – at this time with the credit crisis, they don’t want to hear that.  If someone can provide me with direct contact numbers to those people at Bank of America and Citibank that handle Heller’s line of credit, please email me at hellerdrone@gmail.com
5.  Confront A Shareholder.  And I mean this in the nicest way.  On Monday go to your shareholder or if you are support staff and don’t work for a specific shareholder, go to any one of them and say:
“I want you to know that I am reporting for work today and am available to help the firm wind down its business in an orderly manner.  I don’t understand why you feel that I am not entitled to the wages that I’ve earned.  I am not leaving until I make sure that our clients are taken care of and the business of the firm is taken care of.  I am not leaving early, I will not be forced into taking vacation, I am not walking away.
I am willing to hold you and the rest of the shareholders personally responsible and will do so using every venue and legal option available to me.
I’m disappointed that you and the rest of the shareholders have made certain decisions to protect only yourselves and not to give your loyal employees what they rightfully have earned.  I know you as a person and your past behaviour and the past behaviour of the firm contradicts what is happening currently and I am confused and angry and rightfully so.”
It ain’t over, I ain’t out.
Heller Drone
Cruise Director 
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13 Responses to “I Hate Mondays”


  1. 1 HellerEscapee 3 October 2008 at 7:50 pm

    It sounds like the shareholders should declare both financial and moral bankruptcy.

  2. 2 Observer 4 October 2008 at 12:40 am

    I know you aren’t happy with the shareholders; neither am I. But I think there are a lot of errors in the above post, too many to try to correct. Most simply, if Heller went into bankruptcy (voluntary or involuntary) the banks would still call the shots with respect to cash and accounts receivable. The banks have security interests in cash and AR’s. Unless there is solid assurance that they will be made whole, they can probably prevent any funds being paid out — including funds for the remaining payroll for the period to Nov. 28.

    I know you don’t want to think that the banks have already been generous to allow funds to be used to pay payroll through Nov. 28, and pay rent to keep the offices open during that time. But it’s true, and the banks could do a lot worse to us if they wanted to. So all I’m saying is, don’t go off half-cocked on this stuff.

  3. 3 hellerdrone 4 October 2008 at 4:17 am

    Thanks Observer for your comments. I appreciate them actually and I know that as I write this the following morning, I would need to look back and see if what I actually posted was or was not “too reactive.”

    I don’t think that what I’ve said comes from a position of “going off half-cocked.” Quite a bit of thought and research went into that post as well as editing.

    But not being a bankruptcy or labor expert, one reason why I post is to invite those experts to weigh in with their thoughts and opinions and perhaps offer their assistance to Heller Ehrman staff.

    What I mean to offer here in my posts are more than random thoughts or spewing of the demented mind of Heller Drone. I’ve worked in BigLaw for over 20 years. I’ve been through the Brobeck implosion. I’m simply offering my perspective.

    And I welcome all perspectives as comments too. Thanks again.

    Over and out

    Heller Drone
    Cruise Director

  4. 4 Jayne Loughry 4 October 2008 at 6:53 am

    Observer, the banks would be a powerful voice, but they would not be in control.

    Just from my personal experience, if Heller were to go or be taken into bankruptcy, the shots would be called by the Bankruptcy Court, the U.S. Trustee’s office, and the appointed trustee, (preferably one off the Trustee Panel), not the banks.

    As presumably secured creditors, the banks would of course stand first in line to be paid off. However, employee creditors have a priority, meaning that employees stand at the front of the unsecured creditor line for at least part of what they are owed. (The employee priority amount was $4,600 when we took Brobeck into bankruptcy, but it might be higher now.)

    Presumably the banks are only concerned with getting their money back. By contrast, a bankruptcy trustee would be charged with making sure that the estate of the firm recovers maximum value on ALL of the firm’s assets, that those assets are spent or distributed for the benefit of all creditors as prescribed by law.

  5. 5 Heller Associate 4 October 2008 at 7:01 am

    Now that the initial shock has worn off (yes, fool that I am, I was shocked), I am determined to do something about this. As I see it, the very same banks that received a $700 billion handout have refused to pay us the wages we have earned. To think that the taxes we pay on April 15 will be going into these banks’ pockets is more than I can stand. I would rather emigrate.

    We can try to get what we’re owed through the legal system. But that could take years. So I suggest that you encourage all Heller employees to get in touch with their senators and congresspeople.

    Congress approved the bailout. They cannot allow the banks that are lining up for their checks to deny us ours. I am happy to forward a draft letter I have written if you think it would be helpful.

  6. 6 Jayne Loughry 4 October 2008 at 7:07 am

    One more thought:

    I don’t know enough about the Heller situation to opine on whether or not bankruptcy — voluntary or involuntary — is appropriate. I can say, however, that the memo on not paying accrued vacation looks like a giant red flag to me. I can also say that the single biggest mistake I made during the Brobeck debacle was letting seven months go by before pushing for involuntary bankruptcy– a lot was lost, and a lot of damage was done during those seven months.

    (If Heller does go into bankruptcy, I’ll fess up here to my second biggest mistake.)

  7. 7 Hellarne 4 October 2008 at 3:31 pm

    Nice to see Jane Loughry weighing in. I wonder if there is a Heller cabal? Go to her Brobeck-brockle website to see how ugly it may get at Heller…http://www.brobeckinfo.com/Jayne/index.htm

  8. 8 Jayne Loughry 4 October 2008 at 6:06 pm

    Thanks, Hellarne, but the web site was created by a Brobeck staffer, the great Jim Lewis, who kindly let me post my rants there. (Unfortunately, we were pre-blog.) As for the rest of your comment: I truly never thought any firm could behave worse than the Brobeck partners, but at least we got paid our accrued vacation on termination day. Like the recent Heller memo, the Brobeck partners were saying the bank wouldn’t let them pay us, but they eventually backed down, presumably because enough of them finally got it through their thick heads that failing to pay wages can result in criminal as well as civil penalties.

    HD, a couple of thoughts after rereading your initial post:

    It is curious that Heller’s change of tune came after it retained the Greenberg Traurig firm as dissolution counsel. You’re right that that’s the same firm that Brobeck hired — and used Brobeck money to pay. What you might not know is that once Brobeck was taken into bankruptcy. Greenberg Traurig was hired by a large group of former Brobeck partners to defend them against the Brobeck bankruptcy trustee, who wanted to — and eventually did — recover quite a bit of money from the partners for Brobeck to use in paying its creditors. After a lot of legal wrangling, the trustee succeeded in having Greenberg Traurig disqualified from representing the partners because of conflict of interest, i.e., he didn’t think Greenberg Traurig could flip from representing Brobeck to representing the partners. I read all the motion papers and attended all the hearing: I was pleased to see Greenberg Traurig get busted because my impression was that it had always been taking Brobeck’s money, but really just representing the former partners, i.e., putting the partners’ interests in trying to keep bucks for themselves ahead of the firm’s interest in paying off its creditors. Deja vu all over again?

    Also, HD, I think contacting BofA and Citibank might be a very good idea. As I said above, the Brobeck management and partners said the same thing as Heller’s managagement/shareholders are now saying, that the banks won’t allow them to pay the employees. Maybe that’s true, but maybe not. I can’t say anything about BofA because they weren’t one of Brobeck’s lenders, but I do know some things about Citibank, the lead bank in overseeing Brobeck’s pre-bankruptcy wind-down activities. Through my involvement in the Brobeck employees’ lawsuit, I read all the documents subpoenaed from Citibank, and I attended the deposition of the Citibank honcho who monitored Brobeck’s wind-down (until the banks were paid off). Put simply, I got it from the horse’ mouth that the banks never told the Brobeck managers/partners that they could not use Brobeck cash to pay wages (including accrued vacation) owed to employees. And I absolutely believed and still believe the horse told the truth. As I said, I don’t know about BofA, nor do I know whether the current banking crisis might have changed Citibank’s way of handling things, but I’m doubtful that it has, especially not in regard to a firm that has publicly said the value of its accounts receivables is more than double its debt. So I think a little fact checking directly with the banks might be advisable. And if they won’t talk to you, perhaps they’ll take a call from a reporter.

  9. 9 Living in Hell-er 5 October 2008 at 11:28 am

    One opinion: I think it was Dissolution Committee’s decision to not pay out vacation, not the banks’. The banks released a certain amount of funds to Heller and the Committee controls how the $$ is/will be divyed up. Just another horrible decision to add to the countless others over the past few years. I normally hate Mondays, but this one, most of all.

  10. 10 Heller Associate 5 October 2008 at 12:26 pm

    Heller Drone, I know you mean well and all, and lord knows we feel you as associates, but I think as a matter of strategy, the best course of action would be to wait until we get ALL of our paychecks first (or as many as we can get from now until November 28) and THEN start talking about bankruptcy, suing partners, etc. You don’t want to cut off your nose to spite your face.

    If we rush to rock the boat now we may end up shooting ourselves in the foot with respect to the future payroll cycles that we currently have coming.

    Now, of course, if they stop payments on payroll anytime between now and November 28 (which is currently not the case) then that creates a different situation all together. In that case, by all means, gather up the pitch forks and torches and take the fight to their doorstep.

  11. 11 hellerdrone 5 October 2008 at 12:29 pm

    Heller Associate

    The non-payment may have already started:

    – those who were scheduled to leave this week (meaning they gave notice) where not only not paid accrued vacation but not paid period.

    – those who left after Tuesday, September 30th were not paid.

    – I’ve confirmed this with several Hellerites.

    – it is one thing to withhold accrued vacation, but to not pay a terminated employee the balance of wages due them is another thing.

    Heller Drone
    Cruise Director

  12. 12 Observer 5 October 2008 at 8:44 pm

    Cruise Director: I wasn’t saying you were going off half-cocked. I was just suggesting it would be a good idea, for all, not to do that.
    .
    I’m neither staff nor shareholder; just a soon-to-be-unemployed senior associate. But I have great sympathy for staff, with whom I’ve had an excellent relationship over the years.
    .
    I think for staff’s sake, you need to be sensitive to such hurdles as Corp. Code 16036(c): partners in an LLP are not persnally liable to creditors (that would include staff claims). Suing shareholders, filing an involuntary bankruptcy petition against the firm — these are steps that need careful consideration before anybody steps into them. All I’m saying (and I could be wrong — just as you could be) is those might be counterproductive avenues.
    .
    One aspect of this did catch my eye: Jayne suggested that the banks might not be fully informed of what is not being paid. (I didn’t come from Brobeck, so I am not fully informed about that fiasco.) I tend to doubt that, but — it might be a productive idea for you to work up a delegation to approach the Dissolution Committee and ask them to put you in touch with the banks directly to seek information on their position. I don’t know what the response would be, but I think it would either be useful, or at the least informative.


  1. 1 End of the Day: 10/6/2008 « Heller Highwater Trackback on 6 October 2008 at 2:43 pm
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