Official News on 401k Plan Freeze

[Note from H.D.: I am not gloating over this finally being issued – I am more concerned about the cryptic language such as “Once the Dissolution Committee is confident that all costs of plan administration paid, the freeze will end.”  So, there is some concern that they aren’t being paid? Haven’t been paid? Will not be paid in the future?  Is this because of the banks having control over the money and an upcoming payment is due?  I think we need more information.]

“As you know, the shareholders voted to dissolve the firm on September 26, 2008. Wind down operations continue under the Dissolution Committee with the employment of most employees ending on or before November 28. The firm’s dissolution on September 26 caused the Heller Ehrman LLP 401(k) Retirement Savings and Profit Sharing Plan to terminate.

In order to assure an orderly termination process and a fair and equitable allocation of costs associated with the plan termination, the Dissolution Committee has decided to temporarily freeze the Plan. During this temporary freeze period, you can continue to access your plan account and change investments through Vanguard. However, effective immediately, no new contributions or loans will be permitted and no withdrawals or distributions requests will be processed. If you have an outstanding loan, your loan payments will continue to be deducted from your paycheck and applied to the loan balance, while payrolls are processed. More details on loan repayments will be available shortly.

Once the Dissolution Committee is confident that all costs of plan administration paid, the freeze will end. You will then need to decide what to do with your plan savings. Additional instructions will be sent to you about your distribution options at the appropriate time.

Remember to visit the Plan’s website at:

Updates regarding the Plan will be posted here where they will be easily accessible to you after you leave the firm.


If you have any questions about this notice, please contact [redacted] or Vanguard Participant Services at 800-523-1188. Additional plan information is available on the Heller Ehrman LLP intranet site.


18 Responses to “Official News on 401k Plan Freeze”

  1. 1 Yet another ex-Hellerite 8 October 2008 at 9:27 am

    The operative term is “on or before November 28.” Bet the under.

  2. 2 anon 8 October 2008 at 9:30 am

    This is completely outrageous. I haven’t been an employee of Heller Ehrman since August, yet my Vanguard account is now frozen. Until this moment, I have felt no ill will towards the partnership, but this is unacceptable. Calling my attorney…

  3. 3 hellerdrone 8 October 2008 at 9:34 am

    Sit tight people

    If anyone does line up counsel, make sure they can handle BK because personally that’s what this smells like.

    Also, for those interested in a class action suit, and there will be many, please sit tight. What can you do to help? If you have any referrals for reputable bankruptcy counsel who can also handle WARN Act, wage claims, and the whole nine yards, please forward them to me. I am handling many calls and emails this morning as you can image and I need to weed out many to find counsel that best represents the interests of staff at Heller.

    I can’t speak for what former Heller staff should do – when I meet with counsel I will ask them if they can handle ex-Heller staff and if not, the best course of action for ex-Heller staff.

    Over and definitely not out, well not yet

    Heller Drone
    Cruise Director

  4. 4 LB 8 October 2008 at 9:41 am

    I need my Vanguard account $$$ now!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Heller is fucking with our life!!!!!!!!!

  5. 5 Helldog 8 October 2008 at 10:26 am

    This smells more like Enron. Why would funds be unavailable? What is going on?

  6. 6 Heller Enron 8 October 2008 at 10:37 am

    At least we staff were not advised (or allowed) to be “shareholders” in Heller stock. It could be worse. For us.

  7. 7 Whitecollarhomeless 8 October 2008 at 11:14 am

    Heller Drone
    I think you are great. One of the most common criticisms leveled at activists is that they are getting people upset and rocking the boat. Its to keep you quiet. You are doing a wonderful job and helping people. Keep on speaking up and keep up the good work.

  8. 8 hellerdrone 8 October 2008 at 11:37 am

    Hey guys and gals

    I took a nice 90 minute break to get away from blogland – and I hope it did me good.

    I was thinking that the stock market can’t get much worse right now. Perhaps one benefit of this freeze is to have the freeze listed at the end of the year perhaps when the Santa Claus effect takes place and the market is higher than it is now. Always a gamble you know.

    Still, I’d rather have the ability to move or not move my 401k money on my terms and not have the decision made for me.

    Over and out
    Heller Drone

  9. 9 Helldog 8 October 2008 at 11:55 am

    I believe our funds are fully protected since they’re held in trust. The freeze is probably just to stop employer contributions and otherwise prepare for bankruptcy. My only concern is what vile litigious actions the Dissolution Cabal may otherwise be engaged in.
    Any lawyer want to weigh in?

  10. 10 Observer 8 October 2008 at 11:56 am

    This is outrageous, and I think illegal. One of the statements on the Vanguard site is ‘you have control’ — not the firm as the plan sponsor.
    NOTE: You can still move funds in your account between investments at Vanguard. If you want to get out of a stock fund and into a Treasuries money market fund, You Can Still Do That.
    This announcement is particularly unfair to people who have already left or been terminated from Heller. HD, somebody (a delegation, or your group attorney) should immediately contact members of the Dissolution Committee and demand that withdrawals by employees who are no longer employed. or now become no longer employed, be allowed to withdraw their funds. (Caution: tax consequences if you don’t roll over to an IRA) Perhaps minus a Small holdback for allocated admin expenses.
    There is no justification for freezing all withdrawals, and — I think — it’s not legal.
    (This move by the Dissolution Committee is not a good reason to push to an involuntary bankruptcy. Things would likely become even more frozen with such an event, and there would be other harmful consequences, such as an immediate move by the banks to stop even payroll funds.)

  11. 11 Observer 8 October 2008 at 12:03 pm

    As Helldog says, your 401(k) assets are held in trust. Those 401(k) funds are not exposed to creditors of the firm (that includes the banks). The only exposure is to allocated share of any admin expenses of the group 401(k) itself. That is, a trust can be surcharged for the direct expenses of maintaining the trust.
    (I too am puzzled as to what Vanguard plan expenses may be at stake on this announcement from the Dissolution Committee. The firm should be current on all plan sponsor expenses. I don’t know what future plan sponsor expenses might be coming due.)

  12. 12 Joe 9 October 2008 at 8:05 am

    From the Heller/Vanguard 401K website (

    “Personal control. You decide how to invest your money or when to make investment changes. You also can borrow from your account to cover emergencies. And should you decide to change employers, you can take your money with you. You’re in control.”

    Funny, I don’t feel in control.

  13. 13 Sorry-ex 9 October 2008 at 12:33 pm

    Considering that the market is down 1000’s of points since 401K’s were frozen – presumable costing HEWM employees millions if not 100’s of millions of dollars – makes me wonder if there is not significant litigation exposure to HEWM shareholders. The argument being, you froze my account (which you admit are not part of HEWM assets) without telling me and once you “unfroze” them my assets were worth 15% less.

    The general market conditions have made this decision even more disgraceful.

  14. 14 Observer 9 October 2008 at 4:42 pm

    Please do remember: withdrawals are frozen, BUT moving your investment from stocks to, e.g., a Treasuries, money market fund was not and is not frozen. Moving your investments within the plan remains a very live possibility. (Whether it’s now too late for market reasons is a completely different problem.)

  15. 15 hellerdrone 10 October 2008 at 3:27 am


    True – but what about ex-Heller employees who called up as of 10/6/2008 and were well within their rights to move their hard earned money into either an IRA within Vanguard or to another plan? I’d say they have grounds for a lawsuit against Heller given who much the market tanked between Monday and today.

    Why should Heller’s ineptness still haunt them after they’ve left the firm?

    Heller Drone
    Cruise Director

  16. 16 po'ed 20 October 2008 at 12:00 pm

    Thought people might like an update on our 401k’s:

    The plan admin is hoping to get it unfrozen within the next couple of weeks. We’ll be notified from vanguard via snail mail. An announcement will be posted on the Plan’s 401(k) website here:

    Loan repayments will likely be due 30 days after the unfreezing, or taken as a distribution. To payoff, call Vanguard to get payoff amount and send cashier’s check (personal checks not accepted).

    Would have been nice to get our vacation pay so we had the $$ to pay it off, huh?

  17. 17 dob 22 October 2008 at 1:55 pm

    Thanks, PO’ed. I was getting sick of calling Carol Budinger every three days.

  18. 18 dob 22 October 2008 at 7:23 pm

    received a Vanguard letter today explaining my rollover options to me – called to check, and the plan is still frozen.

    don’t get too excited unless the letter actually mentions the freeze.

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