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?

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6 Responses to “333 Bush Files Order of Attachment”


  1. 1 Former Associate 23 December 2008 at 12:59 pm

    How does this not put the landlord ahead of former employees? It’s a freakin’ lean on bank accounts AND a/r! The only real loophole is the $500k every two weeks for expenses, but I don’t think that’s intended to cover former employee claims.

  2. 2 Former Associate 23 December 2008 at 1:21 pm

    Also, it looks like the hearing already took place, on 12/19, with all briefing done before then. The docket reflects that the landlord has already filed its bond.

    DEC-22-2008 WRIT OF ATTACHEMENT AFTER HEARING TO SAN FRANCISCO COUNTY , ON HELLER, EHRMAN, WHITE & MCAULIFFE FILED BY PLAINTIFF 333 BUSH ASSOCIATES,NF L.P. A DELAWARE LIMITED PARTNERSHIP 15.00

    DEC-22-2008 BOND #105215374 IN THE AMOUNT OF $10,000.00 FILED BY PETITIONER 333 BUSH ASSOCIATES,NF L.P. A DELAWARE LIMITED PARTNERSHIP EXECUTED BY SURETY COMPANY TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA

    DEC-22-2008 NOTICE OF ORDER RE APPLICATION FOR RIGHT TO ATTACH ORDER AND ORDER FOR ISSUANCE OF WRIT OF ATTACHMENT AFTER HEARING.
    DEC-19-2008 ORDER SETTING BRIEFING SCHEDULE ON RIGHIT TO ATTACH ORDER AND ORDER FOR ISSUANCE OF WRIT OF ATTACHMENT.
    View

    DEC-19-2008 ORDER – RIGHT TO ATTACH ORDER AND ORDER FOR ISSUANCE OF WRIT OF ATTACHMENT AS TO DEFENDANT HELLER, ERHMAN, ET AL
    View

    DEC-19-2008 DISCOVERY 612, HEARING HELD AND TENTATIVE RULING ADOPTED: PLAINTIFF 333 BUSH ASSOCIATES’ APPLICATION FOR WRIT OF ATTACHMENT IS GRANTED IN THE AMOUNT OF $48,025,767. THE UNDERTAKING IS SET IN THE AMOUNT OF $10,000. ORDER WAS SIGNED IN OPEN COURT. COMMISSIONER EVERETT A. HEWLETT, JR. MATTER NOT REPORTED

    DEC-19-2008 MINI-MINUTES FOR DEC-19-2008 10:30 AM

  3. 3 Yet another ex-Hellerite 23 December 2008 at 3:20 pm

    Employee wage claims usually take precedence over attachments and other types of judgment liens, but I’m not sure in this case.

  4. 4 Another Former Associate 24 December 2008 at 3:11 am

    This attachment order has several implications for us:

    1. This opens a bankruptcy window: Heller could remove this lien from firm assets by filing a bankruptcy case within 90 days of the order. Mar. 19 now becomes an important date.

    2. The exclusions from the attachment suggest that there were discussions with B of A counsel to remove opposition from the bank to this attachment order, and that the landlord is not desirous of pushing Heller into bankruptcy (which could undo the landlord’s lien).

    3. Employee claims vs. landlord: Someone above noted that wage claims are prior to an attachment. This is NOT such a situation. Wages are free of an attachment lien only in an ongoing business, where the wages can be paid to keep the business going. If no bankruptcy, the landlord’s attachment lien will make its claim superior to all former employee claims. If there is a bankruptcy but only after Mar. 19, landlord’s claim will have priority over all employee claims, even those amounts given priority over other Unsecured creditors by the bankruptcy code.

    4. If ex-employees want to have some priority over the landlord, and equal priority with the landlord for the non-priority portions of their claims, there needs to be a bankruptcy filing (voluntary or involutnary) by Mar. 19.

    Those are the grim facts of life.

    Oh, and where was NK in all this? Nowhere to be seen. They could have gone in for an attachmdent weeks ago, and put employees ahead of the landlord. If anybody at NK knew how, or why, do to that.

  5. 5 Another Former Associate 24 December 2008 at 3:23 am

    More: The attachment lien may mean that Heller moves expeditiously to file a bankruptcy case. In the bankruptcy, the landlord’s $46MM claim would be reduced to one-year’s worth of rent — I estimate about $7MM. That saving of $39MM is very valuable to achieve.

    There could be negotiations with the landlord to compromise this out in-between those figures. It would be wise of the landlord to go that route, to avoid getting trimmed down by a bankruptcy filing.

  6. 6 Individual shareholders? 24 December 2008 at 1:32 pm

    It seems that the likelihood of getting money from HEWM as an entity is very low at this point. To those in the know about these sorts of things, is there any chance we’ll see cash from individual shareholders and/ or the banks?

    It just seems so wrong to me that the employees who were due wages and vacation pay are being screwed so badly. Too my relatively untrained eye, it seems like the firm is doing all it can to get the 800 pound gorillas off of its back (B of A, Citi, landlords) to decrease the likelihood of individual shareholder liability. Any truth to this? If so, we (former employees owed what I assume is over $10mm) need to become an 800 pound gorilla. If NK can’t help us do that, we should find someone who can.

    My $.02.


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