Heller Bankruptcy Schedules – PENDING

Heller has filed its schedules with the bankruptcy court – there are over 300 pages of exhibits and I in the process of posting them in the Bankruptcy section as I write this.  More soon.

In the meantime check out Heller’s Statement of Financial Affairs as filed with the bankruptcy court today as well as an notice of appearance by a group of Heller Ehrman retired shareholders.


13 Responses to “Heller Bankruptcy Schedules – PENDING”

  1. 1 Former Associate 26 January 2009 at 3:01 pm

    I’ve only skimmed the statement of financial condition, but I’m struck by how much money the Delusional Committee has earned during a three-month period:
    Sugarman: ~$95,000
    Loacker: ~$92,000
    Hayden: ~$200,000!!!
    Benvenutti: ~$170,000

  2. 2 Former Associate 26 January 2009 at 3:28 pm

    The schedule of claims (on Pacer, not yet on here) only includes vacation amounts (and hours bonuses, where applicable). It does not include WARN Act severance or waiting time penalties due under CA law. Unless I’m reading things wrong.

  3. 3 Thomas MacEntee 26 January 2009 at 3:32 pm

    Former Associate

    You are correct – and as I had predicted, these amounts will mean most of us will have to file a Proof of Claim.

    Interesting on on which portion Heller claims is priority: it is the vacation EARNED during the 180 day period prior to the bankruptcy filing or prior to the cessation of business. This is an important difference.

    For many of us, like me, terminated on October 10, 2008 – I did not earn any vacation from 10/10/2008 – 12/28/2008. So using the filing date 12/28/2008 is not as good for me (means I can only claim 6/28 – 10/10/2008) as a cessation of business date. But how is that determined? Is it when Heller made the dissolution announcement? Or is it when they stopped practicing law and billing clients? And when would that be?

  4. 4 anon2 26 January 2009 at 4:01 pm

    I thought all wage claims are capped at $10,950 in BK. Even if we add up all the amounts we SHOULD get, we’ll all cap at $10.950. Correct?

  5. 5 Thomas MacEntee 26 January 2009 at 4:04 pm

    Anon 2 – here is how I see it and know it to be:

    Unsecured creditors have a $10,950 cap on PRIORITY portion of their claim. You can still have a total claim of more than $10,950. If your priority portion is, let’s say, $11,000, then $10,950 would be priority and $50 would be non-priority. It doesn’t mean that you lose any of your claim.

    One area that has not been dealt with: where do WARN ACT monies lie? Are they priority or perhaps even administrative claims?

  6. 6 Observer 26 January 2009 at 5:22 pm

    Tom is correct: The wage cap limits how much of your claim is in the priority category. But everything else in your claim becomes a general unsecured claim.

    WARN Act claims will not be administrative, unless you worked at Heller after Dec. 28, 2008. (i.e. not us)

    There are bankruptcy cases that say the WARN Act claims are entitled to be counted in the priority portion of a claim. I haven’t confirmed whether that is the law in the Ninth Circuit.

  7. 7 anon2 26 January 2009 at 5:31 pm

    Ok, now I understand. Thanks for the clarification. I think this is going to become quite a protracted issue.

  8. 8 dob 26 January 2009 at 8:11 pm

    I googled for 5 minutes and found a 9th circuit BK case from 2003 where waiting time penalties were levied as administrative costs, fwiw. Not sure if it is the current law however.

  9. 9 dob 26 January 2009 at 8:17 pm

    Scratch that, they were postpetition wages in that case, which is clearly different.

  10. 10 Observer 26 January 2009 at 9:53 pm

    Exactly. To have an administrative claim for wages, you must have worked post-petition.

  11. 11 Observer 26 January 2009 at 9:56 pm

    The most interesting single fact in the schedules is they have listed $132 million in assets and $42 million in claims.

    Claims are almost certainly understated. But if those figures are anywhere near correct, there would be enough money to pay all allowed claims in full.

  12. 12 Former Associate 27 January 2009 at 12:59 pm

    Has Heller overstated its AR or WIP in the schedule? I seem to recall a BK court pleading in which Heller said it had about $50M in AR/WIP with an expected realization of about $35M of it. Now that number seems to have gone up by $20-30M. While the first number may have been an estimate, it seems to have been way off (not that that would be a new thing).

  13. 13 Observer 27 January 2009 at 4:29 pm

    AR is listed in the schedules at $76 million. Up from what we saw in an earlier pleading, but not by as much as you think.

    The rest of the $132 million of assets is other things, such as the firm’s interest in the multi-firm co-owned malpractice insurance carrier ($7 million stated value). There is $20 million or so of monies owed to the debtor by Heller foreign office entities. I don’t know how recoverable those amounts are.

    Bk schedules are somewhat like any other financial statement of a distressed company; you have to read them with an eye to what can really be realized.

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