Heller Bankruptcy Schedules POSTED

I have posted the Debtor Schedules over in the Bankruptcy section.  You can access the 397 page document here.  Also please realize that I was unable to redact home address information out of this document – after spending several hours this afternoon I came to the conclusion that the document, due to its size, is too unweildy and it was more important to make the information available.

That being said, ex-Hellerites should review the document and see if the amount specified by Heller as the amount owed to them is correct.  I can guarantee that in almost all cases it is not due to the way in which the amount was calculated.  It appears that Heller is not taking into account Waiting Time penalties for California employees (due to non-payment of Accrued Vacation) nor has it included WARN Act monies.

This means most of us will have to file a Proof of Claim (more on that later this week – with complete instructions on how to calculate, the form to complete, where to send, etc.).

Accrued Vacation

Pay attention to Schedule E – Creditors Holding Unsecured Priority Claims which according to the Summary of Schedules totals almost $13.5M.  You may wonder how this figure was determined especially since it represents Accrued Vacation.

As I stated in the comments earlier today on an earlier post, only vacation earned during the 180 days period prior to either (a) the bankruptcy filing or (b) the cessation of business can be counted as a Priority Claim.  Here is my own example:

Despite the fact that I have close to 237 hours of accrued vacation, only the time earned between June 28, 2008 and December 28, 2008 count as Priority Claim.  Which is pretty crappy for me since I was terminated on October 10, 2008.

If we can establish the date on which Heller was considered to have “ceased business” meaning practicing law, and that date is earlier, it will be much better for the employees.  More on that as things develop.

Schedule E Disclaimer

There is a disclaimer for Schedule E listed in the Summary of Schedules.  Here is part of the text:

Amounts listed on Schedule E are preliminary amounts and are subject to reconciliation and amendment by the Debtor. The Debtor’s characterization of these claims as priority claims is preliminary in nature, and the Debtor reserves its rights to dispute or challenge whether such claims are entitled to priority.

The Debtor’s failure to designate a claim on Schedule E as “disputed,” “contingent,” or “unliquidated” does not constitute an admission by the Debtor that such claim is not “disputed,” “contingent,” or “unliquidated.” The Debtor reserves the right to dispute, or to assert offsets or defenses to, any claim reflected on Schedule E as to amount, liability, or classification, or to otherwise subsequently designate any claim as “disputed,” “contingent,” or “unliquidated.” Moreover, the Debtor reserves the right to challenge the amount, nature, and classification of any claim listed on Schedule E.

Finally, as you review the documents, please mention any strange or unusual items you find – do so in the comments on this post.  I’ve already noticed one:  a $22,000 claim for Phyllis Gardner for a travel certificate.

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6 Responses to “Heller Bankruptcy Schedules POSTED”


  1. 1 Observer 26 January 2009 at 8:12 pm

    One immediate fact of note:

    The firm hsa listed total assets of $132 million and total claims of $42 million.

    The claim numbers are almost certainly understated. Even so, if we believed these figures, there would be more than enough money at the end of the day to pay all allowed claims in full.

    At the first hearing in the case, on Dec. 29, the firm’s bk counsel had told the court that they did not estimate enough money to pay all claims in full. I don’t know why the big difference from that day to these schedules. The schedules are more authoritative than that hearing statement by counsel, though.

  2. 2 Former Associate 26 January 2009 at 11:24 pm

    Observer,
    You’d know better than I, but do you think they’re including as an asset the money they paid to BofA, but forgot to include it as a claim? Also, the employee claims must be understated by at least half, or so, considering they didn’t include WARN or CA waiting time penalties.

  3. 3 Observer 27 January 2009 at 1:03 am

    Great questions, FA.

    In the Schedules:

    They show B of A and Citi as having secured claims of “unknown” amount, and disputed. They don’t show the banks as having general unsecured claims. (Citi gets a $4,000 claim for something not in its lending role.)

    On the asset side, they do not list claims against B of A and Citi for return of the $51 million paid prepetition, to go back into the pot. But those claims, which are “avoidance claims” under the bankruptcy code, are not prepetition assets that go on the schedules. They are “asset” that only come into existence because of the claw back provisions of the bankruptcy code, they are contingent in nature, and they are never listed as assets in schedules.

    In the Statement of Financial Affairs:

    Attachment to Item 3b shows payments to B of A pre-petition totaling more than $49 million, made within the last 90 days before the petition was filed. (Payments to B of A prior to Sept. 28, 08, are outside this 90 day period, and also therefore outside claw back reach.) Item 3b’s purpose, in part, is to allow a creditors’ committee and others to consider whether avoidable payments have been made prepetition. Inclusion in Item 3b doesn’t mean that such payments are avoidable, but it does mean that they are in the relevant time period.

  4. 4 Former SF Assoc 27 January 2009 at 1:15 am

    Holy s**t. I have a productive day, I come home, I read this, and my blood starts boiling again. These scum bags are going to try and weasel out of paying us wages due under the WARN act. They admitted over and over, in emails, letters and verbally that they owe us wages through Nov. 28. Yet they aren’t included in the claims. What gives? How dirty are these people? Lawyers are such crooks.

  5. 5 anon2 27 January 2009 at 1:36 am

    I found it interesting that they list the $10,000 stipend they promised each incoming fall associate. FCOL, they admit they should pay employees that never worked a day in 2008, but negligect the employees that are due wages and vacation pay for days worked in 2008. This is absurb!

  6. 6 Starving in Seattle 27 January 2009 at 6:44 pm

    Good Lord Thomas — 237 hours of accrued vacation? That’s a month and a half of vacation time! Why so nose-to-the-grindstone so long?


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