Why I Joined the Class Action Suit

I wanted to explain why I’ve signed up with Blum Collins and the rest of the class action suit people – not that I need to give an explanation.  But I think when you make a decision as to whether or not you want to sign a retainer agreement or whether or not you want to opt out of the class, it helps to hear the thoughts of others on the subject.

First, I want to let you know that you need to make your own decision as to how to proceed and no one should be criticized for joining or not joining the suit.   All ex-Hellerites have different levels of investment with the aftermath of the collpase of Heller Ehrman.  Some of us, like me, are sitting on 236.5 hours of accrued vacation.  Some of us may very well just walk away from the entire process and decide to move on.  The decision is your as to how you want to pursue – or not pursue – what Heller owes to you. 

Second, as I’ve said before, I’m not going to state specifics of the strategy that Blum Collins intends to pursue.  I will say, however, that it is quite comprehensive and several recovery venues will fall outside of the bankruptcy claim filing process.

Third, am I concerned that Blum Collins will get xxx% amount of what is recovered?  Not really and here is why: if I didn’t sign up with Blum Collins I’d be left to only filing my proof of claim and waiting for the money, eventually, to find its way to me.  I would be taking a passive, not active, role in the process.  Also, I know that the named plaintiffs were able to negotiate a very favorable tiered fee structure with Blum Collins.  And, since Blum Collins is already handling the Thelen, Reid case (with that firm dissolving but not yet being in bankruptcy), there are certain efficiencies built in to also handling the Heller Ehrman suit.

There is a cost to pursuing this type of suit and since I feel I will be able to recover a nice amount besides the proof of claim process, to me the cost is worth it.  I know from working with Blum Collins that they are aggressive about going after every possible venue to recover money for the estate and to make sure that the ex-employees are first in line for that money.

Finally, could I just walk away from this entire process if I wanted to?  I guess ultimately I could, but according to my calculations Heller owes me over $33,000 by time I factor in accrued vacation, WARN Act monies, penalties etc.  Plus it is my belief that the banks – Bank of America and Citibank – bear partial responsibility for the collapse of Heller Ehrman – and will owe not only the money they recovered from Heller (to which they incorrectly asserted they had a perfected security interest), but they will also owe damages to the employees. 

If you think about it, not taking into consideration the current economic crisis and assuming that Heller management would have simply made staff and attorney cuts in line with current layoffs at Latham & Watkins and other firms, wouldn’t Heller still be in business were it not for the banks? 



5 Responses to “Why I Joined the Class Action Suit”

  1. 1 P-Owed 3 March 2009 at 7:51 pm

    Thanks for the post re Blum Collins.
    Is it safe to say that members of the class action, if successful, will recover at least the same amout (if not more) of monies owned them than if they opt out of the class and rely strictly on the bankruptcy proceeding?
    I understand the contingency fee must be accounted for but am just wondering if class members will make out better, and importantly, faster, than ex-Hellerites in the bankruptcy.

  2. 2 Anon 4 March 2009 at 4:29 am

    I don’t think anyone can tell you that, no matter what others (including HD) may say.

  3. 3 Former Associate 4 March 2009 at 11:45 am

    I’m still up in the air, but, to me, BC’s role in the Thelen case means the contingency fee should actually be lower. The fact that BC may encounter some “efficiency” from rep’ing both groups of plaintiffs means they’re going to get paid twice for the same work (or at least some of it). I’m not trying to discourage anyone from signing on if they’re interested, but that is one factor that has kept me from doing so.

  4. 4 Travis Bickle 14 March 2009 at 1:29 pm

    The amounts Heller has stated in its creditor schedules are grossly understated. Given that Heller does not recognize their obligations to make WARN or severance payments, can someone give me the reason(s) why an ex-employee would NOT join the class action to recover everything owed to him/her?

    I understand that Blum Collins would take their cut of the recovery but other than that, why should I NOT join the class?

  5. 5 Anon 16 March 2009 at 4:23 am

    Travis, one reason not to join is that under bankruptcy law Blum Collins is prevented by the automatic stay from suing the firm To get a better recovery than a proof of claim, they will have to sue third parties such as former shareholders, or the banks. Not clear to me how well they will succeed with that.

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