A $50 Million Shake-down?

Update –  It appears that The Recorder has picked up this story:
Former IP Client Goes After Heller for $50 Million

If you’ve checked out the Claims Register over in the Bankruptcy section lately, you’ll see a claim for $50 million filed by Ronald A. Katz Technology Licensing, L.P.

What’s this all about? And why does one claim seem to represent almost 50% of the current claims? Well it appears that Mr. Katz was a client of Heller Ehrman and has been termed a “patent troll” for his litigious nature when it comes to his patent portfolio.  You can read more about RAKTL here.

And if you read Memorandum of Points and Authorities in of in Support of Motion for Order Authorizing the Filing Under Seal of Documents filed recently in bankruptcy court on behalf of RAKTL, you realize that Mr. Katz is claiming breach of a legal services agreement with Heller Ehrman which is the basis for his $50 million claim.

It appears that Mr. Katz tried to shop his legal needs to the shareholders who went to Covington & Burling but was conflicted out on many of the matters.  And while RAKTL has found a new legal home, isn’t it a bit galling that he not only wants to do the “shake-down” on the Heller estate in the same manner in which has has dealt with much of the Fortune 500 – but he wants all the legal work Heller has done (on contingency) to go to a new firm without paying his current outstanding bills?

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13 Responses to “A $50 Million Shake-down?”


  1. 1 anon 28 April 2009 at 9:03 am

    I wouldn’t call this a shakedown at all. Free advice: tone this post down.

  2. 2 anon2 28 April 2009 at 11:56 am

    Really, how much money does one person need?

  3. 3 ex-associate 28 April 2009 at 4:45 pm

    I always knew that stupid case was going to bite everyone in the arse. It was bad news from the very beginning and Heller should never have taken it. (It’s a good idea to become adverse to dozens of Fortune 100 companies? Really?) We used to joke in the office that Katz was like the opposite of King Midas — everything it touched turned to complete crap. Here’s to hoping we all dodge this bullet.

  4. 4 123 28 April 2009 at 5:37 pm

    Free advice is worth exactly what one pays for it.

  5. 5 Anon 29 April 2009 at 12:26 am

    consider this: Katz was actually a “conflict,” legal or perceived, that caused indigestion for several of Heller’s potential merger partners. In essence, Katz prevented more than one merger.

    The fact that the relationship partner, Haslam, went to Covington with others, triggering the covenents in the financing facilities that heller had with the (arguablly unsecurred) banks that caused the need to disolve/file for BK, is curious especially in light of the reported inability of the successor firm (covington) to handle the various actions. So….in essesnce Haslam et al, saddled the heller estate with a substantial contingency accounts receivable that is proving not only un-collectable, but has turned back on the estate in the form of a claim for almost half of the total claims?

    amazing.

  6. 6 Sad in San Diego 29 April 2009 at 5:11 pm

    I may have to change my name to furious in SD! We use to joke about Katz being the biggest pro bono case in the firm.

  7. 7 Observer 29 April 2009 at 10:29 pm

    PNC Real Estate Finance put in a claim for $105 million. Anybody know what that one is about?

  8. 8 Former SF Assoc 30 April 2009 at 12:50 pm

    Hopefully Mr. Katz will also be suing Messrs. Haslam, Fram, Plimack, etc, etc, etc. over at Covington. I mean, that is after all where the real money is.

  9. 9 Curious 30 April 2009 at 1:54 pm

    What is the signficance (if any) of all the different Heller offices being listed on the Claims Register with amounts of $0??

  10. 10 Curious2 30 April 2009 at 7:49 pm

    Will there be an updated Claims Register? The Latest one in the Bankruptcy section is dated April 28, 2009. Thank you.

  11. 11 Former SF Assoc 1 May 2009 at 1:53 pm

    I have to say that this claim by RAKTL makes things very interesting. If the Recorder article is correct re the Boxer case, might there be a compaint (or whatever it is called in bankruptcy court) filed against the Covington shareholders and Covington itself by the Heller estate? Those guys thought they were getting out of a burning house before the walls fell, but maybe not after all? It would be really nice to see them (Covington partners) dragged into this mess, as it was partially their fault the firm collapsed and up until this point, they seemed to have emerged unscathed. Oh, schadenfreude.

  12. 12 Former Hell er Ass ociate 8 May 2009 at 2:17 pm

    That Covington “conflict” makes no sense to me. Wasn’t that Katz client the main reason why Haslam et al. were perceived as so valuable? If so, how could they have agreed to go to Covington before actually sorting out the conflict?

    Either there was no conflict and something happened to cause Katz to part company with Haslam et al, or Haslam et al knew there would be a conflict in going to Covington so as to disentangle themselves from Katz. Which is it?

    And the successor firm — Cooely — what a bunch of morons! Are they that desperate that they need a patent troll’s work?

  13. 13 ex-associate 8 May 2009 at 8:17 pm

    From what I hear it’s actually a fees issue and not a conflict. I know for a fact Covington worked on Katz after Haslem et al got to the firm. To nobody’s surprise, a fee-related issue popped up and this suit is Katz’s way of not having to pay the fees he incurred at Heller.


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