Pursuing Greenberg Traurig for Malpractice

There is interesting news out today (see News Articles and the links below) concerning Greenberg Traurig’s role in the Heller Ehrman dissolution last year.

Basically: Greenberg should have run a UCC search when they signed Heller on as a client and should have discovered that Bank of America had cancelled its security interest in the Heller line of credit.  This seems to be a standard practice of most firms in taking on a new client or pursuing a new matter.

It was not until the attorneys for one of Heller Ehrman’s landlords discovered the UCC issue.

So now, not only does Greenberg Traurig seem ripe for a malpractice suit from either the Unsecured Creditors Committee and/or other parties, but should someone be going after any errors and omissions insurance carried by Heller?

Lawyers Beware, Malpractice-Allegation Week is Here! – WSJ Law Blog

Greenberg Traurig Faces Investigation Over Heller Ehrman Representation – The AmLaw Daily

Greenberg Traurig Faces Malpractice Questions in Heller Representation – The ABA Journal

The Morning Wrap – The BLT: The Blog of the Legal Times

Greenberg Traurig in Hot Water Over Representation of Heller – The Recorder via Law.com


2 Responses to “Pursuing Greenberg Traurig for Malpractice”

  1. 1 Former Associate 3 June 2009 at 11:56 am

    Very interesting news. Aren’t there bankruptcy attorneys on (or running) Heller’s dissolution committee? Shouldn’t they (or he) also requested the search. Seems like an egregious omission not to have. I’m curious how far GT’s potential liability could extend. For example, are employees intended beneficiaries of the legal service provided to the firm such that they would be liable to us for the benefits we lost? I suspect GT was also the firm that advised Heller that it needed to provide the WARN Act notices. Had GT not screwed up on the UCC issue, perhaps we would have gotten all of the WARN payments to which we were entitled.

    By the way, the attorneys and others involved in the bankruptcy have already earned hundreds of thousands of dollars in this process. We are likely to ge nothing.

  2. 2 Blogrule 4 June 2009 at 9:37 am

    Spot on: If GT had told HE that the banks did not have a security interest in HE’s receivables and cash, the whole mess never would have happened. Banks would never have called the loans and, if HE still pursued dissolution, it would have used the cash to pay employees first –I’m certain of this: the shareholders wanted to pay employees but the banks refused, asserting their security interest in the cash and receivables…

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