Updates on Settlement and Plan of Liquidation

Just a quick note to say that I will be working with Blum Collins and the feedback from others to try and develop an FAQ posting or section about the settlement.

There are lots questions which must be answered, both for those who have signed on with Blum Collins and those who are uncertain as to whether or not they should opt out during the class certification process.

I just ask for your patience since I want to make certain that the information is as comprehensive as possible as well as accurate.

My goal is to have this information available by Tuesday or Wednesday this week.

Over and out.

© 2009, copyright Thomas MacEntee

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13 Responses to “Updates on Settlement and Plan of Liquidation”


  1. 1 Anon123 18 October 2009 at 12:39 pm

    Am I understanding the settlement right in that Blum will get paid by the estate and that therefore will not take their contingency fees out of the individual awards? If so, good for the class members, bad for anyone else. I can see why some non-class members might be a little uneasy with that arrangement, especially given that the class members do not seem to being getting a materially different or better result.

  2. 2 Former Associate 18 October 2009 at 9:21 pm

    I’m looking forward to seeing my Exhibit A to see what the firm proposes I take in settlement of my overall claim (discounted, of course, by the pro rata share in the estate we ultimately get).

    Once I see that, I will know how much is at stake to fight over. Fro example, I think the firm really blew the procedure on the WARN act issue. I recall partners talking about WARN in the hallways for weeks before the WARN notice was actually given. More importantly, once the notice was given, it failed to invoke any of the potentially available exceptions. There is case law in which courts have resolved AT THE MOTION TO DISMISS STAGE whether a WARN notice effectively invoked the “faltering company” or “unforeseeable circumstances” exceptions. Go look at your WARN notices. It’s not there. Nor is it in any of the emails the firm later sent. Sure, they said we were being fired early because the banks cut off their funding, but they never said it was unforeseeable–nor could they, given that the firm must have known that they were on the verge of triggering their loan defaults for months. Nor does it explain that notice would have been given sooner, but there was a concern that doing so would have jeopardized the ability to raise capital (that’s the other exception). Are you telling me that any firm that we were going to potentially merge with would have cared if Heller was going to lay off a bunch of people? I believe all the merger candidates actually did lay people off after Heller went under.

    In short, I think the firm blew its opportunity to invoke the WARN Act exceptions. I believe this was while Greenberg Traurig was representing the firm, so I would add the WARN Act claims to the allowed claims column, and add that total into the amount for the estate to pursue against GT. Just my thoughts.

    But like I said, I’ll have to see Exhibit A to know specifically how much I’m being offered before I decide whether to settle or not. If there’s not much there after the pro rata reduction and taxes, etc., then it might be worth fighting for the whole enchilada.

  3. 3 Former Associate 18 October 2009 at 10:01 pm

    And, of course, thanks so much to you Thomas for hosting this forum for all of us to stay in touch.

  4. 4 Observer 18 October 2009 at 11:24 pm

    TRICKY NOTICE ALERT

    Here is what the October 8 notice of hearing on disclosure statement says:

    “The Disclosure Statement and Plan have been distributed concurrently herewith in accordance with Bankruptcy Rule 3017(a) and Bankruptcy Local Rule 3017-1(a). Any party in interest may obtain a copy of the Disclosure Statement or Plan by submitting a request in writing to counsel for the Debtor at the following address: Pachulski Stang Ziehl & Jones LLP, 150 California Street, 15th Floor, San Francisco, CA 94111, Fax: (415) 263-7010, Attn: Liset Alvarado, or liset.alvarado@pszjlaw.com.”

    You might read “have been distributed concurrently herewith” as meaning that copies of the disclosure statement and plan are in the mail to us as creditors. But that turns out to be false. Rule 3017 says that, at this stage of hearing on the disclosure statement’s adequacy of information, the disclosure statement and plan are required to be be served Only on the U.S. Trustee, the SEC, and members of the Creditors’ Committee! All others (that’s us) are in the category of “may obtain a copy” by requesting it in writing.

    So, to get the full documents, you need to contact Pachulski Stang (either with a letter or via an email to Ms. Alvarado) right away.

    I’m annoyed with many people over this notice trickiness. The creditors’ committee, supposedly representing all of us (along with the rest of the creditors), should not have let a notice that is jointly in their name go out without making clear and explicit whether we were getting copies, or we had to request them. The debtor, seeking our sign on to the compromises contained in the plan, should have taken care to make the notice clear. Blum Collins should have let class members know (on this web site if no other way) that we had to request copies of the documents. Reference to a rule that few creditors know, together with the language “distributed concurrently herewith,” was — I think — inherently misleading.

    (The rule is different when it comes to a later stage — plan confirmation. At that time, they will be required to mail all of us copies of the plan and disclosure statement. But our chance to object to the adequacy of the information, and clarity, in the disclosure statement will have gone by.)

  5. 5 P-OWED 20 October 2009 at 12:39 pm

    Thomas,

    I am sure you will cover this in the FAQ you are working with Blum Collins to put out, but can you give us an indication as to approximately when the class members will receive payment (assuming settlement is final/complete)?
    Thanks.

  6. 6 Thomas MacEntee 20 October 2009 at 1:19 pm

    Observer

    I too was intrigued by the notice situation. So one of the Heller Ehrman ex-employees contact Pachulski Stang Ziehl & Jones LLP to get the documents. They seem to be the exact same documents already posted here at Heller Highwater. I am working to have this issue clarified in the soon to be published FAQ document here on this site.

  7. 7 Former SF Employee 20 October 2009 at 6:03 pm

    Correct me if I’m wrong but the period of time to be a part of the class action lawsuit against Heller has passed.

    I submitted an individual claim against Heller with the bankruptcy court of SF.

    If it’s not too late to join, how would one go about it?

    And what was the percentage of an individual claim going to Blum Collins?

  8. 8 Thomas MacEntee 20 October 2009 at 6:13 pm

    The deadline to become part of the class action suit HAS NOT PASSED. The deadline for filing a Proof of Claim with the bankruptcy court (which was April 27, 2009) is unrelated to the process of certifying a class for the class action suit.

    I will be posting a “timeline” later tonite or tomorrow which will outline upcoming dates and deadlines. All ex-Heller Ehrman employees will receive a letter informing them of the right to “opt out” (meaning you don’t want to join the class action) and you will need to communicate your desire to “opt out” in writing. Otherwise you do nothing and it will be assumed you do want to be part of the class action.

  9. 9 Observer 20 October 2009 at 7:38 pm

    Pachulski Stang should be providing more documents (esp. Exhibit A to the proposed settlement agreement) than they have. I’m going to push them about that, and see what they have to say.

    We cannot be expected to view such incomplete information as we have so far seen as “adequate disclosure” under the Bankruptcy Code.

  10. 10 NY SECY 23 October 2009 at 9:43 am

    Hi all, when will we know exactly what the settlement offers are, individually, not as a whole? I was under the impression Blum Collins would be mailing the necessary documents. Am I wrong? If I am wrong, it seems to me that Blum Collins should be sending us the information we need. We shouldn’t have to go looking for it. We cannot possibly make a decision without knowing all the details. I have not heard or received anything from Blum, which has me perplexed. If it weren’t for this site, we probably wouldn’t know what little we do know. Thanks!

  11. 11 Thomas MacEntee 23 October 2009 at 9:47 am

    Hi NY Secy

    This issue is still being hammered out, given the 7-page letter from Judge Montali (see http://legalpad.typepad.com/my_weblog/2009/10/heller-judge-to-lawyers-your-plan-is-a-mess.html).

    But this is certain: when you are mailed Schedule A, it will only be your claim – not a list of everyone’s claims. That list will be filed under seal since it deals with wage and salary information for each person.

  12. 12 Former Associate 23 October 2009 at 10:33 am

    Divide and conquer? Shouldn’t we have a right to know how the firm is proposing to deal with its assets vis-a-vis other creditors? How can I make an informed decision about my own offer if I don’t know how it compares to others similarly situated to me? I understand the privacy aspect, but those of us who filed individual proofs of claim had to reveal some pretty personal information (e.g., my salary is now available in public records).

  13. 13 NY SECY 23 October 2009 at 2:32 pm

    I think you’re right Former, at this point does it really matter? As you said, the proof of claim pretty much has it all. Why must everything be so secretive? I understand some people are very private, but we are all (or most will be) part of the class. How do we decide/accept with only half answers? I’m not trying to be difficult Thomas (you know I sing your praises!), it just doesn’t seem right.


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