Notices from Claims Administrator

The following information has been received from Blum Collins and is being posted concerning notices received by ex-Hellerites as to the settlement agreement:

Early this week you will receive two notices from the Claims Administrator in the Heller bankruptcy regarding resolution of your claims against Heller arising out of your employment at Heller. The most important notice, related to the class settlement, is quite elaborate and does not require further detailed discussion. We did, however, want to give you a heads up about what these notices mean and invite you to email to us any questions you might have [ and]. Our intention is to gather the questions we receive and to send by email and post on Heller Highwater answers that are of interest to everyone. Of course we will deal with individual questions separately.

You will receive a Notice to Plaintiff Class of the proposed settlement we have negotiated with Heller and its Creditors’ Committee (the “Class Notice”). In the Class Notice you are advised of the economic significance of the settlement to the class generally and of the amounts of your claims against the net assets in the Heller estate that will be given priority, non-priority and subordinated status. The details are well described in the Class Notice, but in summary, the class will receive an allocation of approximately $4.5 million in priority wage claims, $7.5 million in non-priority wage claims and $7.0 million in waiting time penalty claims, although is quite unlikely that you will recover anything on the waiting time penalty claims. How your interest in those amounts has been calculated is described in the Class Notice and through the examples that are in Exhibit 2 to the Class Notice. One provision of the Bankruptcy Code that significantly impacts the total amount you may receive through allocation of your claims between priority and non-priority status is that there is a limit of $10,950 on the amount any employee can receive as priority wages (the “Priority Wage Cap”) so even if you have an aggregate claim (accrued vacation plus unpaid wages plus WARN) in a greater amount, the Code limits the amount that can be given priority treatment to $10,950; the balance is in the non-priority category.

If things go according to the present schedule, the full priority amounts (less tax withholding on wages) will be paid in late July or August. The amount you will receive on your allocated non-priority claims, and when you will receive additional payments, depends on Heller’s future success in collecting money from its debtors, including Bank of America and the Heller shareholders with the largest interests in the firm. Those risks are discussed in the draft Disclosure Statement and will be described in detail in the approved Disclosure Statement you will receive at the time you are asked to vote on the Plan.

You do not need to do anything to be included in the class and receive the benefits of the settlement. As with all class claims, you have the right to Opt-Out of the class; however, if you Opt-Out, you relinquish any benefits you would otherwise receive as a member of the class and you will have to pursue your claims individually. The details of the consequences of opting-out are described on page 17 of the Class Notice.

You also should receive a 2-page Notice of Hearing to Consider Approval of the Disclosure Statement describing the proposed Plan. You do not need to respond unless you have an objection to the adequacy of the proposed Disclosure Statement. As indicated in the Notice, on May 5 the Bankruptcy Court will address the adequacy of the Disclosure Statement and, when approved, a final Disclosure Statement will be mailed to all creditors, which includes employees. At that time that you will be asked to vote on the proposed Plan.

© 2010, copyright Thomas MacEntee


9 Responses to “Notices from Claims Administrator”

  1. 1 anon2 12 April 2010 at 8:17 pm

    Thanks, Blum Collins, for the summary, even though I’m still confused. Of the five different dollar figures listed in my Exhibit 1, am I to assume that the amount listed for unsecured claim for waiting time penalities will not be paid at the time of this distribution? In my case that still leaves a satisfactory amount I can expect.

  2. 2 Observer 13 April 2010 at 12:57 am

    Ehxibit 1 to the notice to class is confusingly presented. It would have helped if the line items had been lettered or numbered, so we could more easily refer to them.

    Exhibit 1 attempts to show you how the components of your allowed claim (not necessarily the amount you filed for) are treated under the settlement.

    In simplest terms, focus on the bottom three sections of Exhibit 1.

    The amount third from the bottom is the amount that the settlement would treat as priority in rank. Assuming plan confirmation and enough cash on hand in the bankruptcy estate, this amount would be paid in ful some time this summer – early fall.

    The amount second from the bottom is the amount that the settlement would treat as a general unsecured claim. This gets paid only if the bankruptcy case brings in substantial sums of money, e.g. there is a good success against Bank of America. This gets paid only pro rata, i.e. only as far as the available funds go toward satisfying all the general unsecured claims. Not just the employees, but the landlords, vendors, etc. This may not get paid anything for 1-3 years. (The time period may become clearer when the disclosure statement for the new plan becomes available.)

    The amount at the bottom is the amount that the settlement would treat as a subordinated claim. The debtor and the committee have contended that statutory waiting time penalties are in a category ranked by the bankruptcy code below all other unsecured claims. Blum Collins has apparently been persuaded that that position is probably right, and so they have agreed to subordinated treatment for these waiting time claims. As the Notice says at page 10, lines 11-15, it is unlikely that there will be any payment ever on this category of claims. (All other secured anc unsecured claims have to be paid in full before this category receives anything.)

  3. 3 SFLegalSecretary 15 April 2010 at 1:55 pm

    I updated my address sometime ago through the link but you continue to send my mail to the old address. Now, I will be moving again at the end of May and am concerned about this.

  4. 4 SFLegalSecretary 15 April 2010 at 1:56 pm

    Correction from previous blog: I meant Blum-Collins continues to use my old address.

  5. 5 News Elf 15 April 2010 at 9:36 pm

    SFLegalSecretary, I suggest you call, email, and write a snail-mail letter to Blum Collins not only informing them of your address change, but also asking for confirmation that they have received your notice of address change and updated their records accordingly. Good luck!

  6. 6 Randy S. 18 April 2010 at 8:55 pm

    I have still not received the “Class Notice” as defined above. I received the 2-page “Notice of Hearing to Consider Approval of the Disclosure Statement” from Pachulski Stang about 2 weeks ago. Do I need to do anything specific to get the Class Notice? Alternatively, at what point should I assume I was accidently overlooked or the forms were lost in the mail? Thanks for any insights.

  7. 7 Flummoxing and Feinting 18 April 2010 at 10:19 pm

    In reply to Randy S.: I suggest you contact either the Heller Ehrman estate’s bankruptcy counsel at Pachulski Stang or the employee class action counsel at Blum Collins to inform them that you haven’t received the package containing the Class Notice and your personalized Exhibit 1 (which identifies your individual settlement amounts). Do should do this promptly.

  8. 8 SFLegalSecretary 19 April 2010 at 9:07 am

    I emailed Blum-Collins right after I sent the April 15th blog and they are sending it to my current address. Thanks for your response.

  9. 9 Observer 24 April 2010 at 4:51 pm

    Just a reminder that any objection to the Disclosure Statement (re adequacy/clarity of information) is due by April 28.

Comments are currently closed.

Life preserver.jpg
Remember the words of Rev. Frank Scott (Gene Hackman in The Poseidon Adventure):

". . . sitting on our butts is not going to help us either. Maybe by climbing out of here, we can save ourselves. If you've got any sense, you'll come along with us."

Contact Us!

Send us your information as to job leads, networking, or just plain vent!
Go ahead, say it!
Add to Technorati Favorites
Bloggers' Rights at EFF


This blog has been created by Thomas MacEntee.

Recent Comments

Terms of Service

Heller Highwater (
Last Modified: September 14, 2008

- Don't be a dill weed.

- Treat other people the way you want to be treated.

- Ladies and children first.

- This is a rescue, not a bitch session.

- Help don't harm.

- Save the snarks for the attorneys and Above The Law.

Heller Highwater is not:

- a place to practice viscious and vindictive "whisper down the lane" rumour-mongering;

- a place to bad mouth co-workers;

- a place for diatribes against specific people or specific incidents;

- a place to heap pity on poor Heller Ehrman staff by outsiders;

- a place that discriminates or sets margins noting who is outside and who is inside - we even welcome supportive Heller Ehrman attorneys!;

- meant to further the demise of Heller Ehrman, LLP.

Heller Highwater is:

- a place for support, a place of empowerment, a place of passion;

- a place to learn about job leads, resume preparation, skill building, training, new opportunities, and how to succeed in a new workplace;

- a place to keep up on the latest news as to how Heller Ehrman management intends to treat its support staff as it winds down its operations - will it be every woman for herself? or will it be "let me hold the door for you and is there anything else I can do for you"?

- a place of refuge.

Note: in no way, shape or form is Heller Highwater sanctioned, supported or even recognized, (but it is very likely monitored) by the management of Heller Erhman, LLP. The opinions represented here and on each and every page of Heller Highwater do not constitute the opinions of Heller Ehrman, LLP or its shareholders or its management. In addition, the comments left by visitors do not reflect the opinions of Heller Highwater.

%d bloggers like this: