JD Journal » dreier debt

Dreier Firm Faces Eviction

Erik Even — Mon, 23 Feb 2009 17:16:21 +0000

Save for a skeleton staff authorized to wind up the affairs of the now-bankrupt Dreier LLP, attorneys remaining at the firm’s midtown Manhattan offices must leave the premises by March 4th.

If the offices are not vacated by the agreed-upon date, the landlord, Hines 499 Park LLC, may “with the assistance of the United States Marshal” evict “all persons located within said premises.”

The agreement comes in the wake of an earlier motion by the landlord to compel the bankruptcy trustee to pay $2.1 million of “post-petition rent and other additional obligations under the Lease.”

Meanwhile, the firm’s founder and sole equity partner, Marc S. Dreier, who stands accused of defrauding investors of $400 million, remains under house arrest at his Lexington Avenue apartment, where he is being watched by private, armed security guards.

Former Dreier Partners Could Face Liability

Erik Even — Sat, 31 Jan 2009 17:41:45 +0000

The New York Law Journal has consulted with experts, and finds that lawyers who fled Dreier LLP as soon as they heard that founder Marc Dreier was arrested and indicted could face legal problems of their own:

The departed partners might be held liable for any of the firm’s debts, and also face disciplinary action for any missing escrow funds. Further, they might be asked to return income they received from clients for work on unfinished matters they took with them when they left the now-defunct firm…

“When law firms dissolve, the court wants one thing and one thing only. They want money put back in the estate to pay back the creditors,” especially when there are clients who have lost money, said an attorney who specializes in law firm ethics and professional responsibility who asked to remain unnamed.

“In connection with partners in law firms, the interplay between the limited liability statute and the bankruptcy law is not entirely clear so that any partner who was being held out to the public as a partner is under some risk of having liability,” he added.

Read the whole story.

Lawyer Appointed to Probe $38.5M Dreier Debt

Erik Even — Fri, 09 Jan 2009 23:20:20 +0000

Steven J. Reisman, a partner in New York’s Curtis, Mallet-Prevost, Colt & Mosle, has been appointed to investigate allegations that Seattle’s 360networks and its creditors are owed up to $38.5 million in funds from the defunct Dreier LLP.

Reisman was appointed by Judge Allan L. Gropper of the US Bankruptcy Court for the Southern District of New York. He will be assisted by other Curtis lawyers, including Lynn P. Harrison III, T. Barry Kingham and Jerrold Bregman.

The funds in question should have been in a Drier client escrow account. Dreier had accumulated the roughly $38.5 million in cash from prosecuting actions that it brought as counsel to the committee appointed under 360networks’ Chapter 11 plan. The funds were to be shared among the reorganized telecommunications company and its creditors pursuant to the plan.

Dreier LLP collapsed after Marc Dreier, the firm’s founder and managing partner, was arrested in Toronto in December for allegedly impersonating another lawyer. He was arrested again in New York upon his return on securities and wire fraud charges that prosecutors say may have cost investors $380 million.

Via The NLJ.