Heller Dissolution Getting Ugly

Pic: fullbleed

The Heller Ehrman dissolution turned notably worse last week.

That’s pretty impressive, considering that since voting to dissolve on September 26, the defunct firm has been:

• hit with a class-action suit purporting to represent the “hundreds” of former employees allegedly terminated in violation the WARN Act;
• the subject of another employee class-action suit for PTO violations;
• sued by its DC landlord for $31 million (repped by Seyfarth Shaw) on October 24, 2008; and
• sued by Williams Lea (repped by Arnold & Porter) on December 18, a document-management company, for $3 million, including (in a slap to the face of Heller’s own employees) severance for the contractors.

Now, it’s the landlord for the 118 year-old firm’s home office, San Francisco, suing.  Bush Associates is really going for the gusto, though.  After filing its complaint for $85 million in unpaid back rent and other charges on December 4, the landlord was granted a writ of attachment on December 19.  The $48,025,767 writ almost ensures that the firm will be forced into bankruptcy, according to The Recorder.  Other creditors will almost certainly join together to bring the involuntary dissolution in order to avoid losing priority to Bush.

William McGrane, who represented three of Brobeck’s landlords, described Bush’s play thusly:

“Once you publicize this kind of aggression, everybody gets the same idea. There’s nothing left to do. It’s the end.  If you start throwing A-bombs, H-bombs may not be far behind.”

Did Bush jump the gun?  How likely are they to retain their priority?

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2. To No One’s Surprise, Heller Files for Bankruptcy
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4. Boies Beats Wells
5. Tribune Started Thinking About Bankruptcy Before Ink Was Dry