Former Heller Employees Strike Back (Again)

This time it's personal. (Pic: Universal)

Yet another class action has been filed on behalf of the former employees of Heller Ehrman. This time, it’s personal. Plaintiffs’ counsel has sued all 179 individuals who were partners of the firm on August 11, 2008, which is when notice under WARN and various other statutes should have been given. That’s long before the firm was forced into bankruptcy in December.

At least part of the defense will be that the individuals in fact aren’t partners, but “shareholder employees of the professional corporations that composed the limited liability corporation” that was Heller Ehrman.

More on the worsening morass of the various related actions after the jump.

One of the plaintiffs’ lawyers is John Blum (UCLA ‘84, Yale JD ‘87), is himself a former Hellerite (Hellerian?), although he and his partner Craig Collins (both of whom are on the complaint) tout their expertise in eminent domain, rather than employment law on their bios, although there is a separate section of the site for the latter practice.

First hurdle is that there is already an existing class action in process.

The suit could have duplication or jurisdictional issues, since a similar complaint (.pdf) has been filed in the District Court for the Northern District of California against the professional corporations. Blum said Friday his firm is going to ask to dismiss the district court case, which it took over, because most of the important decisions in Heller are being made in the bankruptcy court.

The bankruptcy court is already dealing with infighting among the creditors, including Bank of America’s colossal screwup of prematurely terminating financing statements on $51 million of assets. Not surprisingly the other creditors are not happy about B of A’s attempt to fix the “clerical error” so they sued, too.

That Legal Pad article also points out the firm’s astonishingly poor collections: only $8 million has been collected of $77 million in accounts receivable when the firm filed on December 28.

How much of that is clients refusing to pay for various reasons and how much of it is former partners trying to keep clients by not pestering them to pay a lame duck?

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4. Plaintiffs Firm Benchslapped
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