Dissolution, Heller Ehrman

Anatomy of a Dissolution:
BoA & Citi Tell Heller Ehrman There’s No Money For Vacation Time

Heller Ehrman LLP Above the Law blog.JPGThis won’t come as a galloping shock to the pessimists out there, but Heller Ehrman is not going to pay out the accrued vacation time of their associates and staff. The disappointed employees were told today via a firm-wide email:

On behalf of the Dissolution Committee:

To Our Employees:

The Dissolution Committee is sending this message to keep interested employees as informed as possible of relevant developments. A number of people have raised questions about accrued vacation pay payable upon termination. We regret to inform you that the banks’ which now control our ability to write checks — Bank of America and Citibank — have informed us that we may not pay terminating employees for accrued vacation. This decision was made despite our strenuous, repeated efforts to convince the banks otherwise.

We will continue to seek the banks’ permission to pay these amounts as soon as possible. The Dissolution Committee did obtain the banks oral permission to fund the payroll due next Friday in all other respects. We are now awaiting their written confirmation, which we expect to receive later today.

We sincerely regret that the banks are preventing us from paying our terminating employees the full amount to which they are entitled at this time. We wish it were otherwise, and we will continue to press the banks to change their position.

The Dissolution Committee

As we’ve discussed before, the banks really do have the ultimate authority when it comes to these situations. However, Heller made many protestations in the immediate aftermath of the dissolution that associates and staff would be paid all that they were owed.

Is “orderly dissolution” a thing of the past? Hellerites weigh in after the jump.

Over at Heller Highwater, people are trying to figure out their options:

There’s a funny thing called California State Law when it comes to employee’s accrued vacation. Check out these links:





So basically since Heller Ehrman does have an accrued vacation time plan, they can’t weasel out of paying employees upon employee termination. Otherwise it’s illegal and suggest a class action law suit.

But as one person put it, many of us have seen this movie before:

I hate to say it, but this smells like a bankruptcy filing in the making. Shades of Brobeck indeed…

Remember just eight days ago, Heller management said they were operating under a 60 day plan for dissolution. Now, “the Dissolution Committee did obtain the banks’ oral permission to fund the payroll due next Friday.”

Even the normally upbeat “Heller Drone” sounds annoyed:

It ain’t over – can you say “involuntary banruptcy”? The shareholders think they are in control now. Wait until Monday.

But one wise Heller associate put the situation in stark relief:

The ultimate irony is that the same banks that are stiffing us are taking handouts from taxpayers.

Just think about how you are going to feel on April 15th, Hellerites. We’ll try to see if we can come up with a “taxes already paid to BoA via direct deposit” exemption that will hold up in court.

Status: Vacation [Heller Highwater]

Earlier: Prior ATL Coverage of Heller’s Dissolution

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