Anatomy Of A Dissolution: Heller Fights Eviction In Seattle
Heller Ehrman continues to stave off involuntary bankruptcy, despite not being able to pay employees their accrued vacation time. But Heller's breakup continues to take weird twists.
The latest bizarre news comes from Seattle, where some associates have wondered whether they are about to be evicted from their offices. Tension was so high that Heller management had to send around a clarification email:
TO ALL HANDS (SEATTLE):I have heard various rumors in the hallways to the effect that the Seattle office will close imminently and therefore that everyone needs to move out pronto. To clarify, here is the status.
The landlord has not issued a notice to vacate. If such a notice were issued, the notice period would be ten days. For reasons too long to explain, we overpaid rent throughout 2008. When those overpayments came to our attention, the firm asked that they be applied to cover (completely) the October rent obligation. The landlord has since asserted that the overpayments instead should be applied toward a fee that was due in connection with our give-back of space on 58. The Dissolution Committee is working with our outside counsel and communicating with the landlord to hopefully resolve this issue, and to clarify with the landlord any issues relating to removal of property from our space. To the best of my knowledge, closure of this office is not imminent and the date of closure remains to be determined, based on the pace of collections versus ongoing costs and also based on the banks' decisions about what spending they will approve.
A law firm on the edge of solvency "overpaid" their rent? We hope that the explanation for this oversight is too long and difficult to get into, but we wonder if it is just too embarrassing.
Meanwhile, the Heller refugees that ended up at Covington have officially started .
Associates that we are speaking to say that it is just starting to sink in that they will be out of a job soon. Hopefully the Seattle associates will get as much time as possible to come to grips with this reality, instead of showing up at the office one day only to find locks on the door.
Update: The Blog of the LegalTimes reports that Arnold & Porter has picked up the latest Heller refugees. The big fish is Kenneth Chernof, Heller's managing partner in the D.C. office. Any associates coming along for the ride?
Homeless In Seattle? [Heller Highwater]
Heller partners join Covington & Burling [Business Journal]
Arnold & Porter Picks Up Heller Partners [The BLT: Blog of the LegalTimes]
Earlier: Anatomy of a Dissolution: BoA & Citi Tell Heller Ehrman There's No Money For Vacation Time
(34) Comments
First bitches!!
No. 1 here. How's the legal market in the Emerald City?
Did anyone bother to ask how the firm's recruiting season is going?
2: it sucks
3: See if you can still withdraw and get your tuition back.
Chernof as a big fish? LMAO at that one.
Chernof as a big fish? LMAO at that one.
More shareholders are bailing:
http://hellerdrone.wordpress.com/2008/10/07/time-to-say-goodbye-aka-stupid-shareholder-goodbye-emails/
Chernof is a big fish. Have you ever heard of Philip Morris?
6-7: Associate still at Heller, not going with Chernof.
maybe they would still be a functioning firm if they watched their money a little better.
ap and covington increase their dominance in dc
NOW GET UP AND PLAY YOUR F****** FIDDLE!
http://www.businesssheet.com/2008/10/after-an-exhausting-bailout-aig-execs-needed-a-break-
"maybe they would still be a functioning firm if they made money a little better."
11: fixed your post
HAHAHHAHAHAHAHAHHAHAHAHAHA
Eat it.
I hope you all default.
13-What is that a reference to? Can't quite place it.
Over paid rent for ALL of 2008? What the fuck is going on their? I mean under GAAP prepaids would be counted as an asset on the balance sheet but in a cash intensive and dependent business why would they do such a thing. Paying ahead 3 months is one thing but if you are straddling solvency (as Elie pointed out) why would you part with cash like this - only reason is to ensure you don't get evicted because you know the cash would've dried up anyway.
Whoever ran the accounting at Heller should be strung up by their privates. Did they hire their accounting department from Enron. Boneheaded. If that kind of decision is indicative of Heller (i hope it isn't but it seems it is likely) the dissolution is not surprising. It is sad because that is so far out of the control of staff or associates who are paying the most for this...
I'm sorry for all affected. This really fucking sucks.
Shot and a beer to ya all.
Hopefully Heller isn't located in either of the two WaMu towers in Seattle. Expect a huge void in the Seattle office space market.
Heller's accounting department, like every other department, was centralized in SF in the name of efficiency. I am sure the Seattle office, had they had control over their finances, would have managed them well.
Guys at my high school overpaid their rent all the time. When they couldn't pay their serfs it was a BIG EFFING DEAL.
What happened to the VLG associates? Did they get left behind??
22 = VLG associate who wants reassurance he won't be the only one left behind.
well a few floors of prime real estate will be opening up in the Columbia Tower. Best building in the city. Puts WaMu to shame
Fire Elie.
These articles are too painful to read.
"We hope that the explanation for this oversight is too long and difficult to explain, but we wonder if it is just too embarrassing to explain. "
Why are none of the departing lawyers going to Mayer Brown or Bakers - isn't it weird that these firms were going to merge with Hellers, but now no Heller lawyers want to go there?
VLG attorneys aren't afraid of being left behind. They've either been left behind (first-years) or not (everyone else). Not a lot of worrisome ambiguity there, 23.
27, if that's the case, why do we have so many people on the various Heller threads who are so concerned about what's going on with the VLG associates (or just one person who's in a complete panic about it)?
Many of the VLG associates went to Cooley. Some were left behind.
Looks like the 401(k) accounts were frozen yesterday.
What do you mean re: 401(k) accounts frozen?
31- this is what 30 was talking about:
“As you know, the shareholders voted to dissolve the firm on September 26, 2008. Wind down operations continue under the Dissolution Committee with the employment of most employees ending on or before November 28. The firm’s dissolution on September 26 caused the Heller Ehrman LLP 401(k) Retirement Savings and Profit Sharing Plan to terminate.
In order to assure an orderly termination process and a fair and equitable allocation of costs associated with the plan termination, the Dissolution Committee has decided to temporarily freeze the Plan. During this temporary freeze period, you can continue to access your plan account and change investments through Vanguard. However, effective immediately, no new contributions or loans will be permitted and no withdrawals or distributions requests will be processed. If you have an outstanding loan, your loan payments will continue to be deducted from your paycheck and applied to the loan balance, while payrolls are processed. More details on loan repayments will be available shortly.
Once the Dissolution Committee is confident that all costs of plan administration paid, the freeze will end. You will then need to decide what to do with your plan savings. Additional instructions will be sent to you about your distribution options at the appropriate time.
Remember to visit the Plan’s website at: http://hewm.vanguard-education.com/ekit/
Updates regarding the Plan will be posted here where they will be easily accessible to you after you leave the firm.
Questions?
If you have any questions about this notice, please contact [redacted] or Vanguard Participant Services at 800-523-1188. Additional plan information is available on the Heller Ehrman LLP intranet site.
Baker and Winston have withdrawn proposals for attorneys and office space: http://www.law.com/jsp/article.jsp?id=1202425107134
Of course they have. With people like Heller Drone announcing they've already retained counsel, no one wants to become the next Morgan Lewis a la Brobeck.