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Anatomy of a Dissolution: Morgan & Finnegan Still Hasn’t Paid Severance

Monday, March 16, 2009 2:02 PM - By Elie Mystal

Morgan Finnegan intellectual property IP law.jpgOver a month ago, we reported that Morgan & Finnegan was bouncing checks to attorneys and staff that were left behind when the vanguard of M&F’s partnership jumped ship to Locke Lord. Back in February, we reported:

Is it that the firm can’t make payroll, or is that it won’t make payroll?

We know a number of former Morgan & Finnegan partners are getting ready for their new practice at Locke Lord, but it looks like those people might not be done with their old practice quite yet.

Well, here we are in March, there are Morgan & Finnegan people that have been out of work for two and a half months now. There are still no severance checks.

Where is the money? About a month ago, M&F people received this terse letter:

M & F issued WARN checks drawn on its account with J.P Morgan Chase (“Chase”) that was fully funded to cover those checks. Without prior notice to M & F, Chase froze the account and rejected the checks when they were presented for payment. The transition team has been trying to resolve this situation with Chase, both as to WARN payments and future WARN payments. But, we do not know, at this time, what the outcome of those efforts will be.

As Heller proved, blaming the bank — while doing nothing for former employees — is a good press strategy. However, in this case, the bank is fighting back.

Details after the jump.

locke lord logo.JPGOn February 27th, JPMorgan Chase filed suit against Morgan & Finnegan. According to the compliant:

69. Defendant is in default pursuant to the terms of the Facility, the Letter of Credit Agreement and the Security Agreement.

70. Pursuant to such agreements, there is presently due and owing to Plaintiff from Defendant the sum of $4,145,796.33 plus interest costs and fees, including
attorney’s fees.

Locke Lord is not named in the complaint. But that doesn’t mean JP Morgan is unaware of the all the money the firm threw at the Morgan & Finnegan partners that jumped ship. In fact, Above the Law’s reporting on the matter even received a shout-out in the complaint:

33. Pursuant to press releases issued by Locke Lord (copies of which were obtained from the Locke Lord website and are annexed hereto as Exhibit E), as of February 2,2009 approximately 30 attorneys fiom M&F joined Locke Lord in some manner of equity partner, income partner, associate and of counsel.

34. Upon information and belief, based upon letters allegedly sent by Locke Lord to John Sweeney and James Gould of M&F, seven of the thirteen partners joining Locke Lord joined as equity partners and six joined as income partners. These letters, which are represented in a public forum to be copies of the actual letters sent to Mssrs. Sweeney and Gould, are annexed hereto as Exhibit F. These letters were obtained from the web site: htt~://abovethelnw.com/2009/01/1nor~fainn nepan locke 1ord.php

We’ll say it again. Former Morgan & Finnegan partners now at Locke Lord might not be finished with their old job just yet. As one tipster put it:

The contact person at Locke Lord no longer answers calls or calls people back. John Sweeney, former managing partner, has told one associate not to expect their money and to try to find employment as soon as possible…. Personally, I am completely F*$%ed.

It looks like former Morgan & Finnegan employees will have to wait in line to get their money. But how can the current Locke Lord partners, who were well compensated when they left Morgan & Finnegan, just ignore the wreckage they left behind?

JPMorgan v Morgan Finnegan.pdf

Earlier: Nationwide Dissolution Watch: Is Morgan & Finnegan Bouncing Checks?
Nationwide Dissolution Watch: Morgan & Finnegan?

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Posted in: Dissolution, Locke Lord Bissell & Liddell, Morgan & Finnegan

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