It’s been a long time since we checked in on the ruins of Heller Ehrman. It seems strange that it’s been over a year since Heller Ehrman announced that it was closing its doors.

Everybody that was going to land on their feet after Heller collapsed has presumably landed. Those who never did get a job back in Biglaw post-Heller have hopefully moved on to other lucrative and rewarding careers.

While most of Heller’s employees have moved on, it looks like some of Heller’s things are still looking for new owners. One tipster reports that you can purchase your own little piece of Heller if you want to:

FYI the art from the Heller Ehrman art collection is up for sale at Bonhams New York:

Sale 17421 - Contemporary and Modern Art

Let’s take a look at what fine pieces of art you can score from the demise of Heller Ehrman.

* At the Supreme Court, much ado about a cross. [Washington Post (Robert Barnes); Washington Post (Dana Milbank)]

* Former Heller Ehrman partners deny that the firm was insolvent in 2007. [Am Law Daily]

* The new Honduran government, which came to power through a coup, has hired lawyers and law firms — including Lanny Davis, who recently moved from Orrick to McDermott — to defend its legitimacy. [New York Times]

* And there may be more work for antitrust lawyers, thanks to a new Justice Department invesitgation of IBM. [Reuters]

* Key Democratic lawyers agree to allow Guantanamo detainees to be transferred to the U.S. for trial. [Washington Post]

* Prosecutors drop one victim from the case, but Judge Herman “Who Needs A Spanking?” Thomas still faces charges dozens of counts related to 14 other victims. [CNN]

* No, it’s not your imagination: Gov. Jon Corzine’s campaign commercials are making fun of former U.S. Attorney Chris Christie (pictured) for being fat. (Disclosure: We worked as an AUSA under Christie from 2003 until 2006.) [New York Times]

* There was serious shadiness at dissolved firm Heller Ehrman. Information coming to light during bankruptcy proceedings suggests that, in 2008, the firm distributed $9 million in profits that it did not have and then covered it up. [The Recorder]

* Paul Hastings nabs Central District of California U.S. Attorney Thomas O’Brien. [Associated Press]

* Canadian inmate wants cruel and unusual punishment. [Courthouse News Service]

* Kudos to Preet Bharara, the new U.S. attorney for the Southern District of New York. Ashby Jones wonders whether he’ll “be able to play it straight as a prosecutor, and extricate himself from the muddy world of politics.” [New York Times via WSJ Law Blog]

* The system of justice in Myanmar lacks some justness. [CNN]

* Not so fast. Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York refuses to sign off on the Bank of America - SEC settlement. [Washington Post]

* Some tips on using a coffeehouse as your office. [My Shingle via ABA Journal]

Since it has been so long since Heller Ehrman collapsed, it’s easy to forget that the firm’s dissolution continues to affect so many. Today, the San Francisco Chronicle reports that the owners of the building that housed Heller will now have to forfeit that property:

The owners of a premier San Francisco office tower plan to forfeit the property to their lenders, the city’s second distressed transaction involving a major commercial building in recent weeks and another sign of the growing pressures in the sector.

Hines and Sterling American Property decided to transfer their interest in 333 Bush St. to the original financers, following the surprise dissolution of law firm Heller Ehrman in September, according to a letter Hines sent to local real estate brokers and obtained by The Chronicle. The 118-year-old law firm defaulted on its 250,000-square-foot lease, leaving the nearly 550,000-square-foot property 65 percent vacant.

That’s one hell of a jingle mail.

How are former Heller associates and partners doing these days? Have people put the Heller experience behind them? Or is the pain still too near to talk about it?

S.F. tower’s owners will forfeit it to lender [San Francisco Chronicle]

Earlier: WilmerHale Hires Operational Wisdom, From Heller Ehrman

If you read Above the Law last week, you’ll know that it’s an interesting time at WilmerHale. The firm is transitioning associates onto the street to other opportunities. It’s also dealing with former associates who left to clerk and now want back in.

But the firm isn’t unconcerned about the terror snaking through its associate ranks. In fact, they’ve hired a “Chief Legal Talent Officer.” According to the firm wide announcement:

I am pleased to announce that Brad Scott, our new Chief Legal Talent Officer, has started with the Firm. We are fortunate to have attracted an individual with Brad’s qualifications. The Chief Legal Talent Officer role will be responsible for all aspects of the attorney lifecycle including associate recruiting and onboarding, promotion and compensation processes, professional development, mentoring and career development and diversity programs throughout the Firm.

Associate onboarding? What about associate offloading? We know that at some firms the person that fills this position doubles as the physical manifestation of the Grim Reaper. But maybe that won’t be Mr. Scott’s fate. A tipster quips:

Clearly WH is doing well if it can hire even more layers of management.

More details after the jump.

* AIG turned in the list of bonus recipients to New York’s Attorney General Andrew Cuomo yesterday—let the games begin. Just kidding, I too fear for the safety of heavily compensated AIG executives—there is nothing scarier than an angry progressive. [The Los Angeles Times]

* Dispensers of medical marijuana have room to breathe after Attorney General Eric Holder announced that federal authorities would cease raiding their operations. [The New York Times]

* Attorney General Eric Holder issued guidelines to federal agencies after The White House advised them to release their records to the public. [The Washington Post]

* A 3-judge federal appeals panel is considering whether or not to re-instate Madoff’s bail—springing him from jail until sentencing in June. [Newsday]

* Albert Hu, a Silicon Valley hedge fund manager conned clients by saying he was represented by prominent law firms like Heller Ehrman and Shaw Pittman; he was arrested in Hong Kong, and charged with defrauding millions from investors. [The National Law Journal]

* Another sad tale of an associate whose offer has been put on hold—his employer Latham & Watkins is asking incoming attorney’s to defer their start dates. [The National Law Journal]

This morning The Recorder is reporting that Bank of America and Citibank could lose $57 million because of a clerical error that could void the preferred status of BoA and Citibank:

A secured creditor must “perfect” its security interests with uniform commercial code filings and file updates every five years. The bank last submitted such a “continuation” in 2005, so another filing wasn’t needed until 2010. On Oct. 1, a week after Heller said it would dissolve, the bank filed a “correction statement” saying the 2007 filing was a “clerical error.” On Monday, the bank declined to discuss how or why the error occurred, or who made it — the 2007 filing required no signature.

The error would nullify BoA’s and Citibank’s secured creditor status:

The firm had paid the banks $51 million since announcing its dissolution and would owe them almost $6 million more if they remain secured creditors.

Closing the loop on Heller’s bankruptcy after the jump.

Heller Ehrman’s bankruptcy has been a long time coming. The firm made the news official on Sunday:

Today the Dissolution Committee of Heller Ehrman LLP, in Dissolution (the “Firm”) authorized the Firm’s counsel to file a Petition for Reorganization under Chapter 11 of the United States Bankruptcy Code. We took this step only after very careful and extensive analysis.

But the firm’s Dissolution Committee also notes:

The Dissolution Committee’s decision to conduct the continued wind down of the Firm under the jurisdiction of the Bankruptcy Court was not prompted by the Firm running out of money. On the contrary, thanks to the dedication and tireless efforts of the Firm’s remaining employees who comprise the Liquidation Team, the cooperation of the Firm’s former shareholders, and the positive responses received from hundreds of the Firm’s former clients, collection of accounts receivable over the past three months has been strong. And going forward, we continue to expect collection of tens of millions of additional dollars.

After the jump, we post the full Heller memo and check in with Thacher Proffitt.

It has been a while since we last checked in with the firm formerly known as Heller Ehrman. While many Heller partners have landed safely at firms like Orrick, Covington & Burling, and Winston & Strawn, some ex-Heller junior associates and staff are still twisting in the wind. The fact that markets everywhere are awash in legal resumes does not help.

Right now, former Heller people continue to fight with the firm and the firm’s banks over money they claim is owed to them. As Thomas MacEntee explains:

We’ve been hearing the same tired line of nonsense from Heller’s Dissolution Committee, Bank of America, and Citibank now since October. The Dissolution Committee passes the buck to the banks continuously and says “they won’t let us” when it comes to paying employees. The banks remain silent and play with not only the monies coming in but the day-to-day survival of ex-Hellerites.

When a bank is refusing to release the money you need for rent, things can get pretty heated. But you’d think that Citigroup at least would be a bit more willing to meet its obligations to regular people, since regular people just bailed them out:

How is it that these banks can be handed billions of dollars and yet be allowed to assist Heller in violating federal and state laws? My thinking is that authorizing the payment of what is due ex-Heller employees would put money back in the economy, allow people to make purchases, etc. Am I the only one seeing this? Or do I look “through a glass, darkly” as the saying goes, and my perception of reality is somewhat imperfect?

More bad news for Heller, and discussion of a “give us our money” email campaign, after the jump.

* Mukasey is going to be okay. He’s telling jokes and talking to the President. A GW doctor said “”The attorney general is conscious, conversant and alert.” [CNN]

* Do you feel sorry for sex offenders? The California 4th district court does. They ruled that Jessica’s law, a law that prohibits sex offenders from living within 2,000 feel of a school or park constitutes “banishment under another name.” [San Francisco Chronicle]

* “A U.S.-triggered spate of global carmaker-bailout proposals may spark trade disputes over whether the Americans are unfairly trying to subsidize their industry or just making up for state aid foreign rivals already enjoy.”[Bloomberg]

* Meanwhile, the EU’s antittrust chief says the EU should resist an auto-industry bailout. [Bloomberg]

* On Thursday, a federal judge ordered the release of five Algerian prisoners from Guantanamo Bay, Cuba. [Los Angeles Times]

* If you’ve been following Proposition 8, you may want to watch an upcoming gay marriage case that will be coming before the Iowa Supreme Court. [Iowa City Press Citizen]

AIG, the American taxpayers’ very own insurance company, has taken a lot of heat for their company retreat full of facials and frivolity.

But in our own world of dissolving law firms, Heller Ehrman’s actions before the end have gotten far too little scrutiny. Yesterday, American Lawyer ran a story (subscription) about Heller’s 2007 partner retreat:

When Heller Ehrman partners gathered at Santa Barbara’s Bacara Resort & Spa in March 2007, there was already reason to be concerned about the firm’s future. Several practice areas were slow. The firm’s national and global ambitions were in disarray. And partners were increasingly skeptical about management’s ability to address the problems. But that weekend they were determined to laugh at this somewhat worrisome predicament.

The final night of the retreat featured a $300,000 skit. Performers from the Los Angeles Opera, accompanied by a professional orchestra, portrayed Chairman Matthew Larrabee and other firm leaders frantically searching for a merger partner. “Some people were laughing, but I thought it was surreal,” says one former shareholder (Heller’s term for partner).

Heller people, here’s some free legal advice: if you can get from this post to Matt Larrabee’s house without thinking, it might be a crime of passion. But if you read through to the end of the post, you’ll have entered the cooling down period and you’re looking at murder 2.

Please, it’s not worth it. San Quentin is a bad place. Just click on the jump.

Winston & Strawn is expanding with the help of Heller refugees. A tipster reports on the latest internal Winston communication:

[We] are extremely pleased to announce that the firm has added a number of former Heller Ehrman attorneys who will greatly enhance Winston’s practices and international presence. Winston has acquired three partners in Hong Kong from Heller and Heller’s international trade group in D.C. In addition, we welcome Joe Armao, a well-known environmental litigator, as a partner in our San Francisco office.

In Hong Kong, we are joined by capital markets and M&A partners Simon Luk and Michael Phillips and commercial litigation partner David Hall-Jones. Subject to local regulations*, these partners will be supported by additional associates and other professionals. Winston is also pursuing and fully expects to expand its presence in Asia with one or more offices in mainland China, likely to be in Shanghai and Beijing. We have begun the application process for this expansion. More details will follow as they become available.

In Washington, we have added four high-profile international trade partners: William Barringer, Daniel Porter, Christopher Dunn and James Durling, as well as associates Valerie Ellis, Matthew McCullough, Yu Li, and Ross Bidlingmaier. The international trade group will be supported by a number of non-lawyer trade professionals on the ground in Beijing.

Core practices primarily affected include complex commercial litigation, international arbitration and cross border deal-making capabilities. The firm has expanded materially in 2008 with the opening of the Charlotte office in January, the addition of prominent lateral attorneys to our existing offices and practices throughout the year, and this most recent expansion to Asia.

A press release will be available tomorrow morning on winston.com. An office page for our new Hong Kong location will be posted as well and will include address information and profiles of our new group.

We expect to take over existing Heller office space only as necessary. A full integration effort is underway; please take a moment to welcome our new team.

Regular readers of ATL will not be surprised by Winston capturing some top Heller talent.

Recent history after the jump.

Dechert has just announced the hiring of former Heller chairman Matt Larrabee. His official partnership with Dechert is thought to be a mere formality.

From Dechert’s press release:

“Matt’s experience is unusually diverse, with each of his practice areas intersecting with a number of Dechert’s core litigation practices: class action defense, antitrust, fraud claims, and complex commercial litigation,” said Dechert chairman Barton J. Winokur. “Perhaps most importantly, Matt will provide yet another highly experienced and sophisticated first chair litigator to Dechert’s already impressive group of trial lawyers. I think everyone would agree that Matt is one of the most respected trial attorneys in the nation and we welcome him to the firm.”

One firm’s loss is another firm’s gain. If Dechert ever has to dissolve, they’ve got a new pro in house.

Read the firm’s full statement after the jump.

Three Heller Ehrman employees have decided to sue the firm. They allege that the firm owes them wages under the WARN act, as well as the California state labor code.

According to The Recorder:

The named plaintiffs are Laura Werth, a technology assistant in San Francisco who joined the firm in September 1996; Carl Goodman, a senior manager of business development in Seattle who joined the firm in September 2005; and Anna Scarpa, a manager of professional services who joined the firm in October 2006. Werth and Goodman were laid off on Oct. 10, while Scarpa was laid off Oct. 17.

Matthew Helland, the Nichols Kaster attorney representing the employees, could ask for $5 million in damages.

Heller management must have seen this coming, but that doesn’t mean they will prevail.

Read the complaint here.

Heller Faces Class Action Suit by Laid-Off Employees [Law.com]
Welch, Goodman, and Scarpa v. Heller Ehrman.pdf

Earlier: So Much For 60 Days WARNing: Part II

Another week, another Heller Ehrman action that is out of step with their original dissolution plan.

This time it looks like even “essential” Heller employees and associates are being terminated at the end of this week.

After the jump, read the full Heller Dissolution Committee Letter. And notice how similar it is to the last one.

It’s been a dark week on ATL. Layoff news has been pouring in: 21 attorneys cut at Katten, up to 60 at Sonnenschein, and 20 at Clifford Chance.

To prevent you from jumping out your windows, we’re revisiting a Wall Street Journal article from earlier this month on the silver lining for law firms during the economic crisis.

Firms with relatively strong balance sheets are hiring lawyers from competitors that are hurting from the dropoff in mergers, debt offerings and other staples of the legal business. Leaders of these firms figure that being bigger and more geographically diverse will help them weather downturns in particular market sectors and capitalize on complex business opportunities that require a variety of specialties. In most cases, they’re even giving the new hires raises.

Did you hear that, despondent ones? Raises!

Many firms have been feasting on the remains of Heller Ehrman (R.I.P.). Heller partners and attorneys have been snatched up by Hogan & Hartson; Orrick; Sheppard Mullin; Arnold & Porter; Covington & Burling; Jones Day; and Cooley Godward Kronish. Other firms have been poaching partners from struggling Thelen.

Some firms are buying on the cheap, while others are giving new attention to more resilient practice groups:

K&L Gates LLP has acquired medium-size firms in Texas and North Carolina this year and hired 45 partners from other firms. “We have no debt — no long-term debt, no short-term debt — and therefore have a balance sheet that allows us to grow aggressively into a downturn,” says Peter Kalis, chairman of the 1,700-lawyer firm…

But many law firms believe that they have no choice but to expand specialties, such as restructuring, intellectual property, securities litigation and antitrust, that are generally believed to remain steady — or even pick up — during down cycles. Cadwalader, Wickersham & Taft LLP in New York laid off 131 lawyers — nearly 20% of its staff — earlier this year because of the implosion in the mortgage-backed securities market, a key practice area for the firm. But it has hired lawyers in other practice areas, including financial restructuring.

Chins up.

Some Law Firms Hire in Slump [Wall Street Journal]
As Heller is sliced and diced, many associates are out in the cold [National Law Journal]

Earlier: ATL Layoff Coverage

“Non-essential” Heller Ehrman people, it’s time to pack it up:

It is with a great deal of regret that we write to inform you that we will not be able to pay you for work performed after today, Friday October 10 and, as a result, that your employment with the firm will be terminated today. We also expect that we will need to inform other employees over the following two weeks that we are unable to pay them any further and will need to terminate their employment. We do expect that we will be able to continue to pay some people for a longer period of time. Regular paychecks will be provided today but because of the volume of final paychecks we will need to prepare, it may take a few days to get your final paycheck to you. We know this is important to you but please be assured your colleagues in the Payroll Department will be working as hard and as quickly as they can to get you your paycheck.

These actions have been forced upon us by the two banks — Citibank and Bank of America — that control our ability to make any payments. Generally, they have refused to pay employees who we cannot convince them are necessary (as they define it) for the wind down efforts. We understand how upsetting this news is. You should continue your activities to serve clients, including, where applicable, to bill your time. Time billing and client service are two of the criteria the banks are examining in our continuing negotiations with them to maintain an orderly transition.

We want to thank you for your professionalism and forbearance to date and ask you to continue to proceed with the same degree of professionalism you have demonstrated during your valuable service to the firm and to its clients.

The Dissolution Committee

The rest of the bad news, after the jump.

When Heller Ehrman dissolved in late September, associates and employees were informed via a firm-wide email.

Since then, Heller management has had email communication with employees, but (to our knowledge) they have not revealed their official dissolution plan.

We got our hands on the 43-page operating document. In addition to a detailed discussion of the firm’s balance sheet, the plan lists the firm’s priorities during the dissolution. One priority is to preserve and protect the firm’s assets “for the benefit of, first, the creditors, … and thereafter the Shareholders of the firm and the former Shareholders of the firm.”

The full dissolution plan can be downloaded below. Check it out and see what interesting nuggets you find.

Plan of Dissolution.pdf (PDF)

Earlier: Prior ATL coverage of Heller Ehrman’s Dissolution

If any Heller Ehrman attorneys were hoping that a major firm would sweep in and hire a whole bunch of Hellerites, the Dissolution Committee is warning you not to hold your breath. The Recorder reports:

On Tuesday, Peter Benvenutti, the chairman of the dissolution committee now controlling the firm, confirmed whispers that Baker & McKenzie and Winston & Strawn, both one-time merger candidates, had withdrawn proposals to pick up large groups of lawyers and their expensive real estate. While Benvenutti would not say whether deals on this scale are being discussed with any other firms, he did say there’s interest in taking over certain of the firm’s leases, and “we expect to have clarity in a day or two.”

At this point, why would Baker or Winston Strawn take on expensive lawyers when they can just sit back and cherry pick the superstars they want? We haven’t heard any story of a Heller rainmaker saying “If I come, these 30 people are coming with me.”

More bad news after the jump.

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