Declaring that "no effective management" exists at Dreier LLP in the wake of the arrest of Marc S. Dreier, the sole equity partner of the firm, a receiver late Tuesday afternoon filed for Chapter 11 bankruptcy protection for the firm and related entities.
Receiver Mark F. Pomerantz said in an affidavit filed with the Southern District Bankruptcy Court that the firm faces "an accelerating onslaught" of demands from creditors, clients and its attorneys. (See supporting affidavit of Roberto Finzi.)
Dreier himself, who allegedly defrauded investors of hundreds of millions of dollars, has no intention of seeking personal bankruptcy protection, according to his attorney, Gerald Shargel. However, Shargel said his client, who was moved from solitary confinement to the general population at the Metropolitan Correction Center on Monday night, is working with Pomerantz to "present a clearer picture" of his finances and to "deal with the court's concern that the money has somehow been spirited out of the country."
Under the Speedy Trial Act, the government must indict Dreier within 30 days of his presentment or initial appearance in magistrate's court Dec. 8. Shargel said he would waive that time limit for another 30 days, but no longer, "in order to work out some of the complex issues we are facing."
"There are cases where the bail issue is more complicated than others and there are times when it takes a little longer than you'd like to win a client's release, so we are doing what I've done countless times before and that's get our ducks in a row," Shargel said.
Shargel said Dreier's first meeting with Mr. Pomerantz, of Paul, Weiss, Rifkind, Wharton & Garrison, is scheduled for Wednesday. While calls to the firm Tuesday went unreturned, an employee who answered the phone said that apart from a "skeleton crew," hardly anyone remained at the Park Avenue offices.