Morgan & Finnegan, the New York IP boutique that dissolved in February after a raft of partner departures, filed for bankruptcy Tuesday.
The Chapter 7 filing, first reported on the blog Above the Law, came six days after a New York state judge placed the firm into receivership in response to a lawsuit by lender JPMorgan Chase. The boutique, whose revenue declined 38 percent last year, listed $6.37 million in assets and $10 million in liabilities.
A lawyer for Morgan & Finnegan, Isaac Nutovic of Nutovic & Associates in Manhattan, declined to comment. A call to senior partner John Sweeney went unreturned.
Revenue at Morgan & Finnegan fell dramatically last year, in part likely explained by partners leaving with clients for firms that included Cadwalader, Wickersham & Taft and Dickstein Shapiro. In 2007, Morgan & Finnegan grossed $60.63 million, the filings say. Revenue dropped to $36.99 million in 2008.
By January 2009, the firm had 17 partners left, according to the complaint filed in February by JPMorgan. Partners were in merger discussions with Locke Lord Bissell & Liddell by December 2008.
Locke Lord ultimately agreed in February to hire 30 lawyers, including 13 partners, with an expectation they could bill $28 million in 2009, according to leaked offer letters. Locke Lord took over Morgan & Finnegan's space at World Financial Center. JPMorgan is now suing for $4.1 million from the firm because the landlord tapped a letter of credit, and the firm has allegedly not repaid the bank.
Morgan & Finnegan lists JPMorgan's claim as a little less at $3.82 million. A spokesman for the bank declined comment.
Morgan's bankruptcy papers says the firm is owed money from two former partners because of draws that exceeded their capital accounts. The firm says it's owed a combined $223,732 from Day Pitney partner Keith McWha and Cadwalader special counsel Tod Melgar. Melgar declined comment; McWha did not return a call for comment.
Multiple former partners are listed as unsecured creditors owed capital. Capital-related claims total $3.9 million. Partners listing Locke Lord as their current address collectively are listed with $1.64 million in unsecured claims, with Sweeney listed with $269,268 in unreturned capital.
Cadwalader partner Christopher Hughes, who previously filed a lawsuit against the firm to get his capital back, is listed with $275,000 in his capital account. The amount is listed as "disputed."
A lawyer for Hughes, Ronald Minkoff at Frankfurt Kurnit Klein & Selz, declined comment.
The filings say Morgan & Finnegan previously received debt consolidation or bankruptcy advice from Duane Morris bankruptcy partner Lawrence Kotler, whom it paid $75,000 sometime in the last 12 months. Kotler says he is not advising on Morgan & Finnegan's current bankruptcy filing.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.