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Dreier LLP Items Get Sold to the Highest Bidder
New York Law Journal
March 27, 2009
Bidders Thursday sat on black and chrome sleigh-arm chairs and perched on the steps of a white spiral staircase at now-defunct Dreier LLP, while others convened in the reception area of the 14th floor of the firm's midtown Manhattan offices to bid on everything from mugs and pens with the firm's logo to a Herman Miller Eames chair.
As Edward Rodriguez, a former employee of the 250-member law firm, tried to coax the slide projector into working, an impatient audience member shouted, "Come on, let's go."
From behind the podium, auctioneer Barton Hyte, chief executive officer of BKHCO Inc. apologized for the delay and any "blurry" pictures of sale items, explaining that the auction had been put together under tight time constraints.
Thursday's sale came less than four months after Marc S. Dreier was arrested on Dec. 7 at La Guardia Airport after being charged in Toronto with impersonating an employee of the Ontario Teachers' Pension Plan. According to a superseding indictment released last week against the former sole equity partner of Dreier LLP, the 58-year-old attorney sold more than $700 million in bogus real estate and phony pension plan notes to 13 funds and three individual investors.
Less than two weeks ago, at an emergency hearing, Howard D. Ressler of Diamond McCarthy, who represents the trustee in the bankruptcy proceeding of Dreier LLP, told Southern District Chief Bankruptcy Judge Stuart M. Bernstein he was concerned a forfeiture allegation in the new indictment could decimate the value of the firm's assets and leave unsecured creditors "wiped out".
But in a letter submitted to Bernstein on Wednesday, Acting U.S. Attorney Lev L. Dassin said the government will not seek to forfeit the property the bankruptcy trustee is "in the process of selling as a result of this Court's March 12, 2009 Order."
A joint hearing before Southern District Judge Jed S. Rakoff, who is presiding over Dreier's criminal trial, and Bankruptcy Judge Bernstein, has been scheduled for April 6 to address issues common to the bankruptcy and district court proceedings.
"When you give people a nice leather chair to sit in," people wind up paying more, Dowling said.
The best auctions, he added, are in the "freezing cold [with] no bathroom. Towards the end, people start dropping like flies. That's where I shine."
While Dowling came to buy "pretty much anything he could get his hands on," Paul Bright, an art dealer who frequents high-end auctions at Christie's and Sotheby's had his eye on certain chairs, sofas and tables with a "classic design."
Criminal defense lawyer Jeffrey Traub of Traub & Traub, suggested that there were two groups of people at the auction: the "used furniture guys" and the "jacket-and-tie crowd."
A redweld folder in hand, Traub said he had to return to his office and did not know whether he could wait hours to bid on the tan leather swivel arm chair his wife and law partner coveted.
Joseph Levi, a securities class action attorney, who came to buy chairs, desks and "maybe a computer or two" for his new office also was watching the clock.
"I hope I don't have to spend the whole day here," said Levi, of Levi & Korsinsky.
Meanwhile, Hyte rattled on in typical auctioneer fashion as images of lateral files and conference chairs flickered on a screen set up near two hooks where a Damien Hirst painting, "Lysergic Acid Diethylamide," used to hang.
None of Mr. Dreier's furniture or paintings were for sale.
Some items up for grabs quickly sold at bargain prices, including a walnut bookcase for $50, a tan ultra-suede sofa for $275, 13 knoll task chairs at $225 a piece, and a white microwave oven for $25. Even the Eames chair sold at the relatively rock-bottom price of $1,250.
"I feel like I've been shot by a bullet," Hyte joked as he sold a five-drawer lateral file for $100.
At one point, an ex-Dreier employee who did not want to give his name shouted, "They just sold my office for a hundred bucks."
While Hyte declined to comment on the total amount earned at Thursday's auction, he said he was pleased with the outcome and that the bulk of the items had been sold.
