Trustee Named in Dreier LLP Bankruptcy Case

Former Assistant U.S. Attorney Sheila M. Gowan has been selected as the Chapter 11 bankruptcy trustee for Dreier LLP. The 250-lawyer firm collapsed after the Dec. 2, 2008, arrest of the firm’s sole equity partner, Marc S. Dreier, in Toronto on an impersonation charge and his Dec. 7 arrest in Manhattan on securities and wire fraud charges for what prosecutors now say is a $380 million fraud. At a Dec. 19 hearing, Southern District Chief Bankruptcy Judge Stuart M. Bernstein authorized appointment of a trustee. In papers filed Tuesday with the bankruptcy court, the U.S. Trustee’s Office made a motion to approve the appointment of Ms. Gowan, a litigation partner at the boutique firm of Diamond McCarthy. Ms. Gowan stated in an accompanying affidavit that she had not identified any conflicts that would disqualify her from acting as trustee in Dreier’s chapter 11 case. She noted that for seven years her current partner, Howard D. Ressler, worked with Judge Bernstein at the firm of Kensington Ressler. Before joining Diamond McCarthy in April 2008, Ms. Gowan was affirmative civil enforcement coordinator for the Southern District U.S. Attorney’s Office. In an interview, Ms. Gowan said that while working for the government, she oversaw civil fraud prosecutions relating to the Federal Emergency Management Act, the Department of Housing and Urban Development and the Defense Department. According to her affidavit, Ms. Gowan’s hourly rate is $495. She also identified five Diamond McCarthy attorneys, three partners, a counsel and an associate who “will likely represent” her as trustee. Their hourly rates range from $210 to $610 per hour. Judge Bernstein is scheduled to rule on Ms. Gowan’s confirmation on Jan. 9. If approved, she will replace in the bankruptcy proceeding Mark Pomerantz, a Paul, Weiss, Rifkind, Wharton & Garrison partner who was appointed by Southern District Judge Miriam Goldman Cedarbaum as receiver for the firm in connection with the Securities and Exchange Commission’s civil lawsuit to recover funds. Mr. Dreier, who is represented by defense attorney Gerald L. Shargel, remains in the Metropolitan Correctional Center without bail. - Noeleen G. Walder