Former Heller Ehrman Chairman Matthew Larrabee is vowing to fight allegations by the defunct firm’s creditors that it pumped up its profits in early 2008 and then tried to cover it up. “The assertions in the Creditors’ Committee report are without merit and are not supported by citations to any source,” Mr. Larrabee said in an e-mailed statement. “These claims will be vigorously defended at the appropriate time.” Other former high-level Heller management, including Barry Levin, Robert Hubbell and CFO Richard Holdrup, declined to comment publicly.
The creditors committee took its biggest shot to date against former shareholders and their management in an interim financial report filed last week in federal bankruptcy court. It alleged that management “made some very troubling business decisions” as the firm was unraveling and, in an effort to boost its 2007 numbers, overpaid partners $9 million in profits. Thomas Willoughby, counsel for the creditors committee, said the allegations are based on a review of the firm’s financial books and records by the committee’s financial adviser, Development Specialists Inc.
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