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Brobeck, Phleger & Harrison lawyers immersed in major cases may not see a paycheck for their work. Even so, they’re still at it. And they may even be able to score one, last big financial windfall as the firm winds down its operations. Brobeck is expecting a hefty contingency fee from its work on behalf of Oakland-based Western MacArthur Co., which sued several insurance companies for failing to provide coverage from asbestos claims. The St. Paul Companies agreed to settle the dispute for $975 million in June — contingent on Western MacArthur filing for Chapter 11 bankruptcy. It’s still not clear what the firm will earn from the case. Some say the firm’s fee could reach $25 million, though Peter Gilhuly, a Latham & Watkins partner representing the firm as it disbands, disputed that sum. Even so, Gilhuly acknowledges the firm expects a “multimillion-dollar payment.” However, it’s not entirely clear if the firm’s partners will get the money or if it will all go to Brobeck’s creditors. Gilhuly said the outcome of the case depends on whether the bankruptcy judge enters an order confirming the settlement and whether other insurance carriers decide to settle and be part of the agreement. Those issues will take about six months or longer to resolve, Gilhuly said. Brobeck’s resulting fee will then depend on whether the firm has paid off its debt to secured and unsecured creditors. The firm’s current debt load is approximately $55 million, Gilhuly said. He said that if the firm collected all the receivables it currently has outstanding, it could pay the bank in full. Paying off all the debt would leave the contingency fee for partners, and that in turn could lead to a tough fight among the lawyers. “I can guarantee you that it would be fought over,” said Stephen Schrey, a partner at Nixon Peabody who represented insurance carrier USF&G Co., a subsidiary of St. Paul Companies, in the litigation with Western MacArthur. Brobeck also has mulled over the fee issue. “There has been discussion, and I don’t anticipate a fight, though it’s too early to say,” Gilhuly said. Brobeck continues to represent Western MacArthur in additional litigation. On Wednesday, partner David Halbreich was in trial in litigation with the Argonaut Group Inc. insurance company. Like the case with St. Paul Companies, Western MacArthur claims it should be covered by the policies that Western Asbestos had in place at the time Western MacArthur acquired Western Asbestos’ assets. Though the Western MacArthur case has the potential for the biggest payoff, partners still have a few other matters on their plates. Partners in the San Diego office are representing Idec Pharmaceuticals Corp. in a patent infringement suit. In recent corporate transactions, Brobeck represented OneSecure Inc. in its $40 million acquisition by NetScreen Technologies Inc., and the firm represented both Sony Corp. of America and Royal Philips Electronics when a company formed by the two electronics giants merged with InterTrust Technologies Corp. in a deal worth $453 million. While client matters are pending, partners continue to look for other jobs. Philadelphia’s Morgan, Lewis & Bockius –whose decision not to seek a merger with Brobeck helped trigger the firm’s collapse — was reportedly asking lawyers in the San Francisco office to accept or decline an offer from the firm by 5 p.m. Wednesday. It’s not clear how many decided to make the move. Among the partners who have reached a decision is Donald Brown, a top insurance coverage litigator. Brown is joining the San Francisco office of Washington, D.C.’s Covington & Burling.

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