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Brobeck, Phleger & Harrison is set to close its doors today, ending its 77 years as one of San Francisco’s elite law firms by working to avoid bankruptcy and facing an ever-growing list of creditors. The firm appears to be trying to avoid bankruptcy by using an alternative tool — a so-called assignment for the benefit of creditors — to liquidate the firm’s assets and pay debts. A Brobeck partner said such a plan had been described in an e-mail to the partnership, but it’s not clear if the firm has yet adopted that course of action. Meanwhile, the firm is facing suits from creditors and possible litigation by employees. On Tuesday, Brobeck’s San Francisco landlord — Equity Office Properties-One Market — filed an unlawful detainer complaint against the firm in San Francisco Superior Court to regain the premises and receive back rent. The complaint was not immediately available for public review, but a former Brobeck partner said the firm pays $9.7 million per year for 218,000 square feet in the One Market complex. Brobeck is likely to face further litigation, including possible suits by Brobeck staff and associates, as well as disgruntled partners. One staff member has initiated a campaign to file suit over the firm’s refusal to pay unused vacation and other benefits. If Brobeck employees and lawyers do file claims, they will have to join a list of creditors owed money by Brobeck. Topping the list is Citibank, the firm’s principal lender, which is owed about $55 million. The bank will be paid first, whether or not Brobeck files a petition for bankruptcy or opts to make an assignment for the benefit of creditors, bankruptcy specialists said. Under this procedure, Brobeck would transfer interest in all its property to an individual, or fiduciary, which would liquidate the firm’s assets and pay creditors. “It’s like a Chapter 7 case, but it’s not a bankruptcy case and not court-supervised,” said Adam Lewis, a partner at Morrison & Foerster. The advantage of an assignment for the benefit of creditors, or ABC, is that “you can pick who will be your liquidator and can talk up front about what the liquidator will do, who to sell to and how,” added Mark Porter, a partner at Fenwick & West. Geoffrey Berman, of Development Specialists Inc. who handles such assignments, said the bank may or may not agree to the process. But whatever Brobeck does, the bank is a secured creditor and first in line for the assets of the firm. “It comes first,” he said. “It literally controls the process.” As for other creditors, he said next in line would be the federal government. Wage claims would be paid next, followed by state and local taxes and general unsecured creditors. Peter Gilhuly, a partner at Latham & Watkins who is representing Brobeck in its liquidation, could not be reached for comment. As for the litigation over Brobeck’s headquarters, Equity Office Properties declined to comment on the complaint, as did Brian Leck, firmwide managing partner of Allen Matkins Leck Gamble & Mallory. Leck’s firm is representing EOP in the matter. But other lawyers were surprised at the legal action. “It’s a big deal,” said Mark Hennigh, a real estate lawyer and partner at Greene Radovsky Maloney & Share. “I’ve been in practice in San Francisco 25 years, and I’ve never heard of a major law firm being served with an unlawful detainer action.” Hennigh said the complaint could be for a portion of future rent at an accelerated rate, as well as rent due. While it’s uncertain whether partners would be liable for the claim, he said leases generally hold the partnership liable and individual partners liable for some fixed amount.

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