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In the wake of Brobeck, Phleger & Harrison’s collapse, a handful of partners have been left to sift through the rubble. Stephen Snyder, who served as Brobeck’s chairman from 1996 to 1998, was named head of the firm’s liquidation committee on Feb. 11. He then brought on Brobeck partners G. Larry Engel, James Miller, and Luther Orton to assist him. Snyder was a bit overwhelmed when he took on the task. “It was like Dorothy walking out of the house in ‘The Wizard of Oz,’ ” Snyder says. The committee’s biggest task has been negotiating with a group of banks — led by Citibank — to pay off Brobeck’s current debt of $56 million and sell the firm’s assets. “When I got involved they were in a grim mood, not knowing when they would get paid,” Snyder says. The committee is also collecting bills, reporting to the government agency that looks over retirement funds, fielding hundreds of phone calls from vendors who want to be paid, and clients who want to know where their files are, and dealing with a suit by former employees seeking two months’ severance pay. Employees had no warning that the firm was disbanding and, unlike Brobeck partners, many have had difficulty finding new jobs. While some Brobeck lawyers are sympathetic to the staff’s situation, partner Steven Zager derides their suit, noting that partners had taken a big hit as the firm’s fortunes fell. Zager, formerly the head of Brobeck’s litigation department, says partner income dropped 43 percent from 2001 to 2002 and 82 percent from 2002 to 2003. Brobeck’s profits per partner went from a high of $1.1 million in 2000 to $555,000 in 2002. On top of the decline in income, Zager says, partners also lost all their retained capital. As for the staff, they “got paid time off and vacation [pay],” Zager says. “People want to be paid for not working. It’s puzzling to me.” Employees are also battling to get their 401(k) retirement funds, which have been frozen since Brobeck went into liquidation. Barbara Creed, a partner at Trucker Huss who represents the retirement plan, says employees will begin receiving distributions by the end of the month. However, 1.5 percent of the accounts will be held back to help cover administrative costs. Brobeck did not pay administrative fees on the 401(k) plan for the last three quarters of 2002, and that money will now come out of the employees’ distribution. Creed says she doesn’t know how much money Brobeck had failed to pay the plan. Snyder says partners have lost about half their retirement funds. That’s because the plan had an unfunded component, which was dependent on the firm continuing to be profitable. The liquidation committee will have to wrestle with a number of other issues, such as potential claims from partners over unpaid bonuses and lost capital. Tower Snow Jr. and other former partners who joined Clifford Chance have a $10 million arbitration claim against Brobeck for breach of fiduciary duty, breach of partnership agreement, and defamation. Brobeck has a counterclaim of $10 million against the group for breach of fiduciary duty. Snyder says he expects the wind-down of Brobeck to take at least as long as it has taken Pettit & Martin. Although Pettit disbanded in 1995, a former partner is still dealing with the firm’s business. But Snyder, 60, says he doesn’t plan to be involved with Brobeck’s liquidation beyond the first couple of years. Currently, the liquidation committee has a staff of about 30 people. Snyder says several retired partners are also lending their help at no cost. The committee members are getting some compensation for their efforts. Snyder’s compensation of $600,000 is contingent on the firm’s debt being paid off. He says the sum is about what he was receiving as a semi-retired partner at Brobeck. In the meantime, Snyder is being paid $6.75 per hour — California’s minimum wage — in order to be counted as a member of the firm’s health plan. The plan requires at least one active member in order for former employees to receive COBRA coverage.

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