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Facing a lawsuit from its San Jose landlord, the now defunct Skjerven Morrill has filed for Chapter 7 bankruptcy. The bankruptcy petition, filed in the U.S. Bankruptcy Court for the Northern District of California on Sept. 11, said that the firm has estimated debts of $1 million to $10 million and estimated assets of the same amount. Documents filed with the petition also note that the firm was in arbitration over a suit filed by former name partner Alan MacPherson who left Skjerven in April 2002. Skjerven announced it was disbanding 10 months later. Former Skjerven partners Bruce McDiarmid and Edward Anderson, now partners at Pillsbury Winthrop and Sidley Austin Brown & Wood respectively, could not immediately be reached for comment. Both are members of the firm’s seven-member dissolution committee. Randy Rogers, a partner at Winston & Strawn’s San Francisco office who is representing Skjerven in the bankruptcy, said the bankruptcy filing would put a one-year cap on the amount of unpaid rent sought by Skjerven’s four former landlords. Skjerven had planned to begin a formal proceeding after Citibank was paid off, Rogers said. “The reason that a Chapter 7 filing was chosen over an assignment for benefit of creditors is that a Chapter 7 filing has a landlord cap in it.” A former partner, who spoke on condition of anonymity, said the firm’s San Jose landlord, Equity Office Properties, filed suit against Skjerven in August seeking $4 million. The suit also names 14 individual Skjerven partners who signed the lease in 1996 when the firm was a general partnership. After paying off $5 million it owes Citibank, Rogers said Skjerven owes a couple hundred creditors. Anne Bothwell, of Emeryville’s Bothwell Marketing, said her firm is still owed a significant sum of money for a print advertising campaign. She and other creditors were surprised by Skjerven’s sudden collapse. “It was different than Brobeck” since Skjerven didn’t have a lot of debt, Bothwell said. “Some of us believe the partners could have worked their way out. They didn’t seem to have the leadership or will to roll up their sleeves.” In addition to the suit by its San Jose landlord, the bankruptcy filing notes Skjerven had been sued by a subsidiary of Boston Properties and former partner MacPherson. MacPherson’s suit, filed in Orange County Superior Court, is for tortious termination, disclosure of medical information, infliction of emotional distress, defamation, age discrimination, harassment and breach of fiduciary duty. MacPherson resigned from Skjerven six weeks after partners voted to replace him as chairman. At the time, Anderson said MacPherson had “become out of step with the direction of firm management and the consensus of the partners.” MacPherson launched his own firm, MacPherson Kwok Chen & Heid, with offices in Irvine and San Jose. The bankruptcy filing also indicates Skjerven’s decline in fortunes over the past two years. In 2001, the firm reported $61 million in revenue. The bankruptcy filing shows that grosses declined to $41.9 million in 2002. In the first seven months of this year, the firm collected $8.4 million in revenue — though much of that presumably came after the firm announced in February that it would dissolve. This year, the firm also made $380,000 from the sale of its condominium in Lake Tahoe. The sale closed Feb. 2, the day before Skjerven announced that partners had voted to disband the firm.

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