X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
As reported in your March 22 edition, [ Judge Montali OK's Brobeck settlements], almost all the former Brobeck partners have now been allowed to settle their personal liabilities. The bankruptcy Trustee had sued for $275 million, the amount which the Trustee compellingly argued the partners had wrongfully paid themselves over the last two years of Brobeck’s existence. Undoubtedly these partners are relieved and even delighted to have been given a rare chance to settle for a mere 10 cents on the dollar. These 207 partners can now put the Brobeck mess in the past and fully enjoy the huge amounts they’re making at Morgan, Lewis; Paul, Hastings; O’Melveny; Akin Gump; Sidley Austin; Orrick and other large firms where Brobeck partners landed. Before closing this chapter on the former Brobeck partners, I’d like to note a few other facts. It is of course well-known that the partners left Brobeck with some $50 million in secured bank debt, but when the partners fled Brobeck they also left Brobeck with hundreds of millions in unsecured debt owed to more than 19,000 creditors. That’s 19,000 employees, vendors, service providers, and even clients, left holding the bag. The banks can walk away, their secured debt having been paid from Brobeck’s receivables and other assets. The 207 former partners can walk away, having settled for just under $24 million. Left, however, are more than 900 unsecured creditors who still have claims on file for more than $200 million and who, at best, will recover only a small fraction of what they’re owed. And left completely out are thousands of businesses and individuals who will never get a penny back because the time for filing bankruptcy claims has passed. Many litigators might describe settling for 10 percent of potential liability as a nuisance value settlement. Partners at other debt-burdened law firms might now think of using Brobeck as the model for avoiding liability, but if so, they should factor in the likelihood of getting such an accommodating bankruptcy trustee. In any event, 207 former Brobeck partners are now free to move on, without further concern or accountability for the massive debt or the thousands of creditors they left behind. Going forward, perhaps the only interesting question is, how could anyone –� employees, vendors, service providers, clients, or even colleagues — ever feel safe doing business with any of the former Brobeck partners? Jayne Loughry San Francisco You can send Letters to the Editor to The Recorder, 10 United Nations Plaza, 3rd Floor, San Francisco, CA 94102; by fax at (415) 749-5549; or at [email protected].

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.