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Former employees of the defunct law firm Brobeck, Phleger & Harrison have long voiced concerns that they would get shortchanged as they vie with landlords for a share of the bankrupt firm’s assets. When Brobeck bankruptcy trustee Ronald Greenspan made a settlement offer to the employees late last year, some of them said their worries were realized. Greenspan has offered to honor up to $10 million in claims for back pay and other compensation. Some employees could see less than $5,000, while others may receive $100,000 or more, depending on their position, where they worked, whether they participated in firm investment programs and other factors. The unhappy former employees now have a lawyer in their corner. Scott McNutt, a partner at San Francisco’s McNutt & Litteneker, said earlier this week that he has agreed to represent any employee who opts out of Greenspan’s settlement agreement for a contingency fee equal to 25 percent of the difference between the proffered settlement and the final recovery. McNutt recently set up a Web site for the former employees, www.ml-sf.com/ brobeck. And since he began contacting the 1,000 or so former employees in recent weeks, McNutt said about 300 of them have signed up with him. McNutt said he agreed to represent the ex-employees � led by an ad hoc committee chaired by the firm’s former executive director, Abe Isenberg � “because of the belief within the legal community that the employees of Brobeck were very shabbily treated.” After a short hearing Wednesday, where U.S. Bankruptcy Judge Dennis Montali allowed Greenspan’s settlement offer to move forward, two associates from McNutt’s firm said the trustee is asking the former employees to give up substantial claims in exchange for expediency. “If they’re willing to forgo every last dime because it means getting paid quickly, that’s up to them,” said McNutt associate Kevin Coleman. The success of the ad hoc committee in organizing employees skeptical of the trustee’s offer represents a victory for former Brobeck senior counsel Jayne Loughry. She has been the most vocal of the former employees � associates and support staff � since the firm collapsed, arguing that employees stood to lose out to landlords when it came to doling out the money collected from former Brobeck partners. “The trustee is a fiduciary for all creditors, and if he’s going to push down creditors, he should push them down across the board,” McNutt said. “I don’t see him low-balling landlords in the same way.” Margaret Garms, a lawyer with Thelen Reid & Priest who represents University Circle Investors, disagrees with that assessment. “I think the trustee is being more generous than he really needs to be. I think it’s a favorable settlement,” for the employees, she said, adding that Greenspan “is making an offer to them that is every bit as fair as [what] he offered to us.” Lawyers for Greenspan did not return calls by press time. Garms points out that in a settlement with Greenspan, her client agreed to lower its claim by about $5 million, to $21 million. “There’s not a competition here at all,” she said. “We are all creditors. We have a claim. The trustee disagreed with the amount of our claim. We ended up having to take a settlement that reduced our claim by a significant amount of money.” But Coleman said all employees aren’t treated equally in the trustee’s settlement offer. For example, he said, the trustee offers significantly less money to those employed in offices with less than 50 workers, arguing that a federal law requiring post-termination pay only applies to offices with more than 50 workers. And he said associates could forgo bonus claims worth a total of $1.9 million. For other workers, Coleman said, Greenspan’s settlement could prove to be the best deal. Isenberg, the former Brobeck executive director, agreed, and said that even those former employees who end up taking the settlement will benefit from consulting with a lawyer not working for the trustee. “We just want to make sure that the trustee honors his responsibility, and the amounts due to both the landlords and employees,” he said.

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