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Beth Harwood is a single mother who can’t afford health insurance for her 13-year-old daughter. “I’m living off my nest egg, and I’m beginning to see the bottom of the nest, and it’s scary,” says Harwood. J. Bryan Connaughton is out of work, has no health insurance, and couldn’t afford to go to his brother’s out-of-town wedding. “I’m stressed out, my wife’s stressed out. It’s bad,” he says. Lynn Cleckler, who suffers from a serious eye disease, has no health insurance, and her husband is a diabetic whose medicine costs $500 a month. She also just lost her job: “This really set us back. It’s like a blow, like a train wreck.” These are just three of the hundreds of former staff workers at Brobeck, Phleger & Harrison whose lives have been upended in the wake of the San Francisco firm’s collapse. To be sure, Brobeck’s partners have suffered financially, losing in the aggregate millions of dollars in capital. But the staff — arguably the least at fault for Brobeck’s problems and the most vulnerable — have fared worse. Nearly all of Brobeck’s partners landed at other firms in a matter of weeks. But many of the firm’s document processors, computer technicians, and secretaries haven’t been so lucky. It’s difficult enough that they were abruptly let go in a cruel job market without a penny of severance pay. But in the chaos of Brobeck’s abrupt collapse, their problems have been exacerbated through a series of errors, oversights, or perhaps just plain stinginess, leaving many frightened and bitter. Particularly troubling, their 401(k) funds have been frozen, leaving many without access to emergency savings. What’s left of management at Brobeck acknowledges the staff’s difficult plight, but offers little in the way of immediate relief. “I have no doubt people are totally confused,” says Stephen Snyder, the former Brobeck chairman who heads the firm’s liquidation committee. Snyder, who was not involved in management in recent years, says his small team is still trying to sort out details relating to various benefits, and is doing the best it can with limited resources and severe spending restrictions imposed by Citibank, N.A. “I’m here working on the problem, and I’m not going anywhere until it’s solved,” says Snyder, who headed Brobeck in 1996 and 1997. When staffers were shocked by the news of Brobeck’s closure in late January, then-chairman Richard Odom offered words of comfort. “I pledge to you that we will do our best to get through [this time] — and to help you get through it — with as much dignity and sympathy as possible,” he wrote in a Jan. 31 memo. But in the months since, many ex-Brobeck staffers have felt their dignity eroded and seen few signs of sympathy from the firm. In interviews with 16 workers, every one expressed frustration at the absence of communication and support from Brobeck as they’ve scrambled to find information about health insurance, 401(k) money, and other benefits. For many, the only source of information has been an e-mail network run by Jim Lewis, who coordinated computer training at Brobeck. From his modest apartment on the edge of San Francisco’s Mission District, his computer squeezed next to his refrigerator, Lewis has spent his days since January passing along useful information to the nearly 300 staff and roughly 115 associates on his list. Lewis, who has taken on this role at his own expense, says he’s received well over 2,000 e-mails since then. “The lack of communication [from Brobeck] has been awesome,” says Lewis. “I’ve gotten e-mails from some frantic coworkers.” “Without Jim Lewis we all would have been totally set loose with no life preservers,” says David Liebendorfer, who worked at Brobeck for 16 years as a document processor and is now unemployed. “I have pored over every e-mail seeking some solace and information.” There’s no estimate of how many former Brobeck staffers are still jobless. At the end, the firm employed roughly 600. Some got employed at firms like Morgan, Lewis & Bockius, but the firm won’t say how many it took on board. Many others have been unable to find work. In early April, Lewis’s network was buzzing with complaints about the workers’ 401(k) plans. When desperate ex-Brobeckers tried to withdraw money from those accounts to pay bills, they discovered their accounts were frozen. They also found out that Brobeck had failed to pay the plan’s administrative fees for the last three quarters of 2002. To their dismay, they learned that those unpaid fees would be deducted from their accounts. At press time their money was still locked up. Snyder says the 401(k) situation has been complicated by the resignation of the plan’s trustee, UMB Bank, N.A. He says he’s not sure why UMB resigned. UMB vice president Larry Rudawsky said the bank could not discuss the Brobeck plan without the client’s written consent, which Snyder said he couldn’t provide. Still, Rudawsky noted, “it’s a bad situation for Brobeck’s former employees. … I could understand why [they'd] be frightened and upset.” In early April, Brobeck’s liquidation committee released a memo to ex-employees that summarized some aspects of the 401(k) plan, although it couldn’t tell them when they’d get their money. Whatever the reason for the freezing of accounts, Brobeck’s staffers have suffered. “I’m in danger of losing my home, because we can’t afford the mortgage,” says Kathy Wood, a former document processor at Brobeck who needs to tap her 401(k) funds for living expenses. Wood, who gave birth in March, says she’ll have to go back on the job market much sooner than she planned. Making matters worse, many have been panicked about their health insurance. Workers have received mixed and confusing signals about whether they’re covered under COBRA and how long that coverage will last. (COBRA, the Consolidated Omnibus Budget Reconciliation Act, gives certain workers the right to temporary continuation of health coverage at group rates, paid by the worker.) With former colleagues desperate for information, Lewis and a few others have researched insurance issues and posted updates on the e-mail network. Snyder says it’s the responsibility of the health insurers, not Brobeck, to communicate with participants. He admits that he’s been frustrated about health benefits, too. “I understand it’s difficult to take a 20,000-foot view when the pharmacy won’t give you drugs,” says the ex-chairman. “I understand everybody’s angry.” More than 30 Brobeck staffers, including Lewis, have vented that anger by taking legal action. In mid-March they filed a state court class action in San Francisco against Brobeck, alleging violations of a California law that requires employers to give workers 60 days’ notice before a mass layoff. Seeking compensation for two months’ pay and benefits, the suit also targets Morgan Lewis as the alleged “successor-in-interest” to Brobeck. The plaintiffs claim there was “an interrelation of operations, common management, and … common ownership” of the two firms. Brobeck collapsed in the wake of failed merger discussions with Morgan Lewis, which quickly picked up more than 150 Brobeck lawyers. Morgan Lewis declined to comment. Former chairman Odom, now a partner at Morgan Lewis, also declined to comment about the staff’s problems. Some of Brobeck’s ex-workers are trying other avenues for relief. Connaughton, a former information technology manager at Brobeck, is so frustrated at the 401(k) debacle that he’s written his congressman. And he is furious at Brobeck’s partners: “The partners paid themselves half a million bucks apiece, but they did not pay the administrative fees of the 401(k) plan. … They’re sitting fine and happy in their houses. They’re not worried about how they will eat next week.”

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