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A group of plaintiff lawyers indicated Tuesday that it would raise its bid to purchase rights to a suit against Clifford Chance relating to the collapse of Brobeck, Phleger & Harrison. But near the end of an all-day hearing it was unclear whether U.S. Bankruptcy Judge Dennis Montali would consider the offer or accept a $4.5 million deal that Brobeck bankruptcy trustee Ronald Greenspan reached with Clifford Chance to settle claims against the firm. The plaintiff lawyers — led by David McClain of Kazan, McClain, Abrams, Fernandez, Lyons & Farrise — had offered in August to pay $4 million for rights to a suit filed against Clifford Chance by a trust composed of former partners and employees. They claim Clifford Chance’s hiring of former Brobeck Chairman Tower Snow Jr. and 16 other partners led to the firm’s collapse in February 2003. In response to the bid by the plaintiff lawyers, known as the KM Group, Clifford Chance increased its original $3.75 million agreement. Greenspan then asked the KM Group if it wanted to increase its bid. “In the two weeks since, they have not come forward with an offer,” Greenspan testified. “We called counsel [Monday] and asked, ‘Are you coming forward with another bid?’” Greenspan’s attorney, James Johnston, of Hennigan, Bennett & Dorman, told Montali that he hadn’t heard from the KM Group until two minutes earlier when counsel for the group “whispered in my ear” that they were prepared to increase their bid. Montali asked lawyers for the Brobeck partners if they would drop their objection to the Clifford Chance settlement if he opened it up for further bidding. “To some extent, yes, but not entirely,” said David Stern, of Los Angeles’ Klee, Tuchin, Bogdanoff & Stern, who is representing 122 former Brobeck partners. While former partners have argued that the Clifford Chance litigation could bring in as much as $100 million, a chunk of which would go to the estate, Greenspan has questioned whether it would succeed. He has said one of the biggest sources of income for the estate is retrieving distributions that partners received when Brobeck was insolvent. Greenspan has invited Brobeck’s 230 former partners to a meeting in San Francisco on Dec. 9 to lay out his plans to settle claims against them. He sent them individual letters stating that from Jan. 1, 2001, through Dec. 31, 2002, partners received cash distributions of $275 million. He has offered to let them repay that money at an unspecified discount. In court documents Greenspan has said he believes Brobeck’s insolvency included part of 2002 and probably part of 2001, before Snow and other partners joined Clifford Chance. During questioning Tuesday, Stern suggested that Greenspan had not thoroughly investigated the exodus of partners to Clifford Chance. Greenspan said he had not interviewed the partners but had seen 200 to 300 e-mails they had sent from computers at Brobeck to Clifford Chance. Greenspan said he had also seen e-mails about a memo that Clifford Chance’s former regional managing partner of the Americas, James Benedict, sent to former Brobeck partner Michael Torpey requesting information about how much partners earned in 2001 and 2002 and about the firm’s securities litigation budget. Stern said Snow had a role in more than doubling bank debt and lease holdings and described him as “the pilot who pointed the plane at the mountain.” Greenspan responded that the Brobeck management committee and every partner had to vote on every lease. “Mr. Snow was not running an autocracy,” he said.

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