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Almost 200 former Brobeck, Phleger & Harrison partners have agreed to fork over more than $22 million to rid themselves of liability for the firm’s collapse. As of Friday, 189 partners had reached individual settlements with Ronald Greenspan, the trustee of Brobeck’s estate. According to papers filed by Greenspan Friday, the settlements range from $4,732 to more than $500,000 and average $118,570 per partner. “These women and men had the good judgment and good character to settle this and accept their responsibility to creditors,” Greenspan’s attorney, Bennett Murphy, said Tuesday. The filing does not cite the amount of each partner’s payment but notes 30 partners would be paying less than $50,000, while three partners are paying more than $400,000. Greenspan alleges that the former partners took distributions and bonuses from the firm while it was essentially insolvent in 2001 and 2002. But the settlements amount to just 8 percent of the $275 million that Greenspan had said 224 former partners were liable for in the letters he sent to them in November. In that letter, he gave partners two deadlines to respond. But before the first one expired last month, he began filing individual suits against the partners. One of the attorneys for former partners said he was shocked that so many had taken the offer. “A lot of people said ‘I’ll never settle ever,’” he said. But they got scared, and “the calculus changed” as a smaller group was left to fight the trustee. Greenspan’s motion indicated that 33 partners had not yet agreed to settle; a few others are off the hook due to death or illness. But Murphy, a partner at Hennigan, Bennett & Dorman, said Tuesday that an additional six partners have now sent in a signed agreement and deposit check, and he expects about nine other partners will do so by the end of the month. Former Brobeck Chairman Tower Snow Jr. isn’t among the settling partners, but top litigation rainmaker Steven Zager has settled since the court filing. Greenspan must win the bankruptcy court’s approval of the individual settlement amounts he submitted Friday. According to the court document, approximately 1,145 creditors have filed claims against Brobeck totaling $258 million. The biggest creditors, Brobeck’s former landlords, support the agreements. The court filing notes that many partners refused to settle unless they were assured that Brobeck’s principal landlords would not assert claims against them as a result of the firm’s default under its leases. At Greenspan’s urging, the landlords issued a “comfort letter” to partners saying they wouldn’t be sued in Brobeck’s stead, but reserving the right to pursue “cut through” claims for their individual liability. The estate hasn’t reached a settlement with Brobeck’s former liquidation committee, which Greenspan has repeatedly rebuked for its actions after Brobeck closed its doors in February 2003. “Among other things, the liquidation committee directed Brobeck’s counsel, at Brobeck’s expense, to undertake activities to assist the partners in protecting themselves from liability to Brobeck, including liability to return wrongful distributions,” the Feb. 18 filing states. The trustee concluded that “a substantial portion of the liquidation committee’s work had been of no benefit to Brobeck, a plainly insolvent entity at the time.” Greenspan contends that the four former members of the liquidation committee have liability for the excess of the compensation they received over the value of their services and for “the diversion of firm assets to benefit equity owners at the expense of creditors.” Stephen Snyder, who headed up the liquidation committee, said he disagrees with the trustee’s charges. The trustee’s job “is to find out every possible way” to recover money for the estate, he said. Snyder has settled the trustee’s individual claims against him relating to his distributions and capital investment in the firm. He didn’t say how much he paid. “Even though you might disagree completely,” Snyder said, “you may pay something to get it behind you. That was part of the synergy that caused this settlement to occur.”

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