Orrick to hold back capital for departing partners
Partners who leave Orrick Herrington & Sutcliffe could face a lengthy wait to receive their capital due a new loan requirement by the firm's bank, reports The Recorder. A letter sent to former partners last month said that Orrick had amended its "primary credit agreement with our banks" and that a new provision meant repaying partners at the usual time, in the spring, would cause it to default on the loan. Under the new credit agreement, the firm cannot pay departing partners their capital until the fourth quarter of the year following the one in which the partner departed. For instance, if someone leaves Orrick in January, that partner would not receive their capital for at least 22 months. It is unclear whether Orrick is the only large law firm facing such a restriction. In a statement on Tuesday (5 May), Orrick called the change "standard," and said it is consistent with the firm's partnership agreement. The letter to former partners said the firm's bank had required it.
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