The fallout from the demise of Chicago-based Altheimer & Gray was still being felt almost two years after the firm closed in June 2003 and entered bankruptcy that October.
It took until this January for the firm to file a liquidation plan, and despite opposition from 10 Altheimer partners, US bankruptcy judge, Judge Carol Doyle, approved the plan in February.
Under the plan, nine Altheimer lawyers, including the executive committee, have become personally liable for the payment of $6.8m (£3.8m), or 45 per cent, of the firm’s remaining total debt. The remaining $8.3m (£4.6m) debt has been split among the firm’s 50 other former equity partners.
Altheimer’s sudden collapse in June 2003 stunned the legal market, although the 88-year-old firm had shown signs of struggling to boost profitability and retain both clients and partners.
At the time of the collapse, the firm reported being $31m (£17.2m) in debt, but with more than $27.8m (£15.5m) worth of work in progress and $30m (£16.7m) of accounts receivable or uncollected bills, the firm’s partners were of the belief that it was still solvent.
However, the firm, which had 310 lawyers, entered bankruptcy in October when a group of unsecured creditors filed Chapter 7 bankruptcy proceedings against it, claiming it owed them $1.3m (£720,000).
Altheimer’s partners were later absorbed into a range of firms internationally, including Salans, which took the Bratislava, Bucharest, Istanbul, Prague and Shanghai offices. Chad-bourne & Parke acquired Warsaw and Kiev, with Kilpatrick Stockton taking the London practice.