A once-leading Chicago law firm has been liquidated in the bankruptcy court – causing a row between the firm's past and present partners on who owes what.
At its height, Keck Mahin & Cate was one of the biggest practices in Chicago, with 350 lawyers nationwide. It ceased trading 18 months ago.
It is understood the firm has gone into liquidation because it expanded offices too quickly.
Its liquidation plan proposes that as many as 190 partners – some of whom left the firm over 10 years ago – pay money to creditors.
The amounts being demanded range from $5,000 (£3,000) to $100,000 (£62,500) per former partner in a bid to raise between $1.3m (£812,500) and $3.6m (£2.25m).
The plan is due be filed before the bankruptcy court on 15 April by four of the firm's ex-partners, who make up the liquidating committee, and two key creditors' committees. One of these consists of six former partners who represent about 90 other ex-partners who loaned the firm $5m (£3.1m).
The remaining 90 or so ex-partners – including former vice-presidential candidate Geraldine Ferraro, former Texas Governor Mark White and Senator Ted Kennedy's wife, Victoria Reggie – have not been consulted on the plan.
An insolvency partner from a UK City firm says: “It's certainly not common for a UK firm to go bankrupt – especially not large ones. I'm not so sure of the position in the US because there are far more firms there.”
He says, however, that the former partners of US firms could be better off than their UK equivalents because US firms allow partners a form of limited liability – a practice currently banned in the UK.