Ronald Greenspan, the trustee of Brobeck Phleger & Harrison’s bankruptcy estate, has issued a barrage of law suits against former partners, including ex-chairman Tower Snow, in a bid to recover some $275m (£146.3m) in distributions and bonuses.
Greenspan, through his law firm Hennigan Bennett & Dorman, has filed suits against more than 220 partners, seeking distributions and bonuses paid after the firm became insolvent. A portion of Brobeck’s debt to major creditor Citibank is also being sought from former partners.
In one of Greenspan’s largest individual complaints, he has sought the return of more than $3.1m (£1.7m) from former corporate partner Warren Lazarow.
Snow, meanwhile, has been slapped with a suit demanding the return of $2.7m (£1.4m), including $2m (£1.1m) in distributions received in 2001, $503,000 (£267,500) in 2002 distributions, plus $237,000 (£126,100) in capital contributions that were refunded to him after he led 16 Brobeck partners to Clifford Chance in 2002.
It is understood that former Clifford Chance partners Michael Torpey, Jim Burns and Karen Johnson-McKewan, who left for Orrick Herrington & Sutcliffe’s San Francisco office last year, are also the subject of suits.
The suits claim that former partners continued to take distributions after Brobeck allegedly became insolvent in 2001, and that the firm buried itself under a debt mountain rather than reduce partner distributions after income dropped in the second half of 2000.
Under Californian law, limited-liability partnerships can make distributions to partners only when the firm’s total assets exceed liabilities.
The suit against Snow comes amid protracted negotiations between Snow and Clifford Chance. It is understood that both parties are ironing out an agreement under which Snow will leave Clifford Chance’s equity but remain at the firm as counsel.