Revealed: Altheimer’s $30m debt mountain

Former partners set to sue; Salans poised to snap up Eastern European offices

Disintegrating Chicago firm Altheimer & Gray is buckling under nearly $30m (£18m) worth of debt – nearly a quarter of its total revenue for 2001.
The Lawyer can reveal that this double-digit debt level at the firm, which for its last published financials in 2001 generated $117m (£70.2m) in revenue, was the final straw that pushed Altheimer to announce plans to dissolve nearly two weeks ago.
It has also since emerged that Altheimer’s partners will
not be paid this month. LaSalle Bank agreed to provide interim financing, but only for its remaining employees, which at the last count numbered 700 staff.
A group of up to 15 retired partners are considering their options, including potential legal action, after being told last Wednesday (2 July) that they would not be paid their pension benefits since the firm had no cash reserves left.
In 2001 the firm did away with its unfunded pensions benefits, although a small number of partners were still entitled to receive some payments for a period of time.
However, for other parts of Altheimer, last week yielded more positive news as Salans emerged as a bidder for its well respected Czech, Polish, Romanian, Slovakian and Ukranian practices.
The future of Altheimer’s Hungarian practice is undecided. The office is an association between the US firm and Budapest practice Ban S Szabo & Partners.
In San Francisco, Alth-eimer’s recently established office is talking to five or six interested suitors. The office has six partners and 11 associates in real estate, litigation, intellectual property and tax.
It is still unclear what the future is for the rest of the firm. Last week The Lawyer revealed that it had put off a vote on dissolving the partnership that had been due on Monday (30 June).
However, Altheimer made the move in an effort to prepare for a merger. It also came to light that potential suitor Sonnenschein Nath & Rosenthal agreed to talk, but only after Altheimer had dissolved so as to avoid liability claims later on down the line.