NEW YORK, March 23 (Reuters) - The bankruptcy trustee
for Thelen has recouped nearly $1 million from a group of law
firms that hired partners from the now-defunct firm.
U.S. Bankruptcy Judge Allan Gropper, in the Southern
District of New York, on Wednesday approved more than $700,000
in settlements between six law firms and Thelen trustee Yann
Geron. Those settlements are in addition to more than $200,000
that 10 other firms paid last month.
The settlement proceeds stem from so-called "Jewel" claims
that Geron asserted under the unfinished business doctrine. That
doctrine enables the trustee of a bankrupt law firm to collect
profits generated by work originating from the failed firm that
the partners took with them. Jewel claims get their name from
the 1984 California state court case Jewel v. Boxer, 156 Cal.
App. 3d 171 (1984).
The law firms in the most recent settlements are Morgan
Lewis & Bockius; Davis Wright Tremaine; Sedgwick, Detert, Moran
& Arnold; LeClairRyan; Butzel Long; and Ober Kaler. The larger
firms settling in February were K&L Gates; O'Melveny & Myers;
McDermott Will & Emery; and Alston & Bird.
In September, Geron filed 93 adversary actions seeking
millions from former Thelen partners, the firms where they went
and former Thelen clients. Many of those are still pending.
Geron's actions included Jewel claims against the law firms,
fee disgorgements from the individual attorneys and claims
against former Thelen clients for unpaid bills. The money
collected will be used to pay off the bankrupt firm's creditors.
Many of those parties have challenged Geron's claims,
including eight lawyers now at DLA Piper.
"There's good progress, but there's still work to be done,"
Geron said Friday.
Spokeswomen for Butzel Long and for Morgan Lewis
declined comment. Sedgwick was not immediately available
for comment. The other firms involved in the latest settlements
did not respond to messages seeking comment.
Thelen was created by the 2006 merger of San Francisco-based
Thelen Reid & Priest with New York-based Brown Raysman Millstein
Felder & Steiner. Problems with integrating the bi-coastal
practices after the merger plagued the firm, which voted to
dissolve in 2008 and filed for bankruptcy in 2009. At its peak,
it had about 600 attorneys in eight offices in the U.S. and
(Reporting by Leigh Jones)
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