Dreier Bankruptcy Trustee Touts Recovery of Millions of Dollars
As Marc Dreier was sentenced yesterday to 20 years in prison for bilking investors out of hundreds of millions of dollars through the sale of phony promissory notes, a bankruptcy trustee was continuing to wind down operations of his onetime Dreier law firm.
The law firm Diamond McCarthy is seeking $450,000 in interim fees and expenses for its work in the case, the New York Law Journal reports. The fee application (PDF posted by the New York Law Journal) says 14 lawyers have been working on the Chapter 11 case, five or six of them nearly full time, and total fees and expenses were almost $845,000 for a three-month period ending March 31.
“Dreier’s arrest on Dec. 7, 2008 was akin to dropping a neutron bomb on Dreier LLP—all the trappings of an ostensibly thriving legal practice were intact, but all of the legal and support staff disappeared overnight, all ordinary business transactions were interrupted, law enforcement entered the premises to search for documents and other materials, and a court appointed receiver … took over daily management of Dreier LLP while awaiting the appointment of a bankruptcy trustee,” the application says. “In these circumstances, stepping in to take charge of and stabilize the estate presented enormous challenges to the trustee, her team of DM attorneys and her financial advisors.”
The New York Law Journal summarizes the work that has been done, including:
• Recovery of $400,000 through an auction of furniture, fixtures and other equipment.
• Rejection of burdensome office leases, saving the firm’s estate $1 million.
• Collection of $3.4 million from former clients.
