Ex-Heller Chair Denies That Partners Were Paid $9M in Phony Profits
The former chairman of Heller Ehrman is denying allegations by unsecured creditors that the firm distributed $9 million to partners above and beyond profits for 2007.
A critical report filed in bankruptcy court by the creditors claims the firm was attempting to boost its 2007 business numbers in an effort to retain partners. The $9 million was to be booked as “shareholder loans” but an accountant was not allowed to send acknowledgements of the loans, the report asserts.
“The assertions in the creditors committee report are without merit and are not supported by citations to any source,” former chairman Matthew Larrabee said in a statement e-mailed to the Recorder. “These claims will be vigorously defended at the appropriate time.”
Thomas Willoughby, counsel for the creditors committee, told the Recorder that the claims in the report are based on a review by the committee’s financial adviser, Development Specialists Inc.
The creditors claim that Heller partners should have to repay $106 million paid to them and to pension plans in 2007 and 2008 as the firm experienced financial problems.
