Heller’s Optimistic Numbers: $325M in Assets, Capital; $72M in Liabilities
Heller Ehrman’s dissolution plan makes optimistic predictions about its ability to collect accounts receivable and may overstate its assets, say analysts who are divided on whether the firm will be forced into bankruptcy.
The plan, leaked to reporters and bloggers, was analyzed by the Recorder and Daily Journal (sub. req.). The document says that as of Aug. 31, the law firm had $257.8 million in assets, $72 million in liabilities and $66.7 million in capital.
Bankruptcy lawyer J. Scott Bovitz said predictions that the firm will collect 50 percent to 90 percent of $174 million in accounts receivable appear optimistic. He also thought assets appeared overstated. Still, he told the Recorder, the firm apparently has a lot of cushion and may be able to avoid bankruptcy.
But legal consultant Peter Zeughauser told the Daily Journal “it’s highly likely” that creditors will force the law firm into involuntary bankruptcy.
The dissolution plan does not include the cost of outstanding lease and payroll obligations, or the cost of “tail” malpractice insurance covering claims after the firm is dissolved, the stories say.
“The devil is in the details,” Stephen Snyder, the former head of Brobeck, Phleger & Harrison’s dissolution committee, told the Recorder.
