Judge Frees Money for Dreier Insurance Policies, Hears Commingling Warning
The chief bankruptcy judge in Manhattan has authorized payments to keep malpractice and health policies in place for the Dreier law firm—good news to a litigation associate who attended a hearing to learn whether the delivery of his child would be covered.
The lawyer, Timothy Joseph McAuliffe Jr., told the New York Law Journal he attended an emergency hearing Friday to learn whether insurance premiums would continue to be paid by the firm. His wife’s due date is in just a few weeks. “Know anybody that wants to hire a securities arbitrator?” McAuliffe asked.
Malpractice insurance was another concern for lawyers at the firm, after news surfaced that the firm’s malpractice insurance had lapsed.
Chief Bankruptcy Judge Stuart Bernstein authorized the payment of $666,000 to cover the insurance policies as well as wages for 17 Dreier lawyers and employees who are remaining to wind down the firm’s affairs, the New York Law Journal story says. The firm’s founder and only equity partner, Marc Dreier, has been accused of stealing $380 million by selling forged debt instruments to hedge funds, possibly to finance an extravagant lifestyle.
Bernstein also authorized appointment of a trustee to handle the firm’s Chapter 11 hearing after being warned by receiver Mark Pomerantz that there was “a huge amount of commingling” between assets of the firm and those of Marc Dreier, the story says.
