Bankruptcy Judge Blesses Thelen Partner Settlements

March 1, 2013 – In The News

A New York federal judge has approved settlements between the trustee for bankrupt Thelen LLP and three former partners who agreed to repay compensation from business completed after the law firm dissolved in 2008.

U.S. Bankruptcy Judge Allan L. Gropper signed off on the clawback deal between Yann Geron, the Chapter 7 trustee for Thelen, and former partners. The partners each agreed to pay 68 percent of the claims asserted against them. In exchange, they will be released from all further claims by Thelen that relate to the firm.

In 2011, Geron reached a $5 million settlement with 93 partners who remained at Thelen after it voted to dissolve the partnership, about a 70 percent discount on the firm’s initial claims, according to court documents. The trustee later reached settlements with 35 additional post-dissolution partners.

In September, Geron asked Judge Gropper to greenlight reduced settlements over precollapse compensation with two of its former partners who met hardship requirements.