Thelen Seeks Approval of $1.4M Citibank Settlement

December 5, 2012 – In The News
Law360

Thelen LLP's Chapter 7 trustee asked a New York bankruptcy judge Tuesday to approve a stipulation under which the debtor will pay $1.4 million to close out Citibank NA's $7.5 million claim for administrative costs against the defunct law firm.

Yann Geron asked U.S. Bankruptcy Judge Allan L. Gropper to approve the stipulation, which fixes and allows the balance due on Citibank's secured claim and authorizes him to pay the money from the debtor's estate. Once such payment is received, all of Citibank's claims against Thelen will be deemed paid, settled and withdrawn.

“The trustee believes that the stipulation is the most effective means of obtaining the necessary authorization to fix and pay the remainder of the Citibank debt ... while at the same time minimizing the costs to the bankruptcy estate,” the motion said. “Accordingly, the trustee respectfully submits that the stipulation is in the best interest of the debtor's estate and requests that it be approved.”

According to the motion, three months after Thelen's Sept. 18, 2009, Chapter 7 filing, Geron and Citibank entered into an agreement holding that the bank had a valid, enforceable and allowed perfected lien on all of the debtor's cash collateral, accounts receivable, contract rights, cash, securities and other assets.