Thelen Trustee Reaches Deal With Holdout Ex-Partners

March 9, 2015 – In The News

Yann Geron was quoted in the Law360 article “Thelen Trustee Reaches Deal With Holdout Ex-Partners.” Full text can be found in the March 9, 2015, issue, but a synopsis is below.

A group of former Thelen LLP equity partners that had held out on striking a deal with the bankruptcy trustee agreed to settle, with each partner paying an undisclosed amount to end their obligations in the firm’s collapse, according to a proposed deal filed in New York bankruptcy court.

The court-appointed trustee, Yann Geron, has settled clawback claims against more than 130 attorneys but has launched suits as recently as August 2013, seeking the return of partner draws, unpaid capital contributions and outstanding loans receivable.

The largest single group of former partners who hadn’t yet made peace with the estate lost a bid in November to keep cash advances they’d received in the months leading up to Thelen’s 2008 collapse.

Judge Gropper found in that ruling that the former partners had no right, contractual or otherwise, to retain bi-monthly draws that wound up exceeding their share of year-end partnership income.

Judge Gropper's November decision prompted renewed settlement talks, Geron told Law360.

"The resulting settlement takes into consideration the impact of that decision while also allowing the parties to close this chapter without further litigation," Geron explained. "With the exception of one partner who opted out of this settlement, the Whitmer Group settlement marks the successful conclusion of all clawback litigations in this estate."

There is a court-ordered mediation with one partner scheduled to occur next month, Geron noted.