Friday, February 9, 2007
The New York Times has an article today about the particularly nasty allegations and counter-allegations in the Coudert Brothers bankruptcy. The one thing about which we can be sure is that the highly paid but oppressed and alienated associates at Coudert ought not to be concerned about, among other things, having the salaries paid to them in the last twelve months before bankruptcy voided as preferences.
The story quotes Leslie Corwin (left), a lawyer at Greenberg Traurig: "If you look at major bankruptcies among professional services firms, the facts are remarkably similar. They grew, they were not able to get adequate capital infusion and they borrowed money to bring in practice groups."
This is not to minimize the dislocation for the associates in a dissolving law firm, but being the equity claimant on the profits and assets of a law firm is not a riskless business. [UPDATE: Report on Coudert at WSJ Law Blog here.]