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A Law Firm's Long, Slow Dissolution

It's been nearly 18 months since Coudert Brothers announced its intention to dissolve and five months since the firm filed for bankruptcy. Yet as this New York Times article, The Complicated End of an Ex-Law Firm (2/9/07), reports, the firm's unwinding "continues to be a complicated, messy affair." From the article:

Creditors and at least one former partner have filed lawsuits against the firm. Malpractice claims have accrued as well. There are allegations in court filings that three overseas lawyers sequestered money from the firm as it tried to pay off its creditors.

And the committee for unsecured creditors contends that payments to partners were done improperly at a time when the firm should have known it was insolvent, an assertion that lawyers for Coudert deny. Although it is difficult to determine just how much is at stake, the lawyer for the creditors’ committee, David Adler of the New York office of McCarter & English, said the amount could exceed $25 million.

The article describes some of the lessons taught by the Coudert experience, such as the risk for firms with global ambition and threats to middle-sized firms from consolidation by others. Even more, the Coudert case is showing that questionable business practices are never the right approach; many of these are now coming to light in the bankruptcy proceedings. 

The irony of all of this is that while, apparently, Coudert couldn't make enough money to survive, it's now making profits for one constituency: the law firms working on the complex bankruptcy.

Posted by Carolyn Elefant on February 9, 2007 at 06:07 PM | Permalink | Comments (1)


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