Larrabee to Staff: Expect News This Week

Thursday  Update: Heller to dissolve.

Heller Chairman Matt Larrabee sent an e-mail to “all hands” on Wednesday evening, apparently minutes after the conclusion of the firm’s secret videoconference of shareholders to discuss the firm’s fate.  In the memo Larrabee apologizes for management’s lack of communication with associates and staff — a theme that’s been apparent in the blogosphere and our own reporting this week — and promises more communication in the coming days. 

Here’s the memo, in its entirety, as obtained by Legal Pad:

To: All-Hands

I am profoundly sorry that I have not been in direct communication with you recently. We realize that there has been a lot of news coverage about our firm, and it is wrong to have that be your source of information. We have been focused on urgent and significant issues that are facing the firm and carefully considering our options. We also have been focused on trying to get answers to the many questions that we know need to be addressed.

While that may explain some of the private meetings and small-group discussions that have been held recently, we know that there has been a lengthy gap in communication that needs to be filled as soon as possible.

To that end, we are planning to hold meetings with everyone before the end of this week via video conference and/or local, in-person discussions. You will receive an invitation to participate as soon as we can finish gathering important information we know you seek.

Again, I apologize for not communicating with you sooner. We realize the anxiety that you are feeling and we are doing everything we can to find answers to your questions.

Matt

The legal community in San Francisco has universally expressed sadness at the potential demise of a pillar of San Francisco’s legal community.  It now appears that definitive news about the firm’s fate is forthcoming. However, partners reached after the late-afternoon video conference, even those who’d been more talkative earlier, were resolutely tight-lipped about any announcements or decisions made.  We’ll keep you posted.

—  Brian McDonough

Comments

[Lawcomment]

The announcement from Heller that it is working with its lenders and already subleasing floors in SF And NYC will probably trigger a response from its larger creditors. Even if the banks and landlords are willing to deal, the unsecured creditors and employees with severance claims should have learned from past cases that the sooner an involuntary bankrutpcy is initiated, the better if they want to capture what cash there is in the company. The firm may prefer to have its case filed in New York rather than California to take advantage of the pro business orientation of the New York court.

If the firm is allowed to channel its remaining cash and assets to the preferred creditors, there will be little available to the trade.

The firm has made it clear that it is liquidating and creditors who are on the outside looking in may not want to wait for the money to get divied up as the firm unwinds.