Sue Heller Now, or Hold Your Peace

The estate of Heller Ehrman will spend about $20,000 inviting former clients to sue it now for malpractice or forever hold their peace.

Notices will be printed in major publications in the U.S. and Asia in an attempt to reach over 11,000 former clients of the defunct firm, inviting them to file proofs of claims with the U.S. Bankruptcy Court for the Northern District of California.

While the date applies to all creditors with potential claims, Heller hopes to draw out potential malpractice claims by the April 27 deadline, because its malpractice insurance will run out in June.

In January, Judge Dennis Montali denied the estate’s request to buy three years of malpractice insurance, agreeing with the creditors committee that the risks did not outweigh the estimated $10.2 million price.

Malpractice claimants would likely receive more money if they file while Heller is still covered. If they file after the insurance runs out, they line up with other creditors seeking to be paid from whatever may be left in the estate.

At a hearing Friday, Thomas Willoughby told Montali that Heller now has tail insurance through June 15, "and it seems appropriate to serve a claim so within the time, on April 25 or 26, the claims can come in and we know what the universe says.”

—  Amanda Royal