Heller Ehrman’s creditors have so much faith in Bill McGrane’s ability to shake millions of dollars from the defunct firm’s banks, they seem to have forgotten he’s a mere mortal.
The unsecured creditors’ committee wants to pay 11-lawyer McGrane Greenfield $1 million up front to pursue more than $58 million it says the banks shouldn’t have.
But at a hearing to approve the employment of McGrane Greenfield (free reg. req.) this afternoon, bankruptcy Judge Dennis Montali momentarily stumped attorney Tom Willoughby, who represents the creditors’ committee, by calling the prompt payment of $1 million to an 11-lawyer firm “a staggering amount,” and asking what happens if the very next day, McGrane got hit by a bus.
"That," Willoughby replied in a smallish voice, "is an eventuality that I did not think of." Willoughby pointed out that two other law firms had agreed to similar terms and McGrane’s firm had the best bid.
Montali said he didn’t question their choice of counsel. “I know Mr. McGrane,” Montali said. “He’s irrepressible.” Montali did ask, though, if it wouldn’t be a good idea to add a provision to cover their bases in case something bad happened to their two key men, McGrane and McGrane Greenfield partner Chris Sullivan.
He went on to overrule objections raised by Bank of America’s lawyers, including Pillsbury Winthrop partner David Minnick, who worried that handing $1 million to McGrane Greenfield would imperil the bank’s collateral.
Montali wrapped up the hour-long hearing by saying that he’s inclined to approve the McGrane firm when he gets a new, improved proposal with clarifications.