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The New York Law Journal has consulted with experts, and finds that lawyers who fled Dreier LLP as soon as they heard that founder Marc Dreier was arrested and indicted could face legal problems of their own:
The departed partners might be held liable for any of the firm’s debts, and also face disciplinary action for any missing escrow funds. Further, they might be asked to return income they received from clients for work on unfinished matters they took with them when they left the now-defunct firm…
“When law firms dissolve, the court wants one thing and one thing only. They want money put back in the estate to pay back the creditors,” especially when there are clients who have lost money, said an attorney who specializes in law firm ethics and professional responsibility who asked to remain unnamed.
“In connection with partners in law firms, the interplay between the limited liability statute and the bankruptcy law is not entirely clear so that any partner who was being held out to the public as a partner is under some risk of having liability,” he added.
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