Summary: The bankruptcy case involving defunct law firm Howrey LLP is making strides as two settlement agreements were reached last week.
The creditors of Howrey LLP could be in for a pay day very soon, according to The Wall Street Journal.
A pair of settlements were reached this week by the bankruptcy trustee of the defunct law firm. The settlements were reached with the firm’s former landlord in Washington, D.C. and a group of former partners.
To read more about Howrey, click here.
The settlements should clear a path for a debt-repayment plan to be created in the case, which is more than three years old.
Allan Diamond, the bankruptcy trustee for the defunct firm, said that the deal with the landlord “removes one of the largest impediments to the trustee’s ability to work towards and propose a confirmable Chapter 11 plan in this case.”
Diamond filed the settlement papers on Wednesday in United States Bankruptcy Court in San Francisco. Diamond said he wants to have a creditor-repayment plan confirmed by the court prior to the end of 2015.
To read more about Allan Diamond, click here.
Warner Investments LLP owned the former headquarters of Howrey on Pennsylvania Avenue in D.C. Warner claimed it was owed some $30 million in the bankruptcy case, but the settlement deal is for $4.5 million.
The $4.5 million settlement has been labeled an administrative rent claim, which will be paid prior to other claims by creditors. Warner will also be paid another $1.5 million due from rent in 2011.
Diamond was also able to come to a settlement agreement with nine former partners who work at Jones Day. The settlement will raise $674,257 for creditors and it recoups 16 percent of money the partners received when Howery was insolvent. The partners at Jones Day are paying between $33,642 and $111,482.
To read more about Jones Day, click here.
Diamond has been able to strike deals with former partners totaling $5.7 million since May. Diamond also said in the filings that members of a dissolution committee that led the unwinding of Howrey in 2011 will come to an agreement soon.
Citibank, the largest creditor of Howery, has already been paid its $37 million debt. The payment came from a $41 million deal reached with Baker & Hostetler LLP, which inherited contingency fee cases from Howrey when it folded.
To read more about Citibank, click here.
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Image credit: Howrey LLP