Unsecured creditors of law firm, including retired partners, recover more than $10 million in bankruptcy proceedings

Our client’s need

Prior to entering bankruptcy, one of the 100 largest law firms in the country abruptly decided to liquidate, leaving retired partners in the firm with more than $20 million in unfunded pension payments due. The retired partners, in turn, filed an involuntary bankruptcy petition that was granted by the bankruptcy court. In connection with the approval of the involuntary petition, the bankruptcy court appointed a Chapter 7 trustee to administer the case.

Baker Tilly solution

The Chapter 7 trustee and special counsel retained Baker Tilly to, among other things:

  • Conduct a detailed analysis of the financial condition of the firm in the years leading up to the liquidation and bankruptcy filing
  • Assess the adequacy of the financial reporting to the firm’s bankers and partners
  • Assess the adequacy of the audit work conducted by the firm’s outside accountants
  • Spearhead the resurrection and analysis of the firm’s accounting system in order to assess the status of billings and collections in the months leading up to the liquidation
  • Conduct solvency analyses at various points in time for purposes of supporting adversary actions to recover payments to insiders
  • Review and catalog more than 2,000 boxes of documents, including financial and administrative records, to support motions for the destruction of outdated documents

Results achieved

In part due to our work on the matter, the trustee recovered in excess of $10 million by means of various settlements and adversary actions. This resulted in recoveries for the unsecured creditors, including the retired partners, that otherwise would not have been achieved.

For more information on this topic, or to learn how Baker Tilly valuation in disputes specialists can help, contact our team.