Another Key Deal Reached in Howrey Bankruptcy

Category: Bankruptcy Law Published: Friday, 02 January 2015 Written by Admin
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The money keeps rolling in for creditors of Howrey LLP, the Washington, DC-based law firm that went out of business in 2011.

In the latest settlement struck by Howrey trustee Allan Diamond, a group of former Howrey leaders and a law firm that initially advised the defunct firm on its bankruptcy have agreed to pay $1.85 million.

The deal will see Wiley Rein LLP (whose restructuring lawyers are, in an unrelated development, separating from the firm) contribute $1 million to Howrey's coffers, according to documents filed Monday in US Bankruptcy Court in San Francisco. It will also see the firm's onetime dissolution committee, including former chairman Robert Ruyak, chip in another $850,000.

The result of more than a year of negotiations, the settlement still requires a court's approval.

Mr. Diamond, of Texas law firm Diamond McCarthy LLP, accused the former advisers of failing to act on a key issue involving Howrey's DC landlord in the early days of the firm's bankruptcy proceeding. Wiley Rein and the dissolution committee say they did nothing wrong in dealing with the lease, which became a multimillion-dollar liability when Howrey shut its doors in March 2011.

As part of the deal, Wiley Rein will get nearly $30,000 of its settlement fee back to resolve the final bill it submitted for its work on the case before Mr. Diamond took over in October 2011.

A Wiley Rein spokeswoman had no immediate comment Tuesday on the settlement. Mr. Ruyak declined to comment, and an attorney for the dissolution committee did not return a request for comment.

The newest deal, along with a related settlement reached earlier this month with Howrey's former DC landlord, "allows the trustee to bring this case much closer to conclusion," Mr. Diamond said in Monday's court filing. Mr. Diamond had no additional comment Tuesday.

A payday could be near for Howrey's creditors if a judge signs off on the recent settlements. Mr. Diamond said in an earlier filing that he hopes to have a creditor-repayment plan confirmed by the court "well before" the end of 2015.

Howrey has already paid off a $37 million debt to its largest creditor, Citibank, thanks to a $41 million deal reached last year with Baker amp; Hostetler LLP, a firm that inherited several large contingency fee cases from Howrey.

At its peak, Howrey employed hundreds of attorneys and was known for its antitrust, intellectual property and litigation work. The firm voted to dissolve in March 2011 following an onslaught of partner departures and went into bankruptcy the next month.

Write to Sara Randazzo at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter at @sara_randazzo

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