The Daily Docket: GT Advanced Seeks to Pay Bonuses

Category: Bankruptcy Law
Published: Friday, 02 January 2015
Written by Admin

GT Advanced Technologies Inc., the New Hampshire company that fell into bankruptcy following a failed deal with Apple Inc. is asking to pay millions in bonuses to its senior executives. The Wall Street Journal has the Daily Bankruptcy Review article here.

(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click "try for free.")

A bankruptcy judge on Tuesday approved a $26 million tax settlement between Atlantic City, NJ, and the closed Revel Casino Hotel, DBR reports via WSJ.

The Detroit News reports that the city's bankruptcy fees topped $170 million.

DealBook writes about Montana's Yellowstone Club bouncing back from bankruptcy.

CMO Today reports that Aereo Inc. subscriptions grew 40% in its last six months in existence.

Bloomberg discusses the American Bankruptcy Institute's 332-page report on recommended bankruptcy law reforms.

Write to Melanie Cohen at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter at @MelanieLisa

Company news: Neil Smith elected president of CNY Bankruptcy Bar Association

Category: Bankruptcy Law
Published: Friday, 02 January 2015
Written by Admin

Neil J. Smith has been elected president of the Central New York Bankruptcy Bar Association.

Smith has been a member of the business department focusing in bankruptcy law at Mackenzie Hughes since 2005.

He earned a Juris Doctorate from St. Johns University School of Law, and a degree in public communications from Syracuse University.

Smith was admitted to the New York Bar in 2006.

Previously, he was a member of the American Bankruptcy Institute Law Review, and wrote an article entitled FCC. v. Nextwave: Plain Meaning or Just Plain Wrong?

Smith is a member of the Onondaga, New York State, and American Bar Associations.

He has served as president of the Central New York Bankruptcy Bar Association and is a member of the American Bankruptcy Institute.

Smith also volunteers with the Onondaga County Bar Association Volunteer Lawyers Project.

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

Back In The Race: Small Law Bonuses And New Year Planning

Category: Bankruptcy Law
Published: Thursday, 01 January 2015
Written by Admin

Today is Christmas Eve. Most solos and small law attorneys work only a half-day. The work load tends to be light — tying up loose ends, organizing files, arguing with the accountant, chatting with clients or colleagues, or just generally loafing around in the office. We try to leave in the early afternoon before traffic gets busy. We hope to spend the next 36 hours in peace with no calls or emails from clients, bosses, or opposing counsel. If we’re lucky, it will stay that way until the new year.

I want to talk about two year-end issues that solo practices and small firms deal with. The first is one of ATL’s favorite topics. The other is year-end business planning. I’m sure there are many other year-end issues that should be covered, but I don’t want to leave you with TL;DR rambling on Christmas Eve.

Small Law Bonuses. The ATL staff have covered the Biglaw bonus beat quite thoroughly. But not many people know about SmallLaw bonuses. Since solo and small law practices have unique business models, it is different for everyone. But I’ll try to cover some generalities that I have noticed.

Since solos and smaller firms rely more on the flat fee model and less on hourly billing, bonuses are given at key points in the year, rather than at year’s end. It is not unusual to see firms giving bonuses to associates and staff after winning a major case and collecting the fee.

Now I’m sure that many reputable boutique firms pay Biglaw-level bonuses to their associates. But it’s safe to say that most solos and small firms pay whatever bonus they feel like or whatever they can afford. They are not worried about Keeping up with the Cravathians. Or with each other. Also, because of a lack of reliable public information, small firm associates cannot tell whether they are being shortchanged compared to their peers. And even if they are, they will have to take it because their exit options are more limited.

I have heard that another problem with bonuses in small-law general practice is that it has to be the right amount. If it is too low, you will get a disgruntled employee and his productivity and morale will suffer. But if it is too high, you may be providing seed money for him to quit and do something else. Or worse, start a competing practice. I think the latter line of thinking is suspect because most new attorneys do not want to start their own practice unless they absolutely have to or they are 100% certain that they will make serious money immediately.

Based on personal experience, I think most small firms pay their associates and staff at least a modest bonus to show their appreciation. For my part, I gave my part-time office assistant a sizable bonus for her help this year, particularly when I was working the temp job. If you get no bonus at all under suspicious circumstances, that should tell you all you need to know about how valuable you are to the firm.

Business Planning. I still have a solo practice. Like most small businesses, solos and small law firms use some of the December down time to contemplate future business plans.

Some of the time is spent trying to predict the next hot legal practice areas. Is a recession coming soon? If so, it may be a good idea to start learning about bankruptcy law and tactics on debt settlement. Or will large business continue its acquisitions of smaller competitors? Then small business Mamp;A law would be the way to go. Will 2015 be the year for comprehensive immigration reform? You get the idea.

The next step would be to get in touch with key people to collaborate with. Meet with other attorneys at holiday parties to catch up, exchange ideas, and discuss the possibility of working together on future projects or even start a partnership. Then meet with mentors or a consultant to determine the risks and potential pitfalls and find ways to avoid or minimize them.

Of course, it will take some time before a firm can decide whether to continue its current course of action or do something different. But the legal profession is currently in a chaotic state — almost to the point of dysfunction — so it would be prudent to be ready for the future.

The Job Search. I’ll conclude with my current situation. For people like myself who have a solo practice but are also looking for a job, we go through the usual routine: search the career websites and check to see if anything new has come up. It is best to apply for any open positions as soon as possible, although you probably won’t get a response until the new year. Career services and some recruiters will have the holidays off, so you won’t be hearing from them.

So what am I to do in the meantime? Probably not much other than updating my rÃsumÃ, learning more about the areas of law I are interested in, and contacting everyone I know for job leads. And try to pick up a few clients as well. But at least I can spend more time with family and friends.

I want to wish all of the readers (even the monsters below) a happy and safe holiday season. It’s been a crazy year, but also a lot of fun. I would again like to hear from former solo practitioners or small law partners who have decided to leave their practices for better or for worse. But this time, I am particularly interested in hearing from people of color and how their minority status affected their practice. If you have a story to share, please email me.

Shannon Achimalbe was a former solo practitioner for five years before deciding to sell out and get back on the corporate ladder. Shannon can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..