New Development in Unfinished Business Doctrine and Defunct Law Firms

Despite the sharp disagreement in last year's federal courts in New York State, a California based judge has swallowed the "unfinished business" doctrine and declared it delicious.

In the Heller Ehrman LLP bankruptcy in San Francisco, several BigLaw firms refused the claims of the Debtor that those firms turn over the legal fees earned from matters that started at Heller but were brought to those firms by Heller refugees prior to its dissolution.  (A number of firms did reach settlements with the Debtor for similar claims, but four firms decided to battle the matter out in court.)

The bankruptcy judge on March 11, 2013, ruled in favor of the Debtor and, consequently, its other creditors, and decided that those four firms should remit to the Debtor's estate the fees earned the matters in question.

Appeals are promised.

Meanwhile, over at the Howrey LLP bankruptcy, the trustee for that Debtor filed suit on the same day (March 11) against six law firms, seeking to recover money based on the same doctrine.

The stage is set for this whole doctrine to be finally straightened out, in favor of one side or another, soon, as the lower courts are split in their decisions.

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