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Arter & Hadden LLP

This is a settlement for the Bankruptcy lawsuit.

Cleveland, OH: (Sep-15-07) A lawsuit was brought against the former partners of Arter & Hadden LLP, after the law firm declared bankruptcy in 2003. Arter & Hadden, founded in 1843, was one of the country's oldest law firms when it closed in mid-2003 after an aggressive expansion, followed by defections of lawyers in other cities and overhead costs that became difficult to support. When banks threatened to call in their loans, Arter & Hadden decided to close. Marc Gertz, appointed as a trustee for the Arter & Hadden estate in January 2004, conducted an 18-month investigation into the firm's collapse. He claimed in his report that the partners conspired to form a new partnership while Arter & Hadden was disintegrating, at the same time they had reckless expenses such as improper year-end bonuses.

In a settlement reached, a US bankruptcy judge has approved a more than $11 million settlement to be paid by former partners of Arter & Hadden LLP. The money will allow a significant distribution to the 400 or more creditors of the defunct firm, including court reporters, legal researchers, former landlords, suppliers and retired partners, according to lawyers for Gertz, the bankruptcy trustee who sued the partners. Sources claim that creditors should receive payments of up to 20% of their allowed claims, which is in the upper range of similar cases. About 80 of the partners who agreed to settle formed Tucker, Ellis & West in Cleveland and Bailey Cavalieri in Columbus after leaving Arter & Hadden. The remaining 100 who settled worked at Arter & Hadden's 12 offices throughout the country. [PLAIN DEALER: BANKRUPTCY FRAUD]


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Published on Sep-18-07

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