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02/14/07

Coudert controversy refuses to die dow


Even 18 months after the firm Coudert Brothers LLP, ranking in the top 100 highest grossing law firms in the U.S. in 2004, was dissolved, its winding up remains a controversial matter, says a report in nytimes.com. Recently, the creditors' committee reached a compromise with Coudert to have an examiner, rather than a trustee involved in the case. The examiner will investigate the issues such as sale of the firm's offices, the repayment of the bank loans, whether partners owe or are owed money, and whether the firm was insolvent before filing for bankruptcy.

The firm which had 400 lawyers is facing lawsuits not only from creditors, but also from at least one partner. They are raising allegations of malpractices, and of money misappropriation by three overseas lawyers. They also allege that the partners were made payments at a time when the firm should have known that it was insolvent. The payment amount at sake could exceed $25 millions.

Founded in 1853, Coudert had built a huge international practice. After its failure in effecting a merger with Baker & McKenzie, partners in the London and Moscow offices defected to Orrick, Herrington & Sutcliffe.

David Adler, the lawyer for the creditors' committee, said procedures were used "to pay off the banks and shield the partners from personal liability." According to court documents about $23 million in loans to Citibank and JPMorgan Chase personally guaranteed by Coudert's partners were repaid. However, the creditors have questioned $28 million paid to Coudert partners in the first eight months of 2005 - more than a year before the bankruptcy petition was filed.



Coudert's Lawyer Tracy Klestadt has acknowledged in court documents that at most $8.3 million was paid after the firm knew dissolution was a possibility. He doesn't find anything improper in the winding down of the firm. He also terms timing of the bankruptcy as an initiative to avoid unnecessary expenses.

Justifying bankruptcy on the ground that a number of judgments were issued against the firm, Klestadt says it was necessary to prevent assets from being attached. He also adds that the firm at all times had sufficient accounts receivable that would lead to the conclusion that it was solvent on a balance-sheet basis. Mentioning about the overpayments made to the firm partners on account of over distribution of profits and tax advances, Klestadt says that it was paid irrespective of the firm's present condition.

Debevoise & Plimpton strengthens its Moscow arm
Prominent international law firm Debevoise & Plimpton LLP  has hired Samuel Raymond Tillett as International Counsel, resident in the firm's Moscow office. As member of the corporate department, Tillett will work on international securities, mergers and acquisitions, and financing transactions. Prior to this appointment, he was General Counsel for the ITI Group, Poland's largest media group. Dmitri V. Nikiforov, Managing Partner of the firm's Moscow office said the firm would leverage on Tillet's wide experience of more than three decades to expand its base in Moscow. Tillet's talent and experience in international securities, M&A and financing transactions will add to the firm's Russian practice group.

Debevoise & Plimpton's lawyers represent a wide range of clients around the globe. Established in 1931, the firm has eight offices across the continents housing more than 650 lawyers. The Moscow office of Debevoise & Plimpton now boasts of 17 attorneys and specializes in mergers and acquisitions, securities, equipment finance, joint ventures, and investment funds.

Coudert Brothers, L.L.P.

    


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