We are class counsel for the certified class of former Thelen LLP employees who are seeking unpaid wages, WARN benefits, and other claims against the bankrupt firm. This is an update of where things stand.
Although there are rumors that the trustee has reached settlements with some of the former partners of the firm that might provide enough funds for a distribution to employees, we have not yet been able to confirm this. We know that the trustee is negotiating with the former partners. Since the statute of limitations to sue them could expire in September 2011, he has obtained tolling agreements to give him more time (possibly through January 2012) to negotiate settlements. If the trustee cannot settle with them, he will need to sue them.
If any settlements had been reached, the trustee would need to seek bankruptcy court approval. He has not yet done so. When there is more concrete information to disclose (such as when the trustee seeks approval of settlements with former partners or alternately files suit against them), we will let you know by another email.
THE EMPLOYEE CLAIMS AGAINST THE ESTATE
We stand ready to fully prosecute the employees' wage and other claims against the estate, but the bankruptcy court will not allow us to start doing so until there is some money in the estate to potentially pay any claims. Right now, there is no money. Citibank is still owed around $5 million. Bankruptcy courts do not allow the trustee to spend money defending claims until there is some hope that those claims, if successful, might actually get paid.
We look forward to the trustee making some decisions this year, which will allow us to push forward and recover funds for the former non-partner attorneys and staff of Thelen.