Thelen law firm files Chapter 7 after Citi cutoff
Law Firm News
Thelen LLP, a U.S. law firm that once had more than 600 lawyers, said it filed for Chapter 7 bankruptcy liquidation after Citigroup Inc (C.N), a large creditor, cut off needed funding.
The 85-year-old firm said Citigroup "is no longer willing to advance funds for the cost of collection and (to) wind down operations," or to fund the costs of a Chapter 11 proceeding, according to a filing on Thursday with the U.S. bankruptcy court in Manhattan."
Thelen also said its estimated assets "will be insufficient to result in any meaningful payment" to unsecured creditors, in light of Citigroup's $7.2 million secured loan.
A Citigroup spokeswoman declined to comment.
According to its bankruptcy petition, also filed on Thursday, Thelen has between $10 million and $50 million of assets, and between $50 million and $100 million of liabilities.
Thelen shut down in late 2008 after the recession hurt revenue, many partners departed, and efforts to merge with another firm fell apart.
The San Francisco-based firm had reached its maximum size following a 2006 merger with New York's Brown Raysman Millstein Felder & Steiner LLP. Thelen said its largest remaining creditors are in New York.
A debtor can liquidate under either Chapter 7 or Chapter 11 of the U.S. bankruptcy code. A Chapter 11 liquidation can make more economic sense for a debtor and give creditors more of a say in how proceeds are distributed.
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