Bloomberg Law
June 5, 2015, 1:28 PM UTC

Bankrupt Firm Can’t Recover Fees From Lawyers

Ellen Rosen

Eight firms which added lawyers from the defunct Howrey LLP won’t have to relinquish the fees earned from work that was started when Howrey was still in business.

A federal court in California ruled that the Howrey bankruptcy trustee couldn’t claw back profits from matters that were begun at the firm but wound up elsewhere once it dissolved in 2011.

The June 3 decision by federal judge James Donato is the third to reject the 31-year-old rule that fees from so-called unfinished business could be collected by the trustee for a bankrupt firm.

Inroads emerged last year when the New ...

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