Tuesday, 21 February 2017
Last updated 3 days ago
Dec 17 2008 | 1:48am ET
The law firm owned by Marc Dreier, the attorney accused of defrauding hedge funds of hundreds of millions of dollars, has filed for bankruptcy.
Dreier LLP, which before Dreier’s arrest in Canada earlier this month on charges of impersonating another lawyer employed 250 attorneys, listed assets of between $100 million and $500 million, and debts of between $10 million and $50 million in its Chapter 11 filing with U.S. Bankruptcy Court in Manhattan. The move was made by Mark Pomerantz, the court-appointed receiver for the soon-to-be-defunct law firm.
“In the aftermath of the arrest of Mr. Dreier, no effective management of the debtor or other Dreier entities exists,” Pomerantz said. “I have determined an orderly liquidation of the firm cannot take place without bankruptcy protection.”
He added that the firm’s books and records are in “disarray,” preventing him from filing some information that is typically required for bankruptcy protection.
Dreier’s lawyer, Gerald Shargel, said his client is cooperating with Pomerantz. And he added that, contrary to Pomerantz’s statement that Dreier himself may seek bankruptcy protection, Dreier will not do so.
The accused fraudster had considered bankruptcy, but “upon further reflection” decided against it, Shargel said.
Dreier remains in federal custody after losing a bail hearing last week. He was arrested upon his return to New York and charged with defrauding investors, including several hedge funds, of $380 million selling phony discount notes.