Legal News

Writ of attachment may mean bankruptcy on horizon for Heller

By Richard Binder

A San Francisco landlord for defunct Heller Ehrman won a key court ruling earlier this month that means bankruptcy is now likely, according to attorneys who have dealt with similar cases.

San Francisco Superior Court granted the landlord, 333 Bush Associates, a writ of attachment for $48 million on Dec. 19. The move makes the landlord a secured creditor, freezes a portion of Heller's assets for the landlord, and leaves other unsecured creditors at a disadvantage, essentially waiting in line behind the landlord for dibs on leftover assets.

If within 90 days Heller files for bankruptcy -- or if three of its creditors force it into bankruptcy -- then the writ is automatically stayed. That would make the landlord an unsecured creditor once more and put all unsecured creditors on an equal footing. Peter Benvenutti, a member of Heller's dissolution committee and now a partner at Jones Day, said negotiations are continuing with the landlord.

Read the full story here.

Full post as published by Legal Pad | LA on December 29, 2008 (boomark / email).