Creditors Balk At Heller Malpractice Insurance Bid

Law360, New York (January 28, 2009, 12:00 AM EST) -- The unsecured creditors committee for Heller Ehrman LLP has objected to the bankrupt firm's request to spend almost $3.5 million on a three-year, $20 million tail legal malpractice insurance policy, saying it would make more sense to pay such claims on a pro rata basis than to create a new preferred class of claims.

Because the firm is solvent at the administrative and priority levels but not at the equity level, the creditors say the debtor "is essentially acting as a fiduciary charged with maximizing the...
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