Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Do I need an attorney to file bankruptcy?”
Former New York City lawyer and admitted fraudster Marc Dreier thought he was getting out of prison early—for a day—but no more.
A judge overseeing the bankruptcy of Dreier’s law firm—Dreier, LLP—ordered Dreier to testify in a lawsuit involving a hedge fund that allegedly profited from Dreier’s fraud. The lawsuit settled Wednesday, according to a lawyer representing Sheila Gowan, meaning Dreier does not have to testify.
Gowan is the administrator who is overseeing Dreier, LLP’s bankruptcy. She notified United States District Court Judge Alvin Hellerstein that Dreier’s testimony was no longer needed. The judge must approve the agreement between Gowan and the hedge fund.
The hedge fund—Westford Asset Management—has agreed to pay $32.2 million to the Dreier, LLP estate. The money and any other assets of the long-shuttered law firm will be used to pay creditors. Those creditors, said attorney Benjamin King, may have a long wait before they see any funds. Westford’s $32.2 million payment is not due until December 31, 2020.
Gowan sued Westford in 2010 seeking to recover $138 million that the hedge fund received from Dreier, LLP. United States Bankruptcy Judge Stuart Bernstein expressed surprise that the $32.2 million recovery from Westford is not due to be paid until 2020, but he instructed the parties to proceed with settlement and to notify Dreier that he would not have to testify. Bernstein had said last week that his bankruptcy courtroom did not have adequate security to accommodate Dreier’s presence and testimony. He suggested having Dreier testify in a more secure federal court.
Settling the lawsuit with Westford was one of Gowan’s final tasks in the Dreier, LLP bankruptcy. Many top secured creditors will be fully repaid, while unsecured creditors are due to be paid just 13-percent of what they are owed.
Dreier admitted in May 2009 to stealing some $400 million by selling fake promissory notes to hedge funds. He used the money to subsidize his law firm and to purchase luxuries including a 121-foot yacht and some $39 million in contemporary art. Dreier was sentenced to 20 years in prison, a sentence he is serving at the Sandstone Federal Correctional Institution in Minnesota. The fraudster was also ordered to pay $387.7 million in restitution.
Dreier’s law firm filed for bankruptcy in December 2008. At one time, the firm employed some 250 attorneys. Dreier said his scam started in 2002, when he stole settlement money that was due to a client. He said he planned to quickly repay the money, but stepped into “a quicksand of spending.” Covering for massive spending quickly devolved into a Ponzi scheme in which Dreier defrauded putative investors out of some $400 million.
Dreier earned $400,000 per year before the fraud began, but said he felt “crushed by a sense of underachievement” because colleagues and clients seemed to be doing “better financially” and appeared to be enjoying more status.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.
About the Author
Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.
A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.
Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.
In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.
See Our Related Video from our YouTube channel:
See Our Related Blog Posts: