Jacoby & Meyers Creditors Seek Bankruptcy for Failed FirmMichael Bathon
Jacoby & Meyers Bankruptcy LLP creditors with more than $1 million in claims moved to force the defunct law firm to liquidate in a bid to unravel the “largest consolidation of consumer law firms in U.S. history.”
Creditors including LegalZoom.com Inc. and attorneys’ offices initiated an involuntary Chapter 7 proceeding against the firm, according to a petition filed today in U.S. Bankruptcy Court in Manhattan. If they succeed, a trustee will be appointed to sell the firm’s assets.
“Liquidation must be done by an independent bankruptcy trustee in a transparent proceeding under the sound supervision of this court,” the creditors said in court papers.
The firm, formed by the 2012 merger of Jacoby & Meyers LLC and Macey Bankruptcy Law PC, ceased operations in December, transferred its assets to trusts and assigned a trustee, according to court filings. Jacoby & Meyers once had 135 offices in all 50 states, with 310 lawyers and 600 non-attorney staff, according to a statement announcing the merger.
The creditors claim there are “numerous issues” surrounding the assignment of assets and that debts haven’t been paid as they come due. They also cite “significant concerns regarding the protection” of clients whose files were to be transferred to new lawyers.
The case is In re Jacoby & Meyers Bankruptcy LLP, 14-bk-10641, U.S. Bankruptcy Court, Southern District of New York (Manhattan).