Former partners have confirmed that Coudert will shortly file for Chapter 11 bankruptcy protection in the US in a desperate bid to mitigate its mounting obligations and liabilities, The Lawyer can reveal.
Steven Beharrell, Coudert’s chairman from 2001 to 2003, and Dean Poster, the firm’s London managing partner at the time the UK office jumped ship for Orrick Herrington & Sutcliffe in May 2005, have been named in a lawsuit filed against the firm by US company Statek Corporation.
The case – for fraud, malpractice and negligence – is just one of a litany of litigation that Coudert’s ‘special situations committee’ is dealing with as it attempts to wind up the firm.
Litigation costs are escalating as the firm faces at least 20 lawsuits globally, and the committee believes that Chapter 11 protection is the only way to help reduce costs and collect other funds owed to Coudert.
Coudert’s liabilities are estimated to total almost $25m (£13.25m), not including its secured debt and potential future litigation results. However, the filing is being delayed until Coudert completes the transfer of its mainland China offices to Orrick and receives a payment of around $1.4m (£740,000).