john d. fiero (ca bar no. 136557) kenneth h. brown (ca bar ... · kenneth h. brown (ca bar no....

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35685-001\DOCS_SF:63993.1 DEBTOR’S APPLICATION TO EMPLOY FOLGER LEVIN & KHAN AS SPECIAL MALPRACTICE COUNSEL

John D. Fiero (CA Bar No. 136557) Kenneth H. Brown (CA Bar No. 100396) Miriam P. Khatiblou (CA Bar No. 178584) Teddy M. Kapur (CA Bar No. 242486) PACHULSKI STANG ZIEHL & JONES LLP 150 California Street, 15th Floor San Francisco, California 94111-4500 Telephone: 415/263-7000 Facsimile: 415/263-7010

E-mail: [email protected] [email protected] [email protected] [email protected]

Attorneys for Heller Ehrman LLP, Debtor and Debtor in Possession

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re: Heller Ehrman LLP,1 Debtor

Case No.: 08-32514 Chapter 11 DEBTOR'S APPLICATION TO EMPLOY FOLGER LEVIN & KHAN AS SPECIAL MALPRACTICE COUNSEL [NO HEARING REQUIRED]

Heller Ehrman LLP, debtor and debtor in possession in the above-referenced case (the

“Debtor”), hereby submits this application (the “Application”) to employ Folger Levin & Khan LLP

(the “Firm”), whose business office is located at 275 Battery Street, 23rd Floor San Francisco, CA

94111, as special malpractice counsel. The Debtor seeks to employ the Firm nunc pro tunc to

December 28, 2008. This Application is brought pursuant to section 327(e) of title 11 of the United

States Code (the “Bankruptcy Code”), Rule 2014 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”), and the Guidelines of the Office of the United States Trustee, Region 17

(“UST Guidelines”). In support of the Application, the Debtor respectfully represents as follows:

1 The Debtor’s address is 333 Bush Street, San Francisco, CA 94104, Federal Tax I.D. No. 94-1217308.

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 of 6

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35685-001\DOCS_SF:63993.1 2 DEBTOR’S APPLICATION TO EMPLOY FOLGER LEVIN & KHAN AS SPECIAL MALPRACTICE COUNSEL

I.

BACKGROUND

A. Description of the Debtor

On December 28, 2008 (the “Petition Date”), the Debtor filed a voluntary petition for relief

under Chapter 11 of the Bankruptcy Code. The Debtor has continued in possession of its property

and is operating and managing its business as debtor-in-possession pursuant to Sections 1107(a) and

1108 of the Bankruptcy Code.

The Debtor, a 118 year-old international law firm, is currently winding down its business and

affairs following the adoption of a Plan of Dissolution by the shareholders of the Debtor’s limited

partners in September, 2008. Although the Debtor is no longer engaged in the practice of law, there

remain a substantial number of unperformed, yet necessary, tasks relating to winding down the

business, maximizing the value of the Debtor’s assets for the benefit of its creditors and equity

interest holders, and discharging the Debtor’s obligations to its former clients. Thus, the Debtor still

maintains a workforce of approximately 54 employees to provide these necessary services, and

incurs routine business expenses (including payroll, employee benefits, office space and equipment,

insurance, and costs for other goods and services) as part of the winding down process. Among

other things, winding down the Debtor’s business includes pursuing the collection of at least $35

million in outstanding accounts receivable, coordinating and managing the transition and securing of

client and firm business records, assisting in negotiations with key creditor constituencies, and

performing a number of bookkeeping, office and administrative services.

B. The Debtor’s Assets and Liabilities

As of the Petition Date, the Debtor’s principal assets were $3.7 million in cash, accounts

receivable with a face amount of $52 million and an estimated recoverable value of $35 million (or

more), as well as various office fixtures, furniture and equipment and other receivables, and a $7

million equity investment in the Debtor’s errors and omissions insurer.

As of the Petition Date, the Debtor’s liabilities consist primarily of the $5.7 million in

obligations to Bank of America, NA, the Agent, under a pre-petition secured credit facility,2

2 The Debtor believes that this security interest is avoidable.

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 of 6

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approximately $10 million in accounts payable, $4 million in taxes, pension and deferred

compensation claims and claims by former employees for accrued vacation time.

C. The Debtor’s Prepetition Retention of the Firm

The Firm has extensive experience in various areas of law including, antitrust, banking,

corporate finance and securities, environmental, labor and employment, professional liability,

intellectual property, and securities litigation to name a few.

The Firm commenced rendering pre-petition services to the Debtor in or about September

2003 in connection with the merger between the Debtor and the Firm’s pre-existing client, the

Venture Law Group. Over the ensuing years the Firm periodically rendered services to the Debtor in

connection with professional liability advice, counseling, and representation. The Debtor has not

paid the Firm for all amounts due to the Firm for its pre-petition services and thus there remains the

total amount of $13,416.95 outstanding.

The Firm has not received a retainer from the Debtor during the one year period prior to the

Petition Date and the Firm has not received any payment of its fees during the 90 day pre-petition

period.

II.

THE COURT SHOULD AUTHORIZE THE DEBTOR TO RETAIN THE FIRM AS SPECIAL COUNSEL

Pursuant to section 327(e) of the Bankruptcy Code, the Debtor seeks Court authority to retain

the Firm as special malpractice counsel to perform limited legal services set forth below. The

Firm's depth of experience in the matters for which it has been engaged and the Firm’s accumulated

knowledge of the Debtor gained through the Firm’s prior representation of the Debtor makes it

amply qualified to represent the Debtor. Additionally, the Firm’s attorneys who will be rendering

services to the Debtor are highly experienced litigators with extensive experience in professional

liability matters. The Debtor therefore believes that the Firm's retention is in the best interest of the

estate.

Subject to further order of this Court, and without being exhaustive, the Firm proposes to

render the following types of limited legal services to the Debtor:

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 of 6

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(a) to assist, advise and represent the Debtor in connection with matters involving claims or potential professional liability claims against the Debtor, in particular the defense and/or prosecution of matters in which the Debtor is owed legal fees by former clients who may have or who may assert claims of professional liability against the Debtor or its former attorneys. 3

A copy of the engagement letter for services in this chapter 11 case, dated February 19, 2009,

between the Firm and the Debtor is attached hereto as Exhibit A.

The Debtor is informed that the Firm has undertaken a thorough review of its computerized

database that contains the names of clients and other parties of interest with respect to certain

matters, and that the Firm has run the following parties through its conflicts system: (a) the Debtor,

(b) the members of the Dissolution Committee; (c) the Debtor’s secured creditors and potential

lienholders; (d) the Debtor’s landlords; (e) the Official Committee of Unsecured Creditors; and (f)

the Debtor’s top thirty unsecured creditors. The Firm’s investigation has not revealed any actual or

potential conflicts of interest with respect to the matters for which the Firm seeks to be employed.

The Firm does not represent any other entity having an adverse interest in connection with this

Chapter 11 case and to the best of the Debtor’s knowledge and except as disclosed in the

Declaration of Daniel Sharp In Support of Application to Employ Folger Levin & Khan as Special

Malpractice Counsel (the “Sharp Declaration”), no attorney at the Firm has any connection with the

Debtor, its creditors, any other party in interest, its respective attorneys and accountants, the United

States Trustee, any person employed in the office of the United States Trustee, or any insider of the

Debtor.

The Debtor proposes to pay the Firm the hourly rates set forth in the engagement agreement

that is Exhibit A, which are no less favorable than the Firm’s customary rates in effect, and to

reimburse the Firm for its expenses according to its customary reimbursement policies. I am the

attorney at the Firm who is expected to have primary responsibility for this case. My hourly rate for

this engagement is $450; Risa Morris, an associate at the firm with experience in professional

liability matters, is also expected to assist the Debtor in these matters and her hourly rate for this

engagement is $350.00; Jason Horst, a junior associate, will also be assisting the Debtor in this

engagement at an hourly rate of $285.00. Other attorneys who may provide assistance to the Debtor

3 The post-petition services that the Firm proposes to provide are unrelated to the matters in which the Firm rendered pre-petition.

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 of 6

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are Ethan Schulman and Douglas W. Sullivan, both of who are partners with substantial relevant

experience, whose hourly rate for this engagement will be $540 per hour. Each of the foregoing

rates is no less favorable than the Firm’s customary rates in effect at this time for the services of

each of the attorneys listed. At present, the Firm charges hourly rates in a range from $130 to $185

for paralegals. The resumes of the professionals who are expected to provide services in this case

are attached hereto as Exhibit B.

The Firm understands that its compensation in this case is subject to prior approval of the

Court, after notice and a hearing, in accordance with section 330 of the Bankruptcy Code, Rule 2016

of the Bankruptcy Rules, and Local Rule 2014-1. The Firm may seek interim compensation during

the case at the times and in the amounts permitted by Bankruptcy Code section 331 and Bankruptcy

Rule 2016.

There are no agreements or understandings between the Firm and any entity for the sharing

of compensation received or to be received for services rendered in or in connection with the case,

except among the members or regular associates of the Firm.

WHEREFORE, the Debtor requests that this Court approve the employment of the Firm,

pursuant to section 327(e) of the Bankruptcy Code, nunc pro tunc to December 28, 2008, as its

special collections and employment litigation liaison counsel, to render the limited legal services

described above, with compensation to be paid by the estate as an administrative expense in such

amounts as this Court may hereafter determine and allow.

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 of 6

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Dated: February 20, 2009 HELLER EHRMAN LLP

By /s/ Peter J. Benvenutti Peter J. Benvenutti Its Chair of the Dissolution Committee Submitted by: PACHULSKI STANG ZIEHL & JONES LLP

By /s/ John D. Fiero John Fiero (CA Bar No. 136557)

Kenneth H. Brown (CA Bar No. 100396) Miriam Khatiblou (CA Bar No. 178584) Attorneys for Heller Ehrman, LLP, Debtor and Debtor in Possession

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 of 6

Exhibit A

Case: 08-32514 Doc #: 168 Filed: 02/23/2009 Page 1 of 5


kls

Typewritten Text

Feb. 20, 2009

kls

Typewritten Text

/s/ Paul Sugarman

Exhibit B


A T T O R N E Y S A T L A W

Embarcadero Center West 275 Battery Street, 23rd Floor San Francisco, California 94111 Telephone 415.986.2800 Facsimile 415.986.2827

Los Angeles Office: 1900 Avenue of the Stars, 28th Floor Los Angeles, California 90067 Telephone 310.556.3700 Facsimile 310.556.3770

www.flk.com

J. Daniel Sharp [email protected]

Practice Areas: Legal Profession AppellateComplex Litigation

Education:University of California, Hastings College of the Law (J.D., 1987, Order of the Coif; Editor-in-Chief, The Hastings Law Journal)

University of Virginia (B.A. in English Literature, 1981, with high distinction)

J. Daniel Sharp is a litigation partner in FLK’s San Francisco office, and chair of its legal profession and appellate practice groups. Mr. Sharp’s practice involves representation of attorneys and law firms, complex commercial litigation, and appellate proceedings.

Mr. Sharp joined FLK in 1989 after clerkships with Judge John T. Noonan, Jr., of the United States Court of Appeals for the Ninth Circuit and Judge Charles A. Legge, of the United States District Court for the Northern District of California.

Representative Matters

Representing a prominent Silicon Valley law firm in a legal malpractice action involving a lucrative merger between the firm’s client and a publicly traded company. Obtained summary judgment in favor of the law firm, and affirmance of the judgment in the California Court of Appeal.

Representing a prominent national law firm in various lawsuits and claims of professional liability.

Representing a prominent high technology law firm in legal malpractice litigation.

Representing a life insurance company on appeal. Obtained reversal of $6 million jury verdict for negligence, bad faith, and breach of contract.

Representing a private investment manager in commercial arbitration proceedings resulting in recovery of a $24 million award for breach of contract, conversion, and


J. Daniel Sharp Page 2

breach of fiduciary duty, including substantial punitive damages.

Representing a financial institution in contract and tort litigation with developers over 13 residential real estate projects. Obtained a $64 million judgment in favor of the client after a combined jury/bench trial, and affirmance of the judgment on appeal.

Representing a multi-billion dollar private company in contract litigation. Obtained summary judgment in favor of the company, and affirmance of the judgment on appeal.

Representing a private real estate investor in a contract and partnership dispute involving a portfolio of office buildings. Obtained summary judgment in federal district court, and affirmance of the judgment in the Ninth Circuit Court of Appeals.

Representing a guarantor in judicial foreclosure proceedings brought by a commercial finance company. Obtained a judgment of nonsuit at a bench trial, and negotiated a favorable settlement on appeal.

Representing the California Judicial Council in appellate proceedings.

Memberships

Member, American Bar Association, Center for Professional Responsibility

Member, Association of Professional Responsibility Lawyers (APRL)

Articles

Goldstein v. Lees Revisited: The Current State of the Law in California Regarding Claims for Disgorgement of Attorneys’ Fees


J. Daniel Sharp Page 3

Community Service

Volunteer member, Mediation Panel, United States District Court, Northern District of California





www.flk.com

Risa J. Morris [email protected]

Practice Areas: Labor and Employment Class Action Complex Litigation Plaintiffs’ Litigation

Education:Stanford Law School (J.D., 2002, with distinction, Law Review).

University of California, Berkeley (B.A. in History, 1997, highest honors, Phi Beta Kappa, Regents Scholar).

Risa Morris is a litigation associate in FLK’s Los Angeles office. Ms. Morris’ practice includes employment litigation, employment consulting and complex commercial disputes. Ms. Morris joined FLK in 2002.


• Defending employers in all types of employment disputes, including wrongful termination claims and WARN Act litigation, both in federal and state court.

• Providing pre-litigation counseling and advice to clients nationwide on employment-related issues including harassment, discrimination, wage-and-hour issues, WARN Act compliance, and labor and employee relations.

• Representing businesses in California and nationwide in complex commercial litigation, both in state and federal court.

• Providing counseling to attorneys regarding professional responsibility issues, including successful representation of a prominent law firm in a legal malpractice claim that resulted in a highly favorable settlement.

• Defeated plaintiffs’ attempt to certify nationwide and statewide classes and obtained summary judgment of all claims in a WARN Act lawsuit filed against a major national law firm.

• Won dismissal of RICO action against radio broadcasters, twice. Eight days after judgment was entered following our successful motion to dismiss, the Ninth Circuit reversed precedent relied upon in our motion. We


Risa J. Morris Page 2

defeated plaintiffs’ motion for reconsideration, obtaining an even more favorable order of dismissal.

• Won motion for summary judgment in class action lawsuit brought against national car rental company alleging deceptive and unfair business practices, which was affirmed by state Supreme Judicial Court.

• Represented former shareholders in a prominent entertainment law firm in dispute arising out of their departure from the firm. Our clients’ former co-shareholders sought nearly $20 million in damages, but after a six-week bench trial our clients were not required to pay anything.

Memberships

• Member, American Bar Associations, Sections on Litigation and Employment Law

• Member, California Bar Association, Sections on Litigation and Employment Law

• Member, Los Angeles County Bar Association

• Member, Professionals in Human Resources Association





www.flk.com

Jason M. Horst [email protected]

Practice Areas: Complex Litigation

Education:University of San Francisco School of Law (J.D., magna cum laude, 2006)

Brandeis University (B.A. in Politics and Sociology, with honors, 2000)

Jason Horst joined FLK’s San Francisco office in 2006 as a litigation associate.

Mr. Horst graduated in the Spring of 2006 from the University of San Francisco School of Law where he was awarded the Academic Excellence Award for his graduating class. While in law school, Mr. Horst worked as a comments editor on the USF Law Review, earned the Dean’s Scholarship, and was a member of the McAuliffe Honor Society. He also served as an extern law clerk for Judge Jeffrey S. White, United States District Court for the Northern District of California.

Publications

Blogging at www.iplawobserver.com, a web log of intellectual property law developments.

The Meaning of “Life”: The Morning-after pill, the Question of When Life Begins, and Judicial Review, 16 TEX. J. WOMEN & L. (forthcoming Summer 2007).

Comment, Imaginary Intent: The California Supreme Court’s Search for a Specific Legislative Intent that Does Not Exist, 39 USF. L. REV 1045 (2005).





www.flk.com

Ethan P. Schulman [email protected]

Practice Areas: AppellateLegal Profession Complex Litigation Class Action EducationalOrganizations

Education:Boalt Hall School of Law, University of California, Berkeley (J.D., 1983, Order of the Coif)

Princeton University (A.B. cum laude in Politics and Economics, 1978; Certificate in Russian Studies)

Fulbright-HaysScholar, Tchaikovsky State Conservatory of Music, Moscow, USSR (1978-1979)

Ethan P. Schulman is a partner in the San Francisco office, and co-chair of FLK’s appellate practice and legal profession groups.Mr. Schulman’s practice involves appeals, representation of public entities, representation of attorneys and law firms, and complex commercial litigation.

Mr. Schulman joined FLK in 2008 after practicing for many years as a litigation partner in a prominent San Francisco law firm. He is AV Peer Review Rated and has been selected as a Northern California Super Lawyer each year since 2004.


• Successfully representing prominent law firm in case resulting in California Supreme Court decision that plaintiffs in legal malpractice action could not recover punitive damages they allegedly lost due to the negligence of their attorneys in the underlying litigation. Ferguson v. Lieff, Cabraser, Heimann & Bernstein, LLP, 30 Cal. 4th 1037 (2003).

• Successfully representing law firm and individual lawyers in trial court and on appeal in $8.1 million legal malpractice action. Court of Appeal affirmed summary judgment for clients.

• Successfully representing law firm and partners on appeal from $690,000 award of attorneys’ fees and costs to prevailing lessor in lease dispute. Court of Appeal reversed fee award in its entirety.

• Successfully representing twelve court-appointed class counsel in litigation arising out of objections to $1.55


Ethan P. Schulman Page 2

billion settlement of antitrust claims and $60 million attorneys’ fees award. District court dismissed action and awarded $45,000 in sanctions against plaintiff’s counsel and Ninth Circuit affirmed.

• Lead trial lawyer for Insurance Commissioner of the State of California in three-week arbitration. Arbitrator ruled in Commissioner’s favor on all claims, awarding $295 million to policyholders, plus $4.5 million in attorneys’ fees.

• Successfully representing employer on petition for review of remedy imposed by National Labor Relations Board for unfair labor practices. Sever v. NLRB, 231 F.3d 1156 (9th Cir. 2000).

• Successfully representing University of California in defense of environmental impact report for large-scale biomedical research laboratory project, resulting in landmark decisions by the California Supreme Court under the California Environmental Quality Act. LaurelHeights Improvement Ass’n v. Regents of the University of California, 47 Cal. 3d 376 (1988) and 6 Cal. 4th 1112 (1994).

• Successfully representing University of California in pending challenge to constitutionality of state law entitling undocumented immigrant students to pay in-state tuition. California Supreme Court recently granted review.

• Successfully representing Hastings College of the Law in pending constitutional challenge to law school’s denial of recognition to Christian student group for violating non-discrimination policy by denying membership to gay and lesbian students. District court granted College’s cross-motion for summary judgment; upcoming oral argument in Ninth Circuit (March 2009).



Presentations

• “Is the Freedom to Associate A Freedom to Discriminate?,” St. John’s University Law Review 3rd Annual Constitutional Law Panel Discussion, New York (March 2009)

• “Appellate Law for Trial Lawyers,” Bridgeport Continuing Education, San Francisco (January 2008) and Los Angeles (April 2008)

• “Recent Developments in California Law on Conflicts and Privilege,” CLE International, San Francisco (2007)

• “Do Student Organizations Have A Constitutional Right to Discriminate? Attacks by Religious Student Groups on University Nondiscrimination Policies,” National Association of College and University Attorneys (NACUA), Washington, D.C. (April 2006) and Orlando, Florida (June 2005)

Memberships

• Member, American Bar Association

• Member, State Bar of California and admitted to practice in federal courts throughout California including U.S. Court of Appeals for the Ninth Circuit

• Member, Bar Association of San Francisco, Appellate Practice Section

Certificates and Honors

• Certified appellate specialist, State Bar of California, Board of Legal Specialization, 2003 to present

• Member, California Academy of Appellate Lawyers

• Vice Chair, Bar Association of San Francisco, Appellate Practice Section



Community Service

• Member and former chair, Legal Committee of the American Civil Liberties Union of Northern California, 1996 to present

• Volunteer mediator for the California Court of Appeal, First Appellate District, 2002 to present





www.flk.com

Douglas W. Sullivan [email protected]

Practice Areas: Arbitration Complex Litigation Construction Law Environmental Healthcare Industry Insurance Coverage Intellectual Property Legal Profession Plaintiffs’ Litigation

Education:University of Virginia, School of Law (J.D., 1979).

Indiana University (B.A. with distinction, 1975, Phi Beta Kappa).

Douglas Sullivan is a partner who works out of FLK’s San Francisco and Los Angeles Offices and who specializes in complex commercial litigation, including mergers and acquisitions, intellectual property, entertainment, partnership disputes and dissolutions, construction, real estate, environmental, insurance and securities litigation.

Mr. Sullivan has significant trial experience in state and federal courts, having acted as lead counsel in approximately 15 trials.


• Represented companies in the telecommunications, computer, wood products and healthcare industries in connection with failed mergers and acquisitions, including: NorthPoint Communications Group, Inc. v. Verizon Communications, Inc. (San Francisco County Superior Court, 2002), in which our client recovered $175 million as part of a settlement; Coram Healthcare Corp. v. Caremark Int’l (San Francisco County Superior Court, 1997), in which our client recovered $165 million of the $310 million purchase price.

• Represented companies in connection with intellectual property disputes, including: Advanced Fibre Communications, Inc. v. Calix Networks, Inc. (District Court, Travis County, Texas, 2001), in which we obtained a defense verdict for Calix following a court trial in connection with alleged misappropriation of trade secrets by former employees; Alcatel v. Calix Networks, Inc.(Sonoma County Superior Court, 2001), in which Calix successfully defended against claims that approximately 40 former Alcatel employees misappropriated trade


Douglas W. Sullivan Page 2

secrets in developing a competing telecommunications product; Phase Metrics v. Magnetic Recording Solutions, Inc. (U.S. District Court, N.D. Cal., 2000), in which our client, Phase Metrics, obtained a two year injunction preventing former employees and their new company from competing against Phase Metrics; LiquidEnvironmental Solutions of Texas v. U.S. Oil Recovery(Harris County, Texas, 2003), in which our client successfully pursued claims of misappropriation of trade secrets and breach of confidentiality agreements against former employees and their new company.

• Represented law firms and lawyers in connection with firm break ups, lawyer departures and malpractice claims, including a two month trial in Hirsch Wallerstein, et al. v. Jackoway, Tyerman (Los Angeles County Superior Court, 2006), in which we obtained a decision in favor of entertainment lawyers who were sued by their former partners for more than $15 million.

• Represented companies in real estate, construction and engineering disputes, including: Forest City v. Prudential Insurance Co. of America (Los Angeles County Superior Court, 1995), in which our client, Prudential, obtained a jury verdict following a three month trial of claims brought by Forest City in excess of $50 million for a failed real estate development stemming from environmental contamination; represented nationwide contractors, engineers and owners in connection with construction and engineering defects in commercial complexes, office buildings, power plants, manufacturing facilities, broadcast facilities, housing developments, and hotels.

• Represented companies in pursuing and defending cost recovery actions related to environmental contamination, including United Airlines, Prudential Financial, Louisiana Pacific Corporation, The Deutsch Company, and others.

• Represented companies in pursuing insurance coverage in connection with environmental, securities, errors and omissions, asbestos, and construction disputes, including:



Deutsch Company v. Chubb (Los Angeles County Superior Court, 1993), in which our client obtained a jury verdict for bad faith against the insurance carrier relating to environmental coverage; Louisiana Pacific Corporation v. Hartford (Sacramento County Superior Court, 1998), in which our client successfully recovered millions of dollars of insurance coverage related to environmental claims; Advanced Fibre Communications v. National Union Fire Insurance (American Arbitration Association, 2004), in which our client, AFC, obtained a multi million dollar award for coverage for securities claims, including attorney’s fees for bad faith; Per Se Technologies v. Underwriters at Lloyd’s of London (Los Angeles County Superior Court, 2004), in which our client successfully pursued a multi million dollar recovery for errors and omissions related to medical billing and collection in the healthcare industry.

Publications

• Author, “Techniques of Alternative Dispute Resolution,” Contractor’s Handbook of Business and Law, 1992.

Presentations

• Lecturer, “Engineering Professional Responsibility,” Stanford University Civil Engineering Department, 1996-1999, 2005-2006.

• Lecturer, “Minimizing Liability of Construction Lenders,” San Francisco Bar Association program, June, 1987.

• Lecturer, “The Mechanics of Arbitration,” California State Bar Association, 1989.

• Panelist, “Ethics in Environmental Law,” University of California, Berkeley, Boalt Hall School of Law, 1985.



Memberships

• Member, American Bar Association, Sections on Litigation, Natural Resources and Environment and Intellectual Property.

• Member, Bar Association of San Francisco.

• Member, State Bar of California

Arbitration and Mediation

• Member, American Arbitration Association National Roster of Neutrals, 1985 to present; Mediator, San Francisco Superior Court, Early Settlement Program.


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35685-001\DOCS_SF:63995.1

John D. Fiero (CA Bar No. 136557) Kenneth H. Brown (CA Bar No. 100396) Miriam P. Khatiblou (CA Bar No. 178584) Teddy M. Kapur (CA Bar No. 242486) PACHULSKI STANG ZIEHL & JONES LLP 150 California Street, 15th Floor San Francisco, California 94111-4500 Telephone: 415/263-7000 Facsimile: 415/263-7010

E-mail: [email protected] [email protected] [email protected] [email protected]

Attorneys for Heller Ehrman LLP, Debtor and Debtor in Possession

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re: Heller Ehrman LLP, Debtor

Case No.: 08-32514 Chapter 11 DECLARATION OF J. DANIEL SHARP IN SUPPORT OF APPLICATION OF DEBTOR TO EMPLOY FOLGER LEVIN & KAHN, LLP, AS SPECIAL MALPRACTICE COUNSEL [NO HEARING REQUIRED]

I, J. Daniel Sharp, declare as follows:

1. I am an attorney duly admitted to practice in the State of California and before the

United States District Court for the Northern District of California. I make this declaration in

support of the Debtor’s Application to Employ Folger, Levin & Kahn, LLP as special malpractice

counsel (the “Application”).

2. I am a partner at Folger Levin & Kahn, LLP (the “Firm”). All attorneys in the Firm

who will be working on this matter are duly admitted and licensed to practice in the State of

California and are admitted to practice before the United States District Court for the Northern

District of California.


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35685-001\DOCS_SF:63995.1 2

3. The name, address, telephone number, and facsimile number of the Firm is:

Folger Levin & Kahn LLP Embarcadero Center West 275 Battery Street, 23rd Floor San Francisco, CA 94111 Telephone 415.986.2800 Facsimile 415.986.2827

4. The Firm has extensive experience in various areas of law including, antitrust,

banking, corporate finance and securities, environmental, labor and employment, professional

liability, intellectual property, and securities litigation to name a few.

5. The Firm commenced rendering pre-petition services to the Debtor in or about

September 2003 in connection with the merger between the Debtor and the Firm’s pre-existing

client, the Venture Law Group. Over the ensuing years the Firm periodically rendered services to

the Debtor in connection with professional liability advice, counseling, and representation. The

Debtor has not paid the Firm for all amounts due to the Firm for its pre-petition services and thus

there remains the total amount of $13,416.95 outstanding.

6. Subject to further order of this Court, and without being exhaustive, the Firm

proposes to render the following types of legal services to the Debtor:

a. to assist, advise and represent the Debtor in connection with matters involving

claims or potential professional liability claims against the Debtor, in particular the defense and/or

prosecution of matters in which the Debtor is owed legal fees by former clients who may have or

who may assert claims of professional liability against the Debtor or its former attorneys.

7. The post-petition services that the Firm proposes to provide to the Debtor are with

regard to matters unrelated to the matters in which the Firm rendered pre-petition services.

8. Subject to Bankruptcy Court approval, the Firm and the Debtor have entered into an

engagement letter for services to be rendered by the Firm post-petition. A copy of the engagement

agreement for services in this chapter 11 case dated February 19, 2009 is attached as Exhibit “A” to

the Application. In connection with the engagement letter, the Firm has not been paid a retainer.


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35685-001\DOCS_SF:63995.1 3

9. There are no arrangements between the Firm and any other entity for the sharing of

compensation received or to be received in connection with the case, except insofar as such

compensation may be shared among the members and associates of the Firm.

10. The Firm has undertaken a thorough review of its computerized database that

contains the names of clients and other parties of interest with respect to certain matters. The Firm

has run the following parties through its conflicts system: (a) the Debtor, (b) the members of the

Dissolution Committee; (c) the Debtor’s secured creditors and potential lienholders; (d) the Debtor’s

landlords; (e) the Official Committee of Unsecured Creditors; and (f) the Debtor’s top thirty

unsecured creditors. The Firm’s investigation has not revealed any actual or potential conflicts of

interest with respect to the matters for which the Firm seeks to be employed. The Firm does not

represent any other entity having an adverse interest in connection with this Chapter 11 case and to

the best of my knowledge, and except as otherwise disclosed herein, no attorney at the Firm has any

connection to the Debtor, its creditors, any other party in interest, their respective attorneys and

accountants, the United States Trustee, or any person employed in the office of the United States

Trustee.

11. The Debtor proposes to pay the Firm the hourly rates set forth in the engagement

agreement that is Exhibit A, which are no less favorable than the Firm’s customary rates in effect,

and to reimburse the Firm for its expenses according to its customary reimbursement policies. I am

the attorney at the Firm who is expected to have primary responsibility for this case. My hourly rate

for this engagement is $450; Risa Morris, an associate at the firm with experience in professional

liability matters, is also expected to assist the Debtor in these matters and her hourly rate for this

engagement is $350.00; Jason Horst, a junior associate, will also be assisting the Debtor in this

engagement at an hourly rate of $285.00. Other attorneys who may provide assistance to the Debtor

are Ethan Schulman and Douglas W. Sullivan, both of who are partners with substantial relevant

experience, whose hourly rate for this engagement will be $540 per hour. Each of the foregoing

rates is no less favorable than the Firm’s customary rates in effect at this time for the services of

each of the attorneys listed. At present, the Firm charges hourly rates in a range from $130 to $185


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35685-001\DOCS_SF:63995.1 4

for paralegals. The resume of the professionals expected to provide legal services to the Debtor are

attached as Exhibit “B” to the Application.

12. The Firm understands that its compensation in this case is subject to prior approval of

the Court, after notice and a hearing, in accordance with section 330 of title 11 of the United States

Code (the “Bankruptcy Code”), Rule 2016 of the Federal Rule of Bankruptcy Procedure

(“Bankruptcy Rules”), and Local Rule 2014-1. The Firm may seek interim compensation during the

case at the times and in the amounts permitted by Bankruptcy Code section 331 and Bankruptcy

Rule 2016.

13. The Firm does not employ any person who is related to a judge of this Court or the

United States Trustee for the Northern District of California. To the best of my knowledge, after

conducting or supervising the investigation described above, I believe the Firm is eligible for

employment by the Debtor pursuant to Bankruptcy Code section 327(e).

I declare under penalty of perjury under the laws of the United States that the foregoing is

true and correct.

Executed on the 19 day of February, 2009, at San Francisco, California

/s/ J. Daniel Sharp J. DANIEL SHARP

44014\2005\634129.1


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