In recent days, Dreier L.L.P., the Park Avenue law firm that Mr. Dreier founded, has been plunged into chaos. At least $35 million in escrow that was to have been held by the firm seems to be missing, the authorities say, and nearly all of its 250 lawyers are now looking for work.
The amounts pale next to the $50 billion fraud that another high-profile New York figure, Bernard L. Madoff, was accused last week of orchestrating, but they have unnerved lawyers and their clients in the broader legal community.
As the Dreier firm’s lawyers rummage through the law firm’s books, which had been until recently Mr. Dreier’s exclusive preserve, they are finding that bills have not been paid in months. Their health insurance is in default and the firm will not be able to make its $2.6 million payroll on Monday, lawyers there say.
“No one is in charge,” Vincent F. Pitta, a lawyer at the firm, complained last week in an affidavit in support of a government request to freeze assets. “The news of Mr. Dreier’s arrest has had a neutron-bomb-like effect on Dreier L.L.P.”
Few have fallen as quickly as Mr. Dreier, a Yale graduate and Harvard-educated lawyer who had been a partner at some of New York’s better known firms before opening up a high-profile practice of his own in 1996 that now has offices in five cities.
“He promised lavish salaries and lavish compensation and he was attracting the best and the brightest,” said Gerald L. Shargel, Mr. Dreier’s lawyer. Mr. Shargel said Mr. Dreier is cooperating with the receiver now running the firm.
The expense of running such an operation does not provide a ready explanation for thefts of such magnitude. Even the cost of sustaining Mr. Dreier’s appetite for luxury does not provide an easy answer for what instilled the desperation that seems to have prompted schemes involved here, schemes that prosecutors said involved Mr. Dreier pretending to be other people.
UPDATE: Case Type: UD/Commercial (not Drugs/Evict) (General Jurisdiction) Case#: SC101039 CASE NAME: 2121 AVENUE OF THE STARS, LLC VS DREIER,, LLP Parties: 2121 AVENUE OF THE STARS LLC – Plaintiff,DREIER LLP – Defendant Attorneys: KOMPA MARK A. – Attorney for Plaintiff Date Filed: 12/18/2008 Case Summary: http://www.lasuperiorcourt.org/civilCaseSummary/
Case Type: UD/Commercial (not Drugs/Evict) (General Jurisdiction) Case#: SC101025 CASE NAME: BINGHAM MCCUTCHEN VS DREIER STEIN KAHAN BROWNE WOOD & GEORGE Parties: BINGHAM MCCUTCHEN LLP – Plaintiff,DREIER STEIN & KAHAN LLP – Defendant,DREIER STEIN KAHAN BROWNE WOODS – Defendant Attorneys: ALBERSTONE DANIEL – Attorney for Plaintiff Date Filed: 12/18/2008 Case Summary: http://www.lasuperiorcourt.org/civilCaseSummary/