#USA #New York #Bankruptcy #Stroock Law #Asset Distribution

Stroock Law Firm Settles with Creditors

Stroock & Stroock & Lavan LLP (commonly known as Stroock) has announced significant progress in its operations, having successfully reached settlements with all major creditors. This development permits a comprehensive and orderly winding down and distribution of the firm's assets following its recent dissolution.

The law firm officially entered its dissolution phase on November 17, 2023, after losing several large partner groups to other firms. Shortly thereafter, Stroock ceased all legal practices. To oversee the winding down process, the Executive Committee appointed Gary Polkowitz, a Senior Managing Director at Teneo, a prominent advisory firm, as the Liquidation Manager. In his role, Polkowitz, along with a team of dedicated professionals, engaged in astute negotiations with both secured and unsecured creditors throughout the past year. Their efforts included managing remaining assets, shutting down various office locations, and returning escrowed funds as required by law firm liquidation protocols.

Under the terms of the recently established settlement and distribution plan, the Liquidation Manager is tasked with dispersing the firm's remaining assets to its senior unsecured creditors in a pro-rata manner. This distribution is based on the agreed-upon claims accepted by those creditors. Current estimates suggest that distributions will yield approximately 60% of the recognized claim amounts, although actual recoveries could vary. For creditors with smaller claims, a simplified one-time payment option has been provided, allowing them to accept 40% of their allowed claims in a single transaction.

Notably, the settlement reached its fruition on the condition that at least 80% of the creditors, measured by the dollar amount of claims, accepted the terms. Polkowitz expressed confidence in the outcome, noting, "Based on my experience with other law firm liquidations, the estimated recoveries to Stroock’s creditors far exceed those typically observed. This transparency has garnered agreement from over 90% of Stroock’s creditors through the end of December 2024. The higher recoveries can be attributed to the dedicated work of Stroock's winding down team and the commitment of the firm’s former partners to fulfilling their obligations to both the creditors and the firm."

Supporting Polkowitz in this endeavor has been outside legal counsel from Togut, Segal & Segal LLP, as well as David Pauker, a well-regarded restructuring expert, who served as a Special Advisor to the firm throughout the liquidation process. The collaborative efforts of these professionals have played a crucial role in ensuring a smoother transition for stakeholders involved, highlighting the firm’s commitment to resolving creditor matters efficiently and effectively.

This orderly winddown signifies a pivotal moment for Stroock's legacy, as it moves forward with a structured plan that prioritizes creditor satisfaction amidst challenging circumstances. With strategic leadership at the helm and a well-mapped-out distribution strategy, Stroock is setting a valuable precedent for law firm liquidations in the future. The completion of this settlement not only eases the path for creditors seeking their due recompense but also embodies a responsible approach to the dissolution of a long-standing legal institution.

In conclusion, the successful negotiation of settlements by Stroock not only aims to mitigate the impact of its dissolution on creditors but also fosters a transparent process that other legal entities may look to emulate in similar circumstances. The firm’s proactive stance exemplifies how professional integrity during challenging times can still pave the way for successful outcomes in the financial landscape of the legal profession.