March 12, 2008
You know times are bad when Chapter 11 cases crash so swiftly into shoestring liquidation that savvy bankruptcy lawyers don’t have time to jump clear of the wreckage.
HomeBanc Mortgage Corp. left nearly $600,000 in unpaid professional bills when its bankruptcy converted from a Chapter 11 proceeding to one in Chapter 7, new court records show. That’s pretty much unheard-of in Delaware, where Chapter 11 veterans have a sixth sense for when the cash is running out.
Yet HomeBanc went broke in bankruptcy owing lead lawyers Alston & Bird $295,000, among other debts. The unpaid bills were run up during the Atlanta-based lender’s Chapter 11 proceedings, which began shortly after the company, known for its in-house prayer meetings, laid rubber through dozens of Georgia law firms. HomeBanc bounced millions of dollars worth of checks in attorney escrow accounts, causing a stir in the close-knit Georgia legal community.
Anyone that wanted to handle HomeBanc’s once-lucrative business had to agree to go to the real estate closing table with checks drawn on their escrow accounts to cover home loans, even though HomeBanc’s payment had not cleared. They don’t do that anymore.
Source:
Wall Street Journal
By Peg Brickley
You know times are bad when Chapter 11 cases crash so swiftly into shoestring liquidation that savvy bankruptcy lawyers don’t have time to jump clear of the wreckage.
HomeBanc Mortgage Corp. left nearly $600,000 in unpaid professional bills when its bankruptcy converted from a Chapter 11 proceeding to one in Chapter 7, new court records show. That’s pretty much unheard-of in Delaware, where Chapter 11 veterans have a sixth sense for when the cash is running out.
Yet HomeBanc went broke in bankruptcy owing lead lawyers Alston & Bird $295,000, among other debts. The unpaid bills were run up during the Atlanta-based lender’s Chapter 11 proceedings, which began shortly after the company, known for its in-house prayer meetings, laid rubber through dozens of Georgia law firms. HomeBanc bounced millions of dollars worth of checks in attorney escrow accounts, causing a stir in the close-knit Georgia legal community.
Anyone that wanted to handle HomeBanc’s once-lucrative business had to agree to go to the real estate closing table with checks drawn on their escrow accounts to cover home loans, even though HomeBanc’s payment had not cleared. They don’t do that anymore.
Source:
Wall Street Journal
By Peg Brickley
