In re Howrey LLP

MEMORANDUM DECISION ON MOTION FOR RELIEF FROM STAY

I. INTRODUCTION

Haynes and Boone, LLP (“H & B”) filed a Motion For Order Confirming That The Automatic Stay Is Inapplicable, Or In The Alternative, Granting Relief From The Automatic Stay (the “Motion”) on April 2, 2013. The Motion was prompted by a threatened lawsuit against H & B by Allan B. Diamond, chapter 11 trustee (“Trustee”), to recover profits earned by H & B on matters brought to it by a former member of Howrey LLP (“Debtor”).

Trustee made good on his threat three days later and filed an adversary proceeding (Diamond v. Haynes and Boone, LLP, A.P. No 13-03056) (the “Adversary Proceeding”) in this court. As predicted, the Trustee alleges, inter alia, that Debtor’s waiver of the duty of departing partners to account for unfinished hourly business was a fraudulent transfer under § 548, and that H & B is liable under § 550 1 . Paragraph 1 of the complaint states:

Trustee contends that H & B is liable for profits earned on Debtor’s unfinished business as the entity for whose benefit the transfers were made and/or the immediate or mediate transferee of the initial transferees of such transfers. 2 More specifically, he…