Defunct firm’s creditors sent checks

Final debts paid in bankruptcy case

About 300 creditors of the failed Ruden McClosky law firm can expect to receive a check this week for pennies on the dollar of what they were owed when the once-mighty firm filed for Chapter 11 bankruptcy in 2011.

The U.S. Bankruptcy Court approved a final distribution equal to 3 percent of the $7.6 million in claims allowed by the court. Combined with a 10 percent distribution in May 2015, the creditors are recovering $1.03 million of the $7.6 million.

That $7.6 million in “allowed claims” was itself a fraction of the $73 million creditors claimed was owed them when the firm declared bankruptcy.

In 2015, Wells Fargo, the firm’s secured lender received $4.8 million, while priority tax and wage creditors were paid in full — about $58,000, said Joseph Luzinski, senior managing director of the debt restructuring firm Development Specialists Inc.

Checks totaling about $228,000 were mailed on Tuesday, Luzinski said. The unsecured creditors were forced to wait for their shares as the last bits of money owed to the bankrupt firm trickled in, he said. “When you’re an unsecured creditor, you’re at the bottom of the heap,” he said.

The largest of the final checks — $16,000 — was paid to U.S. Bank, a company that financed leases of the firm’s office equipment, Luzinski said. Dozens who received final payments were former law partners who had retired or left the firm but had payouts remaining on the books.

“There are a handful or recognizable names from back in the day when it was a powerhouse — one of the largest law firms in Broward County and Fort Lauderdale,” he said.

The rest of the creditors were mostly “really small vendors that cater to the legal industry” such as appraisers, title companies, and deposition recording services, he said.

Ruden McClosky was founded in 1959 and at one point employed more than 200 attorneys and occupied a highrise in downtown Fort Lauderdale. It provided legal services for the development of many of the area’s most important landmarks, including BB&T Center, Sawgrass Mills and Pembroke Pines malls, and Pier 66. The firm’s clients once included Florida Power & Light, GL Homes,