A floundering mortgage company owes two law firms with Atlanta offices—Paul, Hastings, Janofsky & Walker and Littler Mendelson—nearly $2.3 million in legal fees. Other law firms around the country also are claiming the company owes them money.
The company, Accredited Home Lenders Holding Co., listed Paul Hastings as one of its 30 largest unsecured creditors in its bankruptcy filing in U.S. Bankruptcy Court for the District of Delaware. Court filings show Accredited owes Paul Hastings $1,932,371; its outstanding debt to Littler Mendelson is a more modest $362,726.
Spokespeople for Paul Hastings and Littler Mendelson both declined to comment on the case.
Accredited’s largest legal creditor is Kirkland & Ellis, to which it owes $1,959,843. Other law firms waiting for a payout are San Diego’s Luce Forward Hamilton & Scripps ($606,772) and the Alabama firm now called Bradley Arant Boult Cummings ($204,009).
In all, the company’s legal bills outstanding—at least to the firms which are on its list of largest unsecured claims—top $5 million, according to documents in its Chapter 11 reorganization filing.
Accredited, based in San Diego, was one of the largest mortgage originators in the country, with a focus on subprime loans. It was acquired in 2007 by private equity firm Lone Star Funds, and is now in the process of selling off its remaining assets. The company has listed debts in excess of $214 million just to its 30 largest unsecured creditors. Its bankruptcy petition lists total liabilities rising as high as $500 million, owed to some 10,000 creditors.
Attorneys from Hunton & Williams’ Dallas office are representing Accredited in its reorganization, along with Pachulski Stang Ziehl & Jones, a bankruptcy boutique with offices in California, New York and Delaware.